Thomas McInerney, the new CEO, will get a starting base salary of $2 million, double that of Mayer’s current
Yahoo has been sailing the rough tides and has reached the point where the business may need to be diluted to stay sustainable. As Yahoo plans to sell its business to Verizon, it has reportedly picked a new CEO to replace Marissa Mayer once the deal gets closed. In line with that, reports suggest the new CEO’s salary will be way higher than what Mayer draws.
The company is reportedly selling its technology and advertising business to Verizon, and the remaining part will consist only of the hoard of Alibaba stocks that Yahoo owns, its stake in Yahoo Japan, and a miscellaneous array of smaller investments. It is quite evident that with the remnants, it will not be as big a deal to handle as what Mayer had in her kitty.
That said, leaving behind the unsuccessful attempts to make the business profitable, Mayer will be walking away with a $23 million severance package. Add to that the $69 million worth of unexercised stock options awarded to Mayer, plus the $97 million of Yahoo stock she already owns (which she’ll be free to sell when she leaves the company), and her net worth is set to increase by about $189 million.
However, it seems an even sweeter deal is being offered to her replacement, Thomas McInerney. McInerney, the former chief executive of IAC—the Internet media company once known as InterActiveCorp, which owns dating sites including Match.com (MTCH)—will get a starting base salary of $2 million as Yahoo’s new CEO. That’s evidently double the $1 million base salary that Mayer currently takes home.
Moreover, McInerney will be paid $4 million in his first year working there, if he’s able to earn his target bonus, which is reportedly equal to his base salary. That’s 25 per cent more than the $3 million the company is paying Mayer, as a salary and cash bonus this year. On top of that, McInerney will also be eligible for as much as $24 million in annual stock awards. If he were to receive the maximum amount, it would also be twice as much as Mayer’s grant in 2015, the last full year before the Verizon deal was announced.
The new compensation structure and the amount in question is not justified from a gender wage gap angle. In addition, experts opine that McInerney’s compensation is all the more astonishing considering his job responsibilities, post the Verizon deal. While Mayer was expected to flip the destiny of Yahoo’s struggling media business making it more profitable and sustainable, McInerney will be paid a huge amount to sit atop a business that will basically be running itself.
With the closing of the deal, Yahoo will not be the same as it is today, but merely an investment company, not all that different from a mutual fund.