Marissa Mayer severance pay could reach $293M with Verizon $4.8B acquisition of Yahoo

A little over three years ago, Yahoo CEO Marissa Mayer announced she would need to take a few weeks off because of her pregnancy to give birth to her son in October 2013. On Monday, Verizon announced it acquired Yahoo in a US$4.8-billion (A$6.41-billion) deal that would likely signal Mayer’s permanent exit from the tech company that once defined the internet.

Mayer actually wrote a letter to Yahoo employees, telling them “For me personally, I’m planning to stay. I love Yahoo, and I believe in all of you. It’s important for me to see Yahoo into its next chapter,” quotes Sydney Morning Herald. Since the buy-in is just fresh, Verizon Executive Vice President Marni Walden says it has not yet defined leadership roles.

While the situation indicates that until those roles are spelt out, Mayer still has a job, a new analysis by Equilar, an executive compensation research and consulting company, estimates a US$218.9 million (A$293 million) golden parachute for her. That would be Mayer’s severance pay if the new owners of Yahoo decide to let her go and replace her with another CEO.

Dan Marcec, Equilar spokesperson, explains the amount was based on Mayer’s realised pay of US$114.7 million (A$153.2 million) between 2012 and 2015 as CEO. It is broken down into cash received, shares owned and gains on stock options exercised. Mayer has more options to purchase more stocks valued at US$43.4 million (A$57.98 million) and she earned almost another US$4 million (A$5.34 million) in stock for 2016.

It totals to US$162.1 million (A$216.56 million), however, if Mayer is made to leave Yahoo within a year of a “change-in-control,” according to provisions of her contract with the company, Equilar reckons the current value of what the female CEO would be eligible to receive another US$56.8 million (A$76 million).

With Verizon’s buy-in, the company gets over 1 billion active monthly users, about 600 million of whom are mobile users. Yahoo also brings with the sale advertisers with target audience via streamlined advertising technology stack which combines power of data, content and technology.

Walden says Yahoo would be integrated with AOL. Mayer adds the sale of its operating business is an important step to unlock shareholder value for Yahoo.

VIDEO: Yahoo sets sale to Verizon