Yahoo filed details of an FAQ feature it posted for employees on its internal Web site Tuesday regarding the Change in Control Employee Severance Plan it adopted less than two weeks after Microsoft’s initial bid for the company, and which dissident investor Carl Icahn demands the company drop.
Details of the plan surfaced last week when a Delaware court unsealed documents in a Yahoo shareholder lawsuit alleging the company improperly tried to avoid a takeover.
So what kinds of questions did Yahoo management imagine were on its employees’ minds?
Did Yahoo adopt the Plan to thwart a deal with Microsoft?
“No. The Plan is intended to help retain valued employees and preserve the value” of Yahoo during a “period of uncertainty”.
Why are you talking about severance packages when I’m still employed?
“During a time of uncertainty, we understand the concerns of our Yahoos and we’re preparing
for all potential scenarios. The Plan is intended to alleviate any concerns employees may have
about a job loss in connection with a merger or other Change in Control.”
Mr. Icahn says the plan costs $2.4 billion. Is that what it actually costs?
“No.” The company then lists variables that would effect the final cost of the plan, adding: “Mr. Icahn quotes the $2.4 billion estimate, taken out of context from a complaint filed in litigation against the company.” The $2.4 billion price tag assumes every employee would be let go. “No one believes that such an assumption is reasonable.” (Hmm. No One = Carl Icahn?)
Did Yahoo’s compensation consultant say that the plan is “nuts”?
“”No.” Tim Sparks, the president of Compensia, Yahoo’s compensation consultant firm, used the
word “”nuts” to describe his opinion of using the assumption that 100 percent of Yahoo’s
employees would actually receive the severance benefits in order to determine cost estimates.
Do all employees get the same benefits under the Plan?
“The amount of severance payments, outplacement assistance and the period of the continued
health coverage varies depending on an employee’s job level,” but the “full acceleration of outstanding equity awards is applicable to all eligible employees under the Plan.” (That’s a No, yes?)