Yahoo 2010 Annual Report Download - page 112

Item 9B. Other Information
Executive Incentive Plan
On February 25, 2011, the Compensation Committee approved the Company’s annual cash bonus plan for senior
executives (the Executive Incentive Plan, or “EIP”), which will be effective for 2011. Each participant in the EIP
is assigned a target bonus percentage each year that is expressed as a percentage of the participant’s annual base
salary. The aggregate bonus pool available under the EIP for a particular year will equal the aggregate amount of
the participants’ target bonus opportunities, multiplied by a factor that may range from 50 percent to 200 percent
based on Yahoo!’s revenue ex-TAC growth rate and ex-TAC operating margin (each as defined in the EIP) for
that year. Payout of 70 percent of each participant’s target bonus will be determined based on the Company’s
performance, and the remainder of the participant’s bonus will be determined based on that participant’s
individual performance. The individual performance component of a participant’s bonus will be determined by
the Compensation Committee with respect to executive officers of the Company and by management with
respect to the other participants in the EIP, except that in no event will the total amount of bonuses paid under the
EIP for a particular year exceed the aggregate bonus pool for that year. A participant generally must remain
employed by the Company until EIP bonuses are actually paid in order to be eligible for a bonus. The foregoing
summary of the EIP is qualified in its entirety by the provisions of the EIP.
The following table sets forth the 2011 EIP target bonus percentage, expressed as a percentage of the
participant’s annual base salary, for the Company’s principal executive officer, principal financial officer, and
the other executive officers who were named in the Summary Compensation Table of the Company’s Proxy
Statement filed with the SEC on April 29, 2010 and who are currently employed as executive officers of the
Company and will participate in the EIP:
Name and Principal Position
2011 Target Bonus
(% of Base Salary)
Carol Bartz ......................................................... 200%
Chief Executive Officer
Timothy R. Morse .................................................... 120%
Executive Vice President and Chief Financial Officer
Michael J. Callahan .................................................. 90%
Executive Vice President, General Counsel and Secretary
Executive Severance Agreements
In addition, on February 25, 2011, the Compensation Committee approved the Company’s entering into
agreements with the Company’s executive vice presidents, including Mr. Morse and Mr. Callahan, to provide
severance benefit protections to these executives should their employment terminate in certain circumstances
(each a “Severance Agreement”).
Under each Severance Agreement, in the event that the Company terminates the executive’s employment without
cause (as defined in the agreement), the executive would generally be entitled to receive cash severance equal to
(i) the executive’s base salary for 12 months, (ii) the executive’s annual target bonus for the year in which the
termination notice is provided, and (iii) a prorated portion of the annual bonus the executive would have received
for the year in which the termination notice is provided (or, if less, the executive’s target bonus for such year)
based on the number of months the executive was actively employed with the Company during the year. The
executive would also be entitled to payment by the Company of the executive’s COBRA premiums for 12
months following termination.
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