Yahoo Inc.'s chief technology officer is resigning after nearly a decade on the job, creating a management void as the Internet icon tries to mine more profits from a recent upgrade to its system for delivering online ads.
Farzad Nazem's plans to leave the company were disclosed Wednesday in a U.S. Securities and Exchange Commission filing and a posting on Yahoo's Web site.
The resignation becomes effective June 8, just six months after Yahoo named Nazem head of the company's newly created technology group as part of a management shakeup. He already had been Yahoo's chief technology officer since April 1998, two years after he joined the company as senior vice president of product development.
While Yahoo searches for Nazem's replacement, company co-founder Jerry Yang will oversee the technology group as interim "executive sponsor." Fellow co-founder David Filo also will continue his focus on technology, the company said in statement.
In the posting on Yahoo's Web site, Nazem, 45, said he simply wants to retire. "After spending the last 26 years in this fast-paced technology industry, I've finally decided it's time to slow down," wrote Nazem, who also worked at business software maker Oracle Corp. before joining Yahoo.
Nazem's departure comes at a pivotal time for Yahoo. After suffering an 11 percent drop in its first-quarter profit, Yahoo is depending on long-awaited improvements to its advertising platform to boost its fortunes during the second half of this year.
In the Web posting, Nazem said he delayed his retirement until the new advertising formula was completed and he felt confident that his mission had been accomplished.
"With all this in place now, I know I'm leaving a strong, dedicated, and focused organization that is ready to define the next wave of the Internet revolution," Nazem wrote.
Yahoo parted ways with another of its top executives, former Chief Operating Officer Dan Rosensweig, at the end of March. Rosensweig left as part of the management shake up announced in early December. Yahoo is still looking for a new executive to oversee the "audience" group that was formed as part of that reorganization.
Nazem will walk away from Yahoo as a wealthy man, having made millions by exercising the stock options that he accumulated during his tenure. In the last four years alone, Nazem has realized $213 million in gains by exercising some of his stock options, according to SEC filings.
Under his separation agreement, Nazem will retain the rights to another 2.97 million stock options with exercise prices ranging between $20.58 and $34.75 per share as long he adheres to certain restrictions, including a three-year prohibition against taking a job with Yahoo rivals Google Inc. or Microsoft Corp.
(MSNBC.com is a joint venture of Microsoft and NBC Universal News.)
Yahoo also will pay Nazem the balance of his $500,000 salary and accelerate the vesting rights of his restricted stock in the company, according to SEC documents.
Most of Nazem's stock options are currently worthless because Yahoo's market value has sagged since the end of 2005. Yahoo shares dipped 2 cents to finish Wednesday's regular trading at $28.38, then shed another 18 cents in extending trading after the disclosure of Nazem's resignation.