Yahoo!’s Yang Earns His !

4 06 2008

Exclamation points should be reserved for the rarest of occasions and the unfortunate use of that little bugger after Yahoo!’s name has been a point of consternation to me. But today, I grant Jerry Yang, the 39 year-old CEO of Yahoo!, the right to use ! with impunity.

Why the sudden change of heart?

Yesterday I read that two Detroit pension funds are suing Yahoo! over its failed deal with Microsoft because they claim the proposed compensation plan in the last proposal was too expensive. That is funny on so many levels. The pension funds contend that the plan creates an “incentive for massive employee walkout,” as though we’re talking about a Teamsters strike in a Miller brewing plant.

Yang, it seems, had the foresight and smarts to develop a plan that would protect the interests of his employees in the event the deal was inked. Now this is leadership.

Yang should be applauded for looking out for the best interests of his people if their jobs are diminished or eliminated—and even more curiously—if they leave on their own accord. Imagine Microsoft having to keep folks on board after a deal—or worse—having to keep them happy so they hang around. What would Wall Street say?

I’m Maria Lachapelle, SVP at Mullen PR; I cut my teeth doing communications for M&As in NYC during the 1990s. It wasn’t unusual for management teams to spend the majority of their time working with us to explain the positives of the business combination, but only 10 minutes at 2 in the morning deciding the fate of tens of thousands of employees.

Here’s why Yang’s plan is good business for both Yahoo! and Microsoft. As soon as they smell blood in the water, Yahoo!’s best strategists, technicians, sales & marketing folks—who are eminently marketable—will jump ship, probably going to competitor Google. Nervous employees look for other jobs. Take that worry out of the equation and they stay focused on performing, competing, being the best.

And now that heavyweights Carl Icahn and T. Boone Pickens are threatening to oust Yang for sticking to his guns on the plan, the communications teams at Microsoft might want to take care that Yahoo!’s talent pool doesn’t exit along with Yang.

What role do you think CEOs should play in protecting their employees when inking deals?

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