Yahoo chief executive Carol Bartz has sold millions of dollars worth of company shares in what many see as a sign that she is losing faith in Yahoo's ability to compete. The move is likely to upset shareholders, and will lower employee morale.

Regulatory filings uncovered by The Guardian show that Bartz sold $830,000 (£508,000) of Yahoo stock in March, and $1.4m (£857,000) in June.

Bartz was appointed head of Yahoo in January, and was given options on five million of the firm's shares to sell at a profit.

However, investors generally expected Bartz to refrain from cashing in on the stock, given her million dollar salary and apparent eagerness to repair Yahoo's confidence after a disastrous end to 2008. Yahoo's share value was in a constant flux at the end of last year because of a failed Microsoft acquisition and a broken search deal with Google.

Yahoo announced more than 2,000 job cuts last year, and instigated a salary freeze in January.

The recent deal signed with Microsoft, in which Bing will power Yahoo search, could result in further job cuts, according to Bartz, while Yahoo's share price has fallen 10 per cent in recent months.

Bartz has attempted to boost morale in an email to staff. "So get out of the sugar low. We have work to do. Stop staring at our navels, stop arguing with each other. Stop debate, debate, debate, and let's focus on the competition," she wrote.

However, morale is unlikely to improve when senior executives sell their stock options, as they should be the people with the most faith in the company.

Investors, meanwhile, tend to rest easier when executives own big stakes in the companies they run, as it is believed that they have the shareholders' interests at heart.

"Two million already cashed out for Bartz is too much, too soon," Yahoo investor Eric Jackson of Ironfire Capital told The Guardian. "It doesn't really fit with the 'I didn't need this job as I was retired' image she portrays."

Influential Yahoo board member Carl Icahn trimmed his stake in Yahoo to 4.5 per cent from 5.4 per cent at the end of August, according to regulatory filings.

The sale should not be taken as a sign that Icahn is apprehensive about the future of Yahoo, said the filing, although generally such a move would indicate a decreasing endorsement of Bartz's agenda.

Yahoo did not respond to requests for comment.