“After the Verizon deal was announced on Monday, the Internet erupted in outrage that Yahoo CEO Marissa Mayer could collect as much as $55 million,” Stephen Gandel reports for Yahoo Finance.
“But, here’s the thing, that widely reported $55 million figure grossly understates what Mayer is likely to pocket after the deal closes,” Gandel reports. “The real number: $122,578,795.”
“The reason the Verizon deal is so lucrative for Mayer is because of a so-called change of control provision. Yahoo, like other companies, has long had the provision in Mayer and other executive’s pay agreement,” Gandel reports. “According to the clause, Mayer can immediately cash in all of her options and unvested stock if Yahoo gets acquired by another company, and Mayer leaves Yahoo within the next year.”
“But the clause technically didn’t provide for a sale of Yahoo’s main business unit, its internet operations, to another company, which is the deal Yahoo struck with Verizon,” Gandel reports. “But in April, Yahoo’s board voted to alter its change-in-control provision to include the sale of a major business unit as well; and with that, Mayer’s $123 million payday was created.”
Read more in the full article here.
MacDailyNews Take: It’s not really a “payday.” Most of that $122.5 million compensation lies in shares that were granted over Mayer’s four-year tenure as Yahoo CEO. In other words, regardless of your thoughts on the number of options granted over the period, she’s already “earned” that portion of her compensation – all of which, of course, Yahoo’s BoD approved. In other words, it’s not a parting gift.
Mayer took on an impossible job and deserves credit for staying with the thing when it would have been easy to simply walk away from the mess she inherited.
Marissa Mayer would be a wonderful CEO with the right company.