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@achates
Sep 13 21:16 pm
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All Comments by Eric Jackson »Why Did Yahoo's Carol Bartz Use Shareholders' Money to Pay Taxes? [View article]
I completely disagree with you. It is common for many lower level employees to choose to do what you did with your RSUs. I understand that. It is very uncommon for someone of Bartz' wealth to make that choice. Show me otherwise.
She had to make a choice on how to pay the tax bill: from her own funds or from selling the RSU YHOO stock. The first option would have been relatively easy for her. Instead of selling some of her Disney stock (or whatever holdings she possesses including cash), she decided to sell YHOO stock.
It's either because (a) she thought DIS was a going to do better in the long-term than YHOO or (b) she saw it as the shareholders' responsibility to pay this bill out of this grant she was getting. I'm sure she knew she how to negotiate to gross-up the amount she was getting as part of her make-up grant so that it would be the shareholders paying the tax bill not her. She also negotiated to get YHOO shareholders to pay $150,000 to the financial advisory firm that she used to negotiate her employment contract. $150k advisors know gross-ups.
Whatever her reasoning, the fact remains she sold $2mm in YHOO stock in the first year and we'll see what she does in September and December. She then goes on TV and says she "didn't sell anything" and that she "reacquired" the shares. I missed that in her Form 4 filings with the SEC which only mentioned a "disposal" of $2mm in stock. Why she would make these statements last Thursday really puzzles me.
It's wrong what she did and sends the signal that she doesn't want to keep every single YHOO share she can get her hands on. What's the difference when your expected total comp for 4 years of work will be $187mm -- and that's with low-risk, bump along performance, not shoot-the-lights-out performance?
She should fix it by going out tomorrow and putting a significant amount of her own capital -- $20mm -- at risk by buying open-market shares. Let her make her millions, but put some skin in the game.