Yahoo shareholders will be voting soon on whether to approve a severance package that would award the departing CEO Marissa Mayer with more than $23 million in cash and stock.
A preliminary Schedule 14A proxy statement is being sent to shareholders in preparation for a special stockholder meeting, yet to be scheduled, at which approvals will be sought for Verizon’s acquisition of Yahoo’s internet business. Following revelations of two massive data breaches during an audit process, $350 million was shaved from Yahoo’s previously agreed upon $4.8 billion sale price to Verizon Communications.
However, in order for Mayer to get the severance, both of the following need to occur (double trigger):
- Change in control (in other words, a successful transaction close)
- Terminated without cause or leave for good reason.
Additionally, if double trigger happens (in Mayer’s case or any other Yahoo employee), Verizon as the acquiring company would pay the severance.
Mayer will be stepping down from the board and as CEO of the remaining company, to be named Altaba. The leadership of the new business under Verizon (separate from Altaba) has yet to be determined. The company is not providing further information at this time.
“For me personally, I’m planning to stay,” Mayer said in a letter following the transaction announcement in July 2016. “I love Yahoo, and I believe in all of you. It’s important to me to see Yahoo into its next chapter.”
Other departing Yahoo execs are also in line for golden parachutes, should stockholders approve. Lisa Utzschneider, Yahoo’s chief revenue officer, would receive $16,536,363; Ken Goldman, Yahoo’s chief financial officer, $9,478,568; and Yahoo cofounder David Filo, $15,000 in cash and two years of health insurance.
Mayer, who took the CEO spot at Yahoo in the summer of 2012 after moving over from Google, was challenged by both unprofitable business dealings and failings in the company’s security implementations. First of all, Yahoo was troubled when she arrived (she was the company’s third CEO in less than a year). But her overseeing of the purchase of more than 50 companies at a cost of more than $2.3 billion soon turned unprofitable. For example, the company’s acquisition of Tumblr for $1.1 billion was soon written down by more than $700 million.
The company also suffered from instability in its security appointments after Mayer arrived. It went through a number of CISOs in a short time. Alex Stamos, CISO when Mayer arrived, quit after Mayer approved a request from the federal government to allow Yahoo user emails to be searched. A number of other executives also departed.
Thomas J. McInerney, 52, a member of Yahoo’s board since 2012, will take over the reins of the new holding company, to be rebranded as Altaba.