Yahoo CEO Marissa Mayer Could Be In Line For Huge Payday After Verizon Deal

Image courtesy of Morton Fox

As you may have heard, Verizon reached a deal over the weekend to purchase Yahoo for $4.8 billion. What this means for the ‘90s internet relic, or those who serve at its helm is still unclear, but at least one of those people — CEO Marissa Mayer — stands to make a pretty penny if she indeed leaves the company when the deal is all said and done. 

The Washington Post reports that after four years running Yahoo, Mayer could walk away with as much as $219 million if she isn’t asked to stay with the company after the deal is officially finalized in a few months.

That figure isn’t just what Mayer would receive as severance, but it also includes her “realized pay” since taking over the top spot at Yahoo in 2012. This is according to Equilar, an executive compensation research and consulting firm, which calculates that Mayer earned $114.7 million between 2012 and 2015.

That figure rises considerably when stock options are included, bringing the payout to $162.1 million.

But even that isn’t all. If Mayer leaves within a year of the “change-in-control” acquisition, she’ll be in line for a golden parachute valued at $56.8 million, the Post reports.

Equilar notes that if Mayer does receive a severance package of $58 million, it would be among the top 15 largest payouts since 2005, and equal to one provided to former Yahoo CEO Henrique de Castro, who left the company before Mayer was hired away from Google.

Bloomberg reports that large payouts like this aren’t uncommon, even for CEOs of so-so companies.

Often, Bloomberg points out, these severance deals compensate outgoing executives based on stock options and not their performance.

For example, Jeff Smisek, who was ousted as CEO at United Airlines in 2015, stood to receive $28 million in compensation — including free flights, $4.7875 in a “separation payments,” and $3.4 million in stock — all amid an investigation.

“Share price isn’t a very precise way of compensating for value delivered. Indeed, share price may be one of the worst ways to judge an executive’s performance,” Bloomberg’s Barry Ritholtz writes, suggesting an overhaul do the compensation system. “It rewards executives for positive events beyond their control, and doesn’t do an effective job of measuring the impact of management on a company’s overall performance.”

Marissa Mayer’s total pay as Yahoo CEO could end up reaching almost $219 million [The Washington Post]
CEOs Are Paid Fortunes Just to Be Average [Bloomberg]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.