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Marissa Mayer lost $13 million and still made $42 million

Yahoo! Inc. (NASDAQ:YHOO) CEO Marissa Mayer earned $42 million the previous year. She could have earned much more if Yahoo had done well. $900,000 was deducted from Mayer’s bonus and $12.4 million from her stock awards because of the firm’s less than impressive 2014 monetary performance.

Performance Shortfall

Yahoo’s board assigns performance goals for its executives each year. They get compensated depending on the degree of achieving these targets. The firm’s revenue was only 92% of the $5 billion performance goal the previous year, and the adjusted profit was only 93% of the $1.5 billion Yahoo was anticipating.

That is the reason Mayer was entitled to only 55% of the $2 million target bonus. Also, Mayer collected 69% of a probable $40 million in stock awards.

If the firm had performed as per target, Mayer would have gained over $55 million. In terms of pay and stock compensation, she lost over $13 million.

A note of appreciation

Yahoo’s board commended Mayer’s accomplishments. The board stated that Ms. Mayer supplied exemplary leadership to the firm. She majorly boosted the firm’s reputation and invigorated the firms pool of employees.

According to the board, Mayer facilitated Yahoo’s mobile revenue growth, accelerated the speed of innovation at the firm, and brokered a deal to surmount competitor Rival as the default search engine on Firefox.

In spite of the firm’s dismal financial performance, Mayer’s pay wound up so high owing to Yahoo’s exemplary stock performance post her assuming the firm’s leadership in 2012. Yahoo’s share has become threefold over the previous three years – mainly due to its huge stake in Alibaba. If Yahoo’s stock had remained flat, the firm stated that Mayer would have made $17.1 million last year.

Mayer drew into her contract many one-time stock options and signing bonuses, which were encashable in 2014. As a result, she earned 68% more in 2014 compared to what she did in 2013. If she continues with Yahoo, she will not qualify for such an enormous payday each year.

Published by Fiona Gibson

Fiona is a finance graduate and an expert in analyzing market trends.

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