Yahoo Inc chief executive officer (CEO) Marissa Mayer could walk away with a US$55 million severance package if the company’s auction of its Internet operations culminates in a sale that ousts her from her job.
The payout disclosed in a regulatory filing on Friday consists of cash, stock awards and other benefits that Mayer would get should she be forced out as chief executive officer within a year after a sale.
Although Yahoo’s board is still evaluating takeover offers, most investors are betting that the company will decide to sell its well-known brand and an Internet business that includes a popular e-mail service and sections focused on sports and finance.
Mayer, a former Google executive, has been unsuccessfully trying to turn around Yahoo for nearly four years. Instead, Yahoo’s long-running slump has deepened during her reign, making her pay a prickly topic among investors.
“I don’t think this management team has done anything to merit a huge payout,” said Eric Jackson, managing director of SpringOwl Asset Management, a Yahoo shareholder critical of Mayer’s leadership.
Mayer received a compensation package valued at nearly US$36 million last year under the US Securities and Exchange Commission’s accounting rules. Yahoo’s board maintained in its filing that it was only worth about US$14 million as of April 1.
The chances of a sale happening at Yahoo increased earlier this week when the Sunnyvale, California, company reached a truce with activist investor Starboard Value LP, an outspoken critic of Mayer’s that has been pushing her to sell.
Starboard chief executive officer Jeffrey Smith is now one of three Yahoo directors on a special committee assessing the bids for the Internet business.
Although Yahoo’s has not set a timetable for reaching a decision, most analysts expect a deal to be struck within the next two months at a price ranging anywhere from US$4 billion to US$10 billion.
In an opinion shared by most of his peers on Wall Street, RBC Capital Markets analyst Mark Mahaney said he believes Verizon Communications Inc is the most likely buyer.
After snapping up AOL Inc, another fallen Internet start, for US$4.4 billion, Verizon has publicly expressed interest in taking over Yahoo.
Yahoo’s stock added US$0.01 to close on Friday at US$36.60, more than double its value in July 2012 when the company hired Mayer, but the run-up has been driven by the rising value of Yahoo’s stake in China’s e-commerce leader, Alibaba Group Holding Ltd (阿里巴巴).
The investment in Alibaba was made long before Mayer’s hiring, although she has been unsuccessfully trying to find a legal way to avoid paying taxes when the stake is sold.
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