Proxy Statement for the 2016 Annual Meeting of Shareholders
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701 First Avenue, Sunnyvale, CA 94089 NOTICE OF ANNUAL MEETING OF SHAREHOLDERS To Be Held on June 30, 2016 We will hold the annual meeting of shareholders of Yahoo! Inc., a Delaware corporation (the “Company”), at the Santa Clara Marriott, located at 2700 Mission College Boulevard, Santa Clara, California, on June 30, 2016, at 2:00 p.m., local time, for the following purposes: 1. To elect to the Board of Directors the 11 director nominees named in the attached proxy statement to serve until the 2017 annual meeting of shareholders and until their respective successors are elected and qualified; 2. To approve, on an advisory basis, the Company’s executive compensation; 3. To ratify the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016; and 4. To transact such other business as may properly come before the annual meeting and any adjournment or postponement thereof. These items of business, including information about the director nominees, are more fully described in the proxy statement accompanying this Notice. The Board of Directors has set the close of business on May 20, 2016 as the record date for determining the shareholders entitled to notice of and to vote at the annual meeting and any adjournment or postponement thereof. All shareholders are cordially invited to attend the annual meeting in person. Whether or not you plan to attend the annual meeting in person, you are urged to submit your proxy or voting instructions as promptly as possible to ensure your representation and the presence of a quorum at the annual meeting. If you submit your proxy or voting instructions and then decide to attend the annual meeting, you may still vote your shares in person by following the procedures described in the proxy statement. Your proxy is revocable in accordance with the procedures set forth in the proxy statement. Shareholders of record as of the close of business on May 20, 2016 are entitled to receive notice of, to attend, and to vote at the annual meeting. If you are a beneficial owner as of that date, you will receive communications from your broker, bank, or other nominee about the meeting and how to direct the vote of your shares, and you are welcome to attend the annual meeting, all as described in more detail in the related questions and answers in the attached proxy statement. Important Notice Regarding the Availability of Proxy Materials for the Shareholder Meeting to Be Held on June 30, 2016. The proxy statement and the Company’s 2015 Annual Report to Shareholders are available electronically at yahoo2015.tumblr.com. By Order of the Board of Directors, Ronald S. Bell General Counsel and Secretary Sunnyvale, California May 23, 2016 TABLE OF CONTENTS PROXY SUMMARY .......................................................................... 4 QUESTIONS AND ANSWERS ABOUT OUR PROXY MATERIALS AND THE ANNUAL MEETING ................. 9 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS .................................. 16 PROPOSAL 1 — ELECTION OF DIRECTORS ........................................................ 17 Voting Standard ...................................................................... 17 Nominees ........................................................................... 18 Corporate Governance ................................................................. 23 Director Compensation ................................................................ 32 Required Vote ....................................................................... 35 Recommendation of the Board of Directors ................................................ 35 PROPOSAL 2 — ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION ............................. 36 Required Vote ....................................................................... 40 Recommendation of the Board of Directors ................................................ 40 PROPOSAL 3 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM . 41 Required Vote ....................................................................... 41 Recommendation of the Board of Directors ................................................ 41 BENEFICIAL OWNERSHIP OF PRINCIPAL SHAREHOLDERS AND MANAGEMENT ........................... 42 Section 16(a) Beneficial Ownership Reporting Compliance .................................... 44 EQUITY COMPENSATION PLAN INFORMATION .................................................... 45 OUR EXECUTIVE OFFICERS .................................................................... 46 EXECUTIVE COMPENSATION .................................................................. 47 Compensation Discussion and Analysis .................................................... 47 Compensation Committee Report ........................................................ 76 Compensation Tables .................................................................. 77 AUDIT AND FINANCE COMMITTEE REPORT ....................................................... 94 FEES FOR SERVICES RENDERED BY INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ................ 95 RELATED PARTY TRANSACTIONS ............................................................... 96 LEGAL PROCEEDINGS ........................................................................ 97 NO INCORPORATION BY REFERENCE ............................................................ 97 ANNUAL REPORT TO SHAREHOLDERS ........................................................... 97 OTHER MATTERS ........................................................................... 98 2 701 First Avenue, Sunnyvale, CA 94089 PROXY STATEMENT This proxy statement is furnished in connection with the solicitation by the Board of Directors (the “Board”) of Yahoo! Inc., a Delaware corporation (“Yahoo,” the “Company,” “we,” or “us”), of proxies for use in voting at the 2016 annual meeting of Yahoo shareholders (the “annual meeting” or the “meeting”) to be held at the Santa Clara Marriott, located at 2700 Mission College Boulevard, Santa Clara, California, on June 30, 2016 at 2:00 p.m., local time, and any adjournment or postponement thereof. On or about May 27, 2016, proxy materials for the annual meeting, including this proxy statement and the Company’s 2015 Annual Report to Shareholders (the “2015 Annual Report”), are being made available to shareholders entitled to vote at the annual meeting. The date of this proxy statement is May 23, 2016. HOW TO VOTE in advance of the annual meeting 1. Have your proxy card or voting instruction form in hand. You will need the printed proxy card or voting instruction form you received from us or from your broker, bank, or other nominee (or if you received our proxy materials by email, you will need that email). 2. Choose a voting method. ON THE WEB • Go to the website identified on your proxy card or voting instruction form, or follow the link provided in your email • Enter the control number (from your proxy card, voting instruction form, or email) • Follow the instructions BY TELEPHONE • Call the phone voting number (different shareholders use different numbers, find yours on your proxy card or voting instruction form) • Follow the recorded instructions BY MAIL • Mark your votes on your paper proxy card or voting instruction form • Sign, date, and return the proxy card or voting instruction form by mail using the enclosed envelope 3 PROXY SUMMARY This summary highlights information generally contained elsewhere in this proxy statement. This summary does not contain all of the information you should consider, and you should read the entire proxy statement carefully before voting. Annual Meeting of Shareholders Date: June 30, 2016 Time: 2:00 p.m., local time Place: Santa Clara Marriott 2700 Mission College Boulevard Santa Clara, California Record Date: May 20, 2016. Shareholders of record as of the close of business on May 20, 2016 are entitled to attend and to vote at the annual meeting. Beneficial owners as of that date are welcome to attend the annual meeting and may vote their shares at the meeting if they obtain, and bring with them to the meeting, a valid legal proxy from the broker, bank, or other nominee that holds their shares to vote the shares at the meeting. Admission Requirements: You must bring proof that you owned Yahoo stock on the record date in order to be admitted to the annual meeting. For details, see “Questions and Answers about our Proxy Materials and the Annual Meeting—Can I attend the annual meeting? What do I need for admission?” on page 10. Please also be prepared to provide a form of government-issued identification that includes your photo, such as a driver’s license or a passport. Voting Matters and Board Recommendations Board More Recommendation Information Proposal 1 Election of directors FOR each nominee Page 17 Proposal 2 Advisory vote to approve executive FOR Page 36 compensation Proposal 3 Ratification of appointment of FOR Page 41 PricewaterhouseCoopers LLP as independent registered public accounting firm 4 PROXY SUMMARY The Board’s Director Nominees (page 18) Name Director and Board committees Since Independent Occupation Tor R. Braham 2016 ✓ • Former Managing Director and Global Audit Committee Head of Technology Mergers and Acquisitions, Deutsche Bank Securities Eric K. Brandt 2016 ✓ • Former Executive Vice President Audit Committee (Chair) and Chief Financial Officer, Strategic Review Committee Broadcom Corporation David Filo 2014 X • Co-Founder and Chief Yahoo, Yahoo! Inc.