New York-based Verizon Communications (NYSE:VZ), the largest wireless communications service provider in the United States, is buying Yahoo (NASDAQ:YHOO) for $4.49 billion. However, according to the agreement, Marissa Mayer the CEO of Yahoo has to step down once the takeover is complete.
Mayer to Draw Almost the Same Money She Made As the CEO
The company made a filing on Monday, according to which, Marissa Mayer will get around $186 million once she leaves Yahoo. Incidentally, she has already received more than $200 million as salary and bonuses since 2012, when she took over as the CEO.
She has been the CEO of Yahoo for the last five years but has failed to turn around Yahoo’s falling business. Mayer currently holds 4.5 million shares of Yahoo stock and options. She also has restricted stock, which will vest once the Verizon deal goes through. Of course, the shareholders of Yahoo will have to approve or reject the deal on June 8th. But the vote is expected to go through in favor of the Verizon deal.
On top of this, Marissa Mayer will also be paid a $3 million golden parachute as the cash severance.
Mayer’s Years at Yahoo
When Mayer joined Yahoo from Google in 2012, it was deemed as a major coup as Yahoo was battling it out with Google. But the tech and search firm was already struggling at the time and was losing out to their competitor. She was entrusted the responsibility of turning things around.
Mayer started off by trying to expand the content business of Yahoo. They paid $1.1 billion for the blogging platform Tumblr in 2013, hired big-time journalists like the former CBS news anchor Katie Couric, and expanded into television. However, both shareholders and advertisers remained unimpressed. In the end, these investments proved to be ill-timed, as Yahoo’s fortunes did not turn to the better.
Plus, there were security breaches where hackers compromised 1 billion user accounts, which left Yahoo in a worse state than when she joined. Mayer was even stripped off her annual bonus after these security breaches. To make matters worse, Verizon threatened they may pull out of the deal as clearly the security measures at Yahoo were subpar.
Microsoft offered $44.6 billion to Yahoo, which was ten times more than the offer of Verizon, but Yahoo declined. Eventually, Merissa could manage just $4.49 billion from the sale to Verizon.