Embattled Yahoo CEO Marissa Mayer shared details Tuesday about the Internet company's deteriorating quarterly results, yet the big question on the minds of investors remained unanswered: Now that a reported deadline for bids to buy the company has passed, who will end up winning?
But last week, one question about Mayer and Yahoo did come clear: If a sale takes place and she and the company part ways, Mayer now seems assured to walk away with a payout, thanks to a recent change in the company's corporate documents.
Last year, as Yahoo's board debated between spin-offs, reverse spin-offs, and ultimately, a sale, many wondered what Mayer -- a highly compensated CEO -- would get if control of the company changed hands and she exited stage left. Since then, pressure on her has only grown, with an activist investor launching a proxy fight to try and replace the company's entire board -- including Mayer.
Last Thursday, Yahoo reported that it had clarified certain severance plans in order to say that executives would be paid severance if the company sold “all or substantially all” of its operating business. Before that, it had said a change in control, among other things, would mean "the sale or disposition by the company of all or substantially all of the company's assets."
The old language technically left open the question of whether Mayer would qualify for a payout if Yahoo just sold its search business and web properties. After all, what most people think of as Yahoo is actually only a small part of the company: The bulk of its value is not in the core Internet business, but in the big stakes it owns in Alibaba Holding Group and Yahoo Japan.
So how much could Mayer be in line to get -- again, if the company changes hands and she leaves? Back in December, some reports gawked at the payout she'd supposedly qualify for if the company changed hands, noting that Yahoo's 2015 proxy statement said it could approach $158 million. But that figure was based on a higher stock price from the end of 2014, and included equity grants that had vested since the proxy statement. Back in December, Equilar, the executive compensation research firm, offered an updated number, pinning it closer to $59 million.
Dan Marcec, a spokesman for Equilar, estimates the figure would now be about $45 million, based on Monday's stock price and including recent performance awards, though he notes that's a rough figure. Last week, the Wall Street Journal calculated that the value of Mayer's unvested options and restricted stock, which would vest if she was terminated in the event of a change in control, would be more than $48 million. (An email to a Yahoo spokesperson requesting a comment on those figures was not immediately returned.)
Any figure in that range remains quite the golden parachute. According to an Equilar analysis from last year of the largest change-in-control payments made to CEOs over the past 10 years, it would rank among the 20 largest.