Yahoo revealed in a regulatory filing that it could be paying its new CEO Marissa Mayer a total of close to $60 million to turn the company around.
The mega-sum includes salary, equity grants, stock options, a make-whole payment for the Google shares she left behind and, perhaps most remarkably, a $30 million one-time retention award.
The amount, which is a whole lot more than what the last two Yahoo CEOs — Carol Bartz and Scott Thompson — were paid is, um, rather large.
(Side note: Mayer is already extraordinarily wealthy from her stint at Google, where she was its 20th employee.)
Here’s the breakdown of the largely performance-based compensation:
The salary amount is typical at $1 million, with an annual bonus of up to 200 percent of the base salary, which is $2 million. But, according to Yahoo’s employment letter, she could also get up to a 400 percent bonus, dependent on exceeding targets, which is $4 million.
Mayer also gets an equity award for 2012 of $12 million in stock ($6 million) and options ($6 million) that vests over three years. (She could get another similar grant annually, but I did not include that in the overall number, which is $12 million annually or more if she exceeds targets.)
The really big number is a huge up-front, one-time retention award, vesting over five years, of $15 million in stock and $15 million in options.
Finally, there is a make-whole payment of $14 million for the stock she left behind at Google.
Overall, that means about $5.4 million for the rest of this year and could add up to $20 million each year to come.
The pay package was hotly debated by the board as to whether the high-profile exec was worth the huge amount.
While Mayer is considered a talented techie, a very strong decision maker and adept at product innovation, some of the board’s directors raised concerns about her and paying so much to retain her.
One issue: She had been notably passed over by Google CEO Larry Page for one of the major unit jobs in his reorganization of the company, while others in her peer group had been promoted.
That said, since such company ups and downs happen all the time, others argued that Mayer was just the kind of disruptive agent of change that Yahoo needs, especially because she could inspire its engineers and also attract much needed talent.
The enormous compensation was pushed through, said several sources, by Dan Loeb, the one-time activist shareholder who now appears to be the puppet master of the Yahoo board. He owns about six percent of the Silicon Valley Internet giant.
Her appointment has surely garnered a lot of attention for Yahoo, with massive media coverage of the dynamic young exec. Some of the coverage has focused on her being a woman and also on the fact that she is currently pregnant.
But much of it is focused on how Yahoo — a deeply troubled company that has been trying to revive itself for many years now without success and with a lot of management mishegas — has been able to attract such a high-profile and impressive-resumed leader to goose both its products and its stock.
Let’s hope Mayer can do just that, because Yahoo is surely paying up big-time for the privilege.
Here is the offer document from Yahoo: YHOO-20120719-8K-20120715
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Via: All Things D