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.