Terry Semel, Yahoo’s chief executive, took home a $25.7m bonus last year in spite of a sharp drop in the internet group’s share price as it struggled to keep up with Google in the search advertising market.

While hefty by some standards, the bonus was less than half of what Mr Semel took home in 2005 when the company’s stock price was higher, according to company filings.

Mr Semel has been struggling to convince investors that Yahoo can remain relevant in a world dominated by Google, which has a substantial lead over its rivals in online advertising.

Concerns about the company’s performance in the online advertising market led its shares to fall about 40 per cent last year.

Mr Semel received 800,000 fully vested options priced at $32.12 a share for his performance in 2006. In addition to the $25.7m bonus, Mr Semel received a base salary of just $1 last year.

Google also revealed in filings on Monday that the three billionaires who run the internet search group will take a $1 salary again this year, while four other top executives will receive pay increases of $200,000 each.

It marks the third consecutive year that Eric Schmidt, Google chief executive, and co-founders Larry Page and Sergey Brin have limited their salaries to $1.

Mr Page and Mr Brin are worth about $14bn each, while Mr Schmidt is worth about $5bn, according to Forbes magazine’s annual ranking of the nation’s wealthiest people.

Steve Jobs, Apple co-founder and chief executive, also receives just $1 pay a year. However, his private wealth stands at about $4.4bn, according to Forbes.

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