The Yahoo-Verizon merger may have hit a few roadblocks on the way but the transaction is nearing a closure. With its $4.48 billion acquisition by the telecom giant, one of the most renowned Internet giants would officially cease to exist. Yahoo’s shareholders are mostly expected to vote in favor of the buyout of the company’s core assets, through a voting process scheduled for June 8.
If you’re a 90’s kid then you’re aware of the importance of Yahoo in your life at one point in time. This acquisition will result in the end of an era but also the struggle to restore the company back to its original status amid pressure from competitors. CEO Marissa Mayer worked five years to turn around the Internet giant but failed. And the ultimate cost of this failure will turn out to be around $186 million for the chief executive, who will exit the company post its acquisition.
According to documents received by the shareholders about the Verizon deal, Mayer will be handsomely compensated for constant efforts to turn around the business. It has been noted that she currently holds Yahoo stock, stock options, and restricted stock units worth a total of $186 million. This valuation is based on the company’s stock price of $48.15, according to the data filed on Monday.
The documents further mention that her total compensation would surely come out to be around $200 million, which also includes her compensation, bonus and stock options over the past five years. This will no longer include the valuation of stock she has already sold or the bonus she decided to give up due to the massive cyber security breaches revealed earlier last year. Mayer, instead of taking on the blame herself, pushed over the responsibility to Yahoo’s general counsel Ron Bell — who has now departed from the company.
While Mayer has already foregone her additional equity and bonus compensation, she is still destined to receive a total of around $23 million before her exit from the company. Her severance package is a mix of stock, cash and other benefits. This is known as ‘golden parachute‘ compensation, where she is due to receive $3 million in cash, $24,000 in benefits, and $19,971,367 in equity.
As New York Times points out, the massive compensation being received by Yahoo’s soon-to-be former chief executive is essentially based on the “208 percent increase in Yahoo’s stock price” since she joined the venture from Google back in 2012. The internet giant has struggled to keep its cool when it comes to prominent products such as search, e-mail, news, and advertisements.
However, hefty investments by other hugely popular Internet giant’s namely Chinese e-commerce giant Alibaba and Yahoo Japan (an affiliate which is controlled by Japan-based SoftBank) helped keep their ship afloat and share prices have been driven towards the high side.
Yahoo’s remaining assets, including a massive patent portfolio, are staying under the control of these investors and they decided upon a new name for the company — Altaba. This venture will be spearheaded by Thomas McInerney, a Yahoo director who carried out the Verizon deal. There is currently no information but the company is looking to unload some of the Yahoo Japan shares to create value.
As for Yahoo’s acquisition deal, it went through its own crests and troughs — but mostly crests because of the massive security hacks which happened back in 2013 and 2014. They were revealed just days after the announcement of the acquisition. Yahoo reported that breaches, which involved the use of forged cookies had resulted in the loss of personal data minus payment info of more than a billion users. It said that internal security team had then dismissed the possibility of a hack (even though some employees were aware of it).
After months of security investigations, with involvement from private individuals, the U.S Department of Justice has brought in accusations against two Russian FSB officers as well as two criminal hackers of being behind the massive Yahoo data breach. It has indicted four defendants on charges of computer hacking, economic espionage, and other criminal offenses. But, Marissa Mayer is still going to walk away unscathed — except for hubbub about her questionable decisions and leadership skills.