Oct. 11 (Bloomberg) -- Yahoo! Inc. Chief Executive Officer Carol Bartz topped a list of executives who are paid too much for running underperforming companies, according to a report by proxy advisory firm Glass Lewis & Co.
Bartz, who joined the company in early 2009, received $39 million last year, according to Glass Lewis, which is based in San Francisco. That was the highest compensation among executives at 25 overpaying companies in the Standard & Poor’s 500 Index, Glass Lewis said today.
To determine whether the company is paying too much, Glass Lewis weighs metrics including stock price, operating cash flow and growth in per-share earnings. Much of Bartz’s compensation included options to purchase stock at prearranged prices in the event the company meets certain targets. The executive aims to combat rising competition from Facebook Inc. and Google Inc. and reverse the slump that’s left sales little changed on her watch.
“Bartz represents a problem we find at many other firms with poor pay-for-performance grades: excessive compensation awarded to executives to encourage them to join or remain with a company,” the report said.
Dana Lengkeek, a spokeswoman for Sunnyvale, California-based Yahoo, said most of Bartz’s compensation was in stock options that Bartz could not “take home.” Bartz will be able to exercise options on 5 million shares if certain conditions are met, and they cannot be sold until 2013, except under certain circumstances, such as a change in control at the company.
“This was part of her joining back in 2009 and should not be looked at as an annual salary,” Lengkeek said.
The next-highest paid executives whose companies made the top 25 are Abercrombie & Fitch Co. CEO Michael Jeffries, with $38.5 million in total compensation, and Nabors Industries Ltd. CEO Eugene Isenberg, whose compensation totaled $38.2 million, according to Glass Lewis.
Representatives of Abercrombie & Fitch and Nabors didn’t immediately respond to requests for comment, left after business hours.
The 25 companies that overpay executives gave their top five leaders $34.3 million in average compensation, compared with $23.7 million for all of the S&P 500, the report said.
Apple Inc. CEO Steve Jobs was the lowest-paid CEO in the group of most underpaid executives. Jobs earned an annual salary of $1 last year.
Yahoo, based in Sunnyvale, California, reports third-quarter financial results Oct. 19. It had second-quarter sales of $1.13 billion, excluding revenue passed on to partner sites, short of the $1.16 billion average of projections compiled by Bloomberg. Total sales rose 1.4 percent to $1.6 billion last quarter, from $1.58 billion at the end of Bartz’s first quarter.
Yahoo slipped 8 cents to $14.41 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have fallen 14 percent this year.
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