Finally, Yahoo! Inc. (NASDAQ: YHOO) has ditched its CEO Terry Semel, according to MarketWatch. And the new CEO is Jerry Yang, a co-founder of the company. Former CFO, Susan Decker was named president, positioning her for a chance to take over the top slot.

It is beyond me why Semel held onto his job for so long. He helped stabilize Yahoo after the dot-com crash but has stumbled from one incompetent quarter to the next for years. And he has taken home some truly outrageous pay -- a total of $452 million in salary, bonus and stock-option exercises since April 2001 [subscription] -- during which time Yahoo stock has risen four-fold.

However, in the last year the disconnect between Semel's pay and Yahoo's performance became too much to take. According to the New York Times, his total 2006 pay was $107.5 million during which time Yahoo's stock fell 35%. And directors concluded Yahoo was just not catching up fast enough with Google, Inc. (NASDAQ: GOOG) so Semel had to go.

Susan Decker had been positioned to take over the company as CEO. But Yahoo's board probably decided that she was not yet ready. However, she is considered to have the inside track during the CEO search to replace Semel. So Yang's appointment could be just a temporary move that will help stabilize the company until she is ready.

Or, with the stock up 8% to $29.62 in after-hours trading, he might just sell it. It would make a nice morsel for Microsoft Corporation (NASDAQ: MSFT).

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned in this post.

[See our live blog of the web cast in which Terry Semel discusses his resignation here.]