SAN FRANCISCO: Yahoo lured Marissa Mayerfrom Google with a lavish pay package that could total $129 million over five years – if she is able to get the company growing.
Yahoo disclosed details of its new chief executive’s compensation package in a regulatory filing on Thursday. It is larger than the pay package of the average chief executive in Silicon Valley, but not the largest among chiefs of publicly held technology companies.
Tim Cook, Apple’s chief executive, has a compensation package valued at $378 million in salary, bonus and stock award that vests over 10 years. His annual base salary is $900,000.
Mayer’s pay package is higher than that of Meg Whitman, her counterpart at Hewlett-Packard. When HP hired Whitman as its chief executive, it offered her a $1 salary and stock options valued at $16.1 million that she cannot exercise unless HP’s stock meets certain targets by October 2013. She will also get a $6 million annual bonus if all goes well.
Mayer’s former boss at Google, Larry Page, receives only $1 in annual salary. But as a co-founder of the company, he owns more than 26.2 million shares of Google stock, which, at Thursday’s closing price of $593.06 a share, is worth about $15.5 billion.
Mayer’s package includes a $1 million annual base salary and a bonus of up to $4 million a year, depending on the company’s performance. She will receive $12 million in the form of a stock payment this year – half of it in restricted stock, the remainder in options – and comparable awards in subsequent years. Yahoo will also give her a one-time “retention equity award” worth $30 million that vests over five years.
Google never had to disclose Mayer’s salary because she was not one of the highest-compensated executives at the company, although she was one of the most visible. But to make up for what she left on the table at Google, Yahoo said it would pay her a one-time “make whole” stock grant of $14 million.
“It’s big,” said Colin Gillis, an analyst at BGC Partners. “But Yahoo is a multibillion-dollar company. If she can create value, it’s a small percentage. If she doesn’t, she’ll join a long succession of Yahoo CEOs with sizable pay packages who did not add value.”
Yahoo offered Mayer more than it had her immediate predecessors, Scott Thompson and Carol Bartz. It offered Thompson a $1 million base salary and stock grants worth about $22.5 million. He left four months into the job, without severance, amid accusations that he had exaggerated his credentials on his resume, but he managed to keep $7 million in cash and stock grants that had already vested.
When Bartz joined Yahoo in 2009, the company offered her a $1 million salary and stock and cash grants worth $19 million, plus options worth 5 million shares that exercised at $11.73.
Mayer, known for holding extravagant parties, collecting expensive art and wearing designer gowns, does not lack for money. As Google’s 20th employee, she made millions in Google stock while running its search business and overseeing successful products like Gmail and Google Maps.