Who will pay for Yahoo’s lavish new employee retention and severance program (details below)? Anyone with the temerity to acquire the company, of course.
We’re all for fair severance agreements, but Yahoo’s new plan does seem like a big fark-you to would-be acquirers. It also reveals just how many Yahoo employees must be considering jumping ship.
How would you like to be the beneficiary of a plan that gives senior executives:
- up to two years of full pay and benefits following departure,
- $3,000-$15,000 of “outplacement services” (help finding a new job),
- accelerated stock and option vesting, and
- the ability to leave the company–and trigger the severance payments–for any “good reason” (including, presumably, that you’d rather get paid not to work).
All this in the event of a change in control. According to the NYT, most Fortune 500 companies have similar benefits for top management. The difference here is that Yahoo’s new plan extends to all full-time employees.
Yes, we know–you’d love to be the beneficiary of such a plan. And no wonder–it’s a major fringe benefit. It’s also paid for not by Yahoo but by the shareholders of an acquirer (in a massive one-time charge that will be taken in conjunction with the acquisition). In other words, whatever money Microsoft has set aside for Yahoo retention bonuses, Yahoo has just spent it.
One thing we’ll say about this new plan: If Jerry was counting on the support of Yahoo troops in his effort to block the company’s sale to Microsoft, he’s now torpedoed that idea. Yahoos are now going to welcome Microsoft–or any other acquirer–with open arms.
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