Following the pending sale of its core business to Verizon, Yahoo on Monday announced a plan for its future, naming board member Thomas McInerney to replace Marissa Mayer as the company's chief executive officer once the deal closes in July.
Yet, with a higher base salary and annual cash and stock bonus at least double the amount Ms. Mayer receives, Mr. McInerney’s compensation has drawn much controversy as the tech company transitions into an investment firm.
According to the offer letter made public on Monday, McInerney, the former executive of the internet media company InterActiveCorp that owns dating site Match.com, will receive a starting base salary of $2 million, double the $1 million that Mayer currently takes home.
Yahoo, however, is expecting to pay him a total of $4 million in salary and cash bonus, which includes a performance-based annual incentive award of another $2 million and is 25 percent more than the $3 million Mayer will receive this year. In addition, McInerney can take home as much as $24 million in a long-term incentive award.
After nearly five years of leading Yahoo, Mayer is stepping down with a $23 million severance package, according to a proxy statement the company filed on Monday. With $69 million worth of unexercised stock options awarded to her and $97 million of Yahoo stock she already owns, Mayer is expected to have a net worth increase of about $189 million, according to Fortune.
As Yahoo sells its technology and advertising business to Verizon for $4.8 billion, what's left of the once-most-popular-website will be called “Altaba,” and will become an investment firm, according to a filing with the Securities and Exchange Commission on Jan. 9. As The Christian Science Monitor reported in January:
“The name of the remaining part of the company (consisting of a stake in Alibaba and Yahoo Japan) is a combination of "alternate" and Alibaba, a Chinese e-commerce company with whom Yahoo partnered. It also reflects the new nature of the company, which would primarily include stakes in Alibaba (worth about $35 billion) as well as a smaller stake in Yahoo Japan (worth about $8.5 billion).”
Though sources told Fortune that McInerney will also be in charge of resolving “a long and significant tail of Yahoo operating company liabilities,” with no intention of selling these stocks or buying new ones, McInerney’s role of managing and monitoring the fund’s investments is “little more than a glorified trustee,” Fortune said.
The search engine company in recent months announced two major data breaches back in 2013 and 2014, which it said caused millions of its users’ personal information to be stolen. Mayer has taken fire for the breaches, losing her $2 million annual bonus for 2016 and forfeiting at least $12 million in annual equity grant, according to the Mercury News. In the wake of the announcements, Yahoo was forced to cut its price by $350 million in its deal with Verizon.
While it is still unclear if Mayer will have a position at Verizon or Altaba, she will not be part of Altaba’s board.