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Management Incentive Plan (MIP) Driving, Recognizing & Rewarding Success

Total Rewards Philosophy Our people strategy is to attract, engage and retain top talent in a highly competitive and dynamic environment. We will support this by providing:

1 Competitive and personally relevant total rewards 2 Responsible, performance-oriented compensation Rewards targeted to key talent segments and individuals who have the ability to 3 impact the near and long-term performance of the company 4Alignment with shareholder interests 5 Global strategy with local flexibility We will enable employees to be responsible participants in their own total rewards.

MIP Plan Objectives To enhance Yahoo’s competitiveness and ability to attract, motivate and retain top talent

To align the participants on common goals

To recognize the role employees play in Yahoo’s success To reward annual financial and individual performance that complements the longer-term strategic focus


What do YOU need to know about

MIP?

High performance is critical to Yahoo! and a key to our growth and success. As part of our commitment to attract, retain and motivate the best employees, we offer the Management Incentive Plan (MIP), which is based on individual and Company performance. Yahoo’s Annual MIP program is designed to reward employee and Yahoo! performance on an annual basis.

YAHOO!

MIP bonus budgets are managed as a pool and determined by company performance. The Company must perform as one organization against the financial targets established by the CEO. Company performance will determine the overall MIP bonus pool. The MIP bonus pool is determined by two metrics: Revenue ex-TAC Growth Rate and Ex-TAC Operating Margin. The MIP Bonus Pool can be increased if the Revenue ex-TAC target is exceeded or decreased if either or both of the targets are not met. The actual MIP bonus pool for the applicable fiscal year may vary from 50% to 200% of the Target Bonus Pool, based on company performance.

YO U

MIP eligibility is determined by job level; typically includes global employees level IC4 or higher and IC3 technical employees. Employees on other formal sales or bonus plans are not eligible for MIP. All MIP eligible employees have a target incentive award, which is determined by level and will be typically expressed as a percentage of annual base salary rate as of the last day of the applicable fiscal year. Employees hired or promoted within the fiscal year are eligible to receive a prorated MIP payout. Employees on approved leave of absences of more than 90 days during the fiscal year will also receive a prorated MIP award. Employee hired after October 1 (or if October 1 is on a weekend or holiday, the first business day thereafter) will not be eligible for that plan year Individual payouts are based on Management’s assessment of an employee’s performance over the fiscal year.

YOUR TARGET

The MIP pool is funded at the company level, therefore each business unit is allocated a percentage of the company pool to distribute MIP awards to employees. Managers award bonuses as a percentage of an employee’s target incentive based on his or her performance during the fiscal year. An employee is not guaranteed a MIP payout; awards are discretionary and will vary based on performance.

2012 Management Incentive Plan  

2012 Management Incentive Plan

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