Yahoo could make Marissa Mayer one of top-paid CEOs

Yahoo could make Marissa Mayer one of top-paid CEOs

The new chief executive could earn up to $129 million over five years, through salary, cash bonuses and stock awards.
By Walter Hamilton and Andrea Chang, Los Angeles Times
July 20, 2012
Marissa Mayer,Yahoo Inc.'s new chief executive, could earn up to $129 million over the next five years, making her one of the country's highest-paid CEOs.

The compensation package, which was revealed in a regulatory filing Thursday, demonstrates the lengths to which the ailing technology firm went to lure Mayer from rivalGoogle Inc.

The 37-year-old could make up to $85 million in salary, cash bonuses and stock awards over five years. She also will get $44 million in one-time grants, including a $30-million "retention" stock award and $14 million in restricted stock for forfeiting her current Google stock.



"She's certainly going to be highly compensated if she succeeds," said Colin Gillis, an analyst at BGC Financial. "It's a multibillion-dollar company. If she creates value, it'll be a tiny fraction; if she doesn't, she'll be another one in a long line of Yahoo CEOs who had expensive compensation packages that didn't work out."

Given that much of her pay is coming in the form of restricted stock or options, the ultimate value of the package depends heavily on the performance of Yahoo shares in coming years.

The Sunnyvale, Calif., company needed to offer Mayer generous compensation because "it's not easy to get people to come into the Yahoo mess," said James F. Reda of Gallagher Benefit Services Inc., a human resources consulting firm. However, "if she doesn't perform, the Yahoo board hasn't been too shy of getting rid of people."

The contract calls for Mayer to receive a $1-million base salary — the same amount paid to Scott Thompson and Carol Bartz, the last two CEOs at Yahoo.

Mayer will get annual bonuses of $2 million to $4 million, depending on the company's performance.

She'll also get $12 million in stock-related awards in 2012, with the company saying it expects to pay that amount in subsequent years.

The contract also has additional perks: She's getting $25,000 to pay her lawyers for negotiating her lucrative contract and $50,000 a year for security services if she deems them necessary.

She announced Monday that she had resigned from Google to take the top post at struggling Yahoo.

A quirky math geek, Mayer is known as one of the most driven young executives in Silicon Valley with a penchant for designer clothing, art and cupcakes.

She joined Google 13 years ago as its 20th employee and first female engineer, rising through the ranks to most recently become vice president of local, maps and location services at the search engine giant, overseeing the company's local and geographical products.

But Mayer was passed over for a spot on Google's senior leadership team when Larry Page took over as CEO in April 2011, fueling speculation that she would leave the company.

Within hours of announcing she would become Yahoo's fifth CEO in as many years, Mayer revealed on Twitter that she and her husband, investor Zachary Bogue, were expecting their first child, a boy, in October. Mayer said Yahoo directors knew about her pregnancy during the hiring process. She plans to take a short maternity leave and has pledged to work through it.

Mayer's appointment came as a surprise: Yahoo interim CEO Ross Levinsohn, a media veteran, was widely expected to be named the permanent chief executive.