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Yahoo spends $58 million to fire its chief operating officer

Henrique De Castro, when he worked for Google in 2010. ( Reuters)

$58 million for 15 months of work.

That’s what Yahoo’s Chief Operating Officer Henrique De Castro got in severance pay when he was sent packing on Jan. 16, according to a Securities and Exchange Commission filing made public on Wednesday.

Marissa Mayer hired the top Google sales executive to revive Yahoo’s advertising not long after she left Google to take the helm at Yahoo in 2012.

Business Insider has a video of De Castro bumbling through a presentation of his vision for Yahoo which offers some insight into why Mayer ultimately cut him loose.

De Castro’s severance package, which included $1 million in cash plus equity, was valued at $17 million on Oct. 15, 2012, when he signed his offer letter.

That figure more than tripled during De Castro’s brief time at the company when Yahoo’s share prices rose, thanks to its 24 percent stake in Chinese Internet giant Alibaba.

When Yahoo hired De Castro, its board believed “he had a unique set of highly valuable skills and experiences that would be key to returning the Company to long-term growth and success,” the filing said.

Yahoo’s shareholders disagreed. On March 14, they filed suit, claiming the board wasted corporate assets and breached its fiduciary duty to understand how much De Castro would be entitled to receive.

Perhaps as a sign of contrition, Yahoo has since named three new board members: David Filo, Yahoo founder and technical adviser; Charles R. Schwab, founder and chairman of the Charles Schwab discount brokerage firm; and former Wal-Mart chief executive H. Lee Scott Jr.

Gail Sullivan covers business for the Morning Mix blog.



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