Yahoo Former CEO Scott Thompson Compensation Agreement

Less than six months after he joined Yahoo! on January 9, 2012, Scott Thompson has resigned as Yahoo!’s President and CEO. His resignation came 10 days after it was discovered by activist hedge fund Third Point LLC that his resume had been inflated with a fictional computer science degree. It is still unclear how this educational embellishment came to appear on Scott Thomson’s official biography, which was filed by Yahoo! with the Securities and Exchange Commission as well as its own website.

Following the claim of inaccuracies on Mr. Thompson’s biography by dissident investor Third Point , Yahoo! formed a special committee comprised of three independent board members and an independent legal counsel to conduct a review of CEO Scott Thompson’s academic credentials and the circumstances surrounding his appointment.

Over the weekend, Yahoo’s finalized the terms of Scott Thompon’s departure. The Board of Directors appointed Fred Amoroso as Chairman of the Board of Directors and Ross Levinsohn as interim CEO, replacing Mr. Thompson, effective immediately. Yahoo! also settled its proxy fight with Third Point LLC, and nominated three of the hedge fund’s nominees to its formal slate for election to the Board.

Based on public regulatory filings available on edgar.sec.gov, Mr. Thompson received an annual base salary of $1 million. He received an annual equity grant for 2012 with a value of $11 million and a special signing bonus grant of $5 million in February 2012. In addition, Mr. Thompson received a Make-Whole Cash Bonus of $1.5 million and the Make-Whole RSUs valued at $6.5 million, which match compensation he had to forego while the President of Paypal. These have clawback provisions. In addition, Scott Thompson received benefits, participated in an incentive compensation program (which was guaranteed on the low end for 2012), and had 20 days of paid leave.

According the Wall Street Journal, Mr. Thompson’s disclosed to Yahoo!’s board that he has been diagnosed with thyroid cancer. While there has not been a formal announcement from Yahoo!, WSJ’s AllThingsD contributor Kara Swisher claims the parting is “for cause,” which would allow the severance to be much smaller than a termination without cause. Wall Street Journal also reports that Mr. Thompson’s termination was negotiated over the weekend “along with some severance pay.”

Details of Scott Thompson’s golden parachute may or may not be disclosed by the new Yahoo! board in the proxy filings prior to Yahoo!’s 2012 annual meeting. If CNN Money is right, Thompson may even owe Yahoo! up to $7 million. In 2011, the annual meeting was held on June 23.