A $1 Billion Spoon Full of Severance Makes the Microsoft Go Down!
After we reported Tuesday that Yahoo plans to give employees new retention packages and enhanced severance benefits, we got a plethora of emails from Yahoos from all levels of the company.
The general response: Yahoo!! (with two, not one, exclamation points).
“This is just what we needed,” said one employee in a typical email. “We are all bumming about the inevitability of Microsoft taking over, so a spoon full of sugar will make this very sour medicine go down.”
Well, when you put it like Mary Poppins does, Microsoft (MSFT) CEO Steve Ballmer seems almost cuddly.
Maybe not so much after he gets the bill CEO Jerry Yang and the Yahoo board are running up in the event of a takeover, as if they were that other great musical comedy star Dolly Levi, returning triumphantly to the Harmonia Gardens restaurant with the champagne flowing like water.
(Quick query: Is it just me or does Ballmer remind you of Walter Matthau’s version of Horace Vandergelder?)
He will likely be just as grumpy.
That’s because, according to later filings by the Internet portal, Yahoo will offers all its employees the severance, as well as reimbursement for outplacement services and an acceleration of stock options, which will all be triggered by a change in control.
While it was very much like Yahoo to offer its coteries of top execs–who always seem to make out like bandits when it comes time to hand out stock option grants–up to two years of severance, all Yahoos will get at least four months, which is quite generous.
With someone else’s money, of course.
According to back-of-the-envelope figuring by Henry Blodget of Silicon Alley Insider, it could cost Microsoft at least $1 billion and up to $3 billion to honor the new severance plan.
Add on the higher price the Yahoo board wants above Microsoft’s $31-per-share offer and now you have a bill of sale that is really something.
Yahoo, it seems, is indeed channeling Dolly, whose most famous line is pretty apt: “Money, pardon the expression, is like manure. It’s not worth a thing unless it’s spread around, encouraging young things to grow.”