Feb 21, 2008

Yahoo: AKA - You always have other options!!

Earlier in the week I blogged about the Microsoft -Yahoo saga and expressed mild concern that both orgs could loose key talent in the wake of a drawn out proxy fight. Clearly, Microsoft is serious about seeing this deal through, this initiative should, at the very least, serve as a forcing function to bring yahoo to the negotiating table. It makes no sense for MSFT to raise the offer when key Yahoo stakeholders seem deadset against the deal. So, the Proxy Contest - will go ahead.

That said, Yahoo is thinking well ahead. The company has announced its directors had decided to offer all full-time employees enhanced severance benefits in case they were terminated without cause in the two years after completion of any merger. Yahoo said that the enhanced benefits, which include accelerated vesting for stock options, were intended, in part, to prevent an exodus of employees.

The new severance plan is intended “to help retain the employees" - They also include accelerated vesting for all stock options, restricted stock units and other equity-based awards, and reimbursement for outplacement services up to a maximum of $15,000. All this from a company which was laying off 1,000 staffers last week.

All of this reminds me of a comment I read in a recent blog post by Mark Cuban. He referenced a conversation he once had with Jerry Yang during which Jerry mentioned that Yahoo stood for: You Always Have Other Options.

In an ideal world, we always have options. If we plan ahead, maintain a level of independent, introspective thinking and stay driven - we tend to have more options. In this case though - Yahoo Investors have few options, none of which seems better than the deal at hand.


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