Yahoo gets defensive on compensation

May 2, 2016

Friday afternoon was the deadline for those companies on a calendar year to file their proxy statements and on Friday afternoon, we saw a big surge in those filings, with about 150 proxies filed after 4 pm. But some companies chose to file an amended 10-K with proxy-related information (read: compensation), which is allowed under SEC rules and is most common for companies in some state of flux.

Yahoo, which had put itself up for sale as activist investors circled, was one of those companies, filing their amended 10-K just after 5 pm on Friday. As with similar filings, it included the summary compensation chart that is more commonly found in the proxy statement. What was different, however, was the level of defensiveness the company exhibited when it came to justifying what it paid Marissa Mayer.

That’s because before you even got to the table on pg. 44, there were lots of bold type trying to explain why you shouldn’t take the numbers in that table at face value. Here’s a sample from pg. 17:

“our Chief Executive Officer’s actual earned compensation for 2015 was 39 percent of the total reported in the Summary Compensation Table.”

Before you even got to that, the company explained that named executives “received no salary increases or annual bonuses for 2015”.

And just in case you still were distracted by some of the numbers in the summary compensation table, there was a separate chart and corresponding graphic on pg. 16 that provided the back-up math to show that $36 million reported for Mayer in the summary compensation chart was actually “only” $13.9 million.

And, in case you still had your doubts, there was a bar chart on pg. 16 that showed that the 39% realized pay that Mayer received in 2015 was significantly lower than the 60% of realized pay she received in 2014.

To be fair, Yahoo did include a chart on realized pay back in its 2013 proxy. But it wasn’t done in quite the same way. This year seemed more like the proverbial hitting someone over the head with a frying pan approach to executive compensation.

All told, the company devoted nearly 50 pages of the proxy “explaining” its compensation practices.

Given the spate of headlines over Friday’s filing, including stores like this one, which says that Mayer will get $55m to leave the company, it may be easy to understand Yahoo’s defensive crouch on compensation. But that doesn’t make it any less rare.