Yahoo boss sees salary fall to $1

Yahoo boss Terry Semel has had his annual salary reduced to $1 in exchange for millions of new stock options.

While Mr Semel will now only pocket about eight cents a month - subject to tax - he will not be short of money.

His latest three-year pay package comes after Mr Semel has reaped $429m (£228m) from his shares in the firm since 2003.

Yahoo said the 63-year-old's new deal was a means to both motivate and retain Mr Semel, who has the dual roles of chairman and chief executive.

Share price surge

Under the latest contract which runs until 2008, Mr Semel will be eligible to an annual bonus of up to one million stock options.

Since Mr Semel took over the top jobs at Yahoo five years ago, the firm's share price has tripled.

His previous annual salary was $600,000.

Over the past three years Mr Semel sold 18.1 million of his stock options for a gain of $429m.

He maintains another 17.7 million unexercised stock options.