Marissa Mayer Could Be In Line For $150 Million Severance Benefit

Yahoo company logo - Year 2015 - Blue / purple colourMarissa Mayer, who was hired by Yahoo! in the summer of 2012 to much fanfare, has now become a $150 million headache for the company.

Mayer, who was one of Google's first employees and integral to the development of Google Images, Google News, Google Maps and other products, commanded a very high price tag when she was hired by Yahoo! The cost, it was thought at the time, was well worth it, as Yahoo! was struggling mightily and would be well-served by a jolt of energy from the youthful and experienced Mayer.

After Mayer was hired, Yahoo's stock essentially went straight up. The problem was that the stock went up due to its ownership pieces of Alibaba and Yahoo! Japan, and not because the company's core business was improving. As Alibaba moved closer to its initial public offering, Yahoo's stock continued to soar, masking any of the problems which the company's core business was suffering through.

Despite a number of acquisitions, including the company's $1.1 billion purchase of Tumblr in May of 2013, Yahoo's core business continued to stagnate. Lost in a sea of strong competition, Yahoo's core business was valued at less than $0 by investors. For Mayer, this was an embarrassing slap in the face.

Yahoo's stock has fallen more than 30% in 2015, which has led for some major investors in the company to call for Mayer's ouster. Others have called for the company to put the hold on its planned spin-off of its stake in Alibaba (and the potentially negative tax implications of such a move) and instead move forward with a sale of its core search and display business, which would essentially put Mayer out of a job anyways.

The company, surprisingly enough, has reportedly received some interest in its core business. The problem? A sale would trigger a change-in-control severance benefit that would see Mayer receive a severance package of roughly $150 million, which would include a restricted stock and option acceleration. So, Yahoo's Board of Directors will obviously have to factor this in before potentially moving ahead with any sale of the company.


Marissa Mayer, who was originally brought in to save Yahoo!, has now become a heavy weight that is now hanging over the company.

Filed under: General Market News

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