The rumors are that new Yahoo! (NASDAQ: YHOO) CEO Marissa Mayer has a net worth of $300 million because of her holding of Google (NASDAQ: GOOG) stock. That would make her new salary of $1 million to run Yahoo! modest.
However, the total awards based on performance and retention are much more sizeable than the base
According to an 8-K filed with the SEC:
The Company entered into an employment offer letter dated July 16, 2012 (the “Agreement”) with Ms. Mayer. The Agreement has no specified term, and Ms. Mayer’s employment with the Company will be on an at-will basis. The material terms of the Agreement are summarized below.
Base Salary and Bonus. Ms. Mayer will receive an annual base salary of $1,000,000, subject to annual review. She will also be eligible for an annual bonus under the Company’s Executive Incentive Plan with a target amount of 200% of base salary. The actual amount of the annual bonus will be determined by the Compensation and Leadership Development Committee of the Board (the “Compensation Committee”) based upon two criteria: (i) the Company’s financial performance and, (ii) if applicable under the Company’s bonus plan for that year, Ms. Mayer’s performance. The 2012 bonus would be prorated based on her period of employment in 2012.
2012 Annual Equity Awards (Vesting Over Three Years). Ms. Mayer will also receive an equity award for 2012 that will vest over 3 years. $6,000,000 of this equity award will be granted as restricted stock units, vesting over 3 years, and $6,000,000 as a stock option, which will vest over 2 1/2 years, subject to satisfaction of performance criteria. The number of restricted stock units and stock options to be granted will be calculated based on the Company’s stock price on July 26, 2012 (the next regularly scheduled grant date), in accordance with the Company’s standard equity valuation practices. The restricted stock units will be granted on July 26, 2012. The stock option is expected to be granted in November 2012 and will be subject to both time-based and performance-based vesting requirements. The Compensation Committee will establish the performance vesting criteria after consulting Ms. Mayer.
After 2012, Ms. Mayer will be eligible to receive annual equity grants when such grants are made to senior executives. Subject to the Compensation Committee’s discretion, the Company contemplates that the target value of such awards will not be less than the target value of her 2012 annual grant.
One-Time Retention Award (Vesting Over Five Years). Ms. Mayer will receive a one-time retention equity award that will vest over 5 years. $15,000,000 of this equity award will be granted as restricted stock units on July 26, 2012 vesting over five years, and $15,000,000 in the form of a performance-based stock option that is expected to be granted in November 2012. The stock option will be subject to both time-based and performance-based vesting requirements over the next 4 1/2 years. The Compensation Committee will establish the performance vesting criteria after consulting Ms. Mayer.