HIGH PRICE TO PAY
Yahoo’s CEO agrees to give up annual bonus, redistribute to employees in light of company’s massive breach,
SAN FRANCISCO— Yahoo CEO Marissa Mayer has agreed to forgo any annual equity award she might get for 2017 because of the massive customer data breach her company suffered in 2014.
The Yahoo board also voted to withhold her 2016 annual bonus — usually about $2 million (U.S.) — for the same reason.
Under her contract, her equity award is not to be less than $12 million per year.
The announcement came as information about Yahoo’s financial data and its sale to Verizon was posted with the Securities and Exchange Commission.
The filing also said that Yahoo’s general counsel Ronald S. Bell was resigning from the company and would get no payout in connection with his resignation.
In a public post on Yahoo-owned Tumblr, Mayer said she had “expressed my desire that my bonus be redistributed to our company’s hardworking employees, who contribut- ed so much to Yahoo’s success in 2016.”
Her reason for giving up her equity award was that she is the company’s CEO and that the 2014 breach happened during her tenure.
That breach, launched according to Yahoo by a state-sponsored actor (i.e. someone working for another government), affected data belonging to at least 500 million members.
A separate question has been whether Yahoo executives knew, or should have known, about the 2014 breach and should have notified Verizon when discussions about a purchase began in the summer of 2016.
The SEC filing says the independent committee created to investigate the breach found that senior Yahoo executives and relevant legal staff were aware a state-sponsored actor had accessed certain accounts in late 2014.
At the time, Yahoo believed only 26 specifically targeted users were affected and that it notified them and consulted with law enforcement, according to the filing. At the time of the investigation, the committee “did not conclude that there was an intentional suppression of relevant information,” the filing said.
Verizon is now in the process of buying Yahoo’s Internet business at a reduced price due to the two massive data breaches it suffered, the 2014 breach and another in 2013.
Yahoo declined to say when it became aware of the extent of the breaches.
The price cut was $350 million. Under the amended terms, Verizon will pay $4.48 billion and the two companies will share some legal and regulatory liabilities arising from the breaches.
Yahoo’s ownership stakes in Chinese Internet giant Alibaba will be spun off into a company called Altaba. That 15-per-cent stake in Alibaba is worth about $35 billion. Also part of Altaba will be Yahoo’s 35.5-percent stake in Yahoo Japan.
It’s unclear what role Mayer will play in either company in the future. Regulatory filings indicated she would leave Yahoo’s board when the sale was finalized. No announcement about what, if any, role she might have at Verizon has been made.
According to SEC filings, Mayer will also get a golden parachute worth about $55 million if Verizon does not keep her on in some capacity. The severance would be made up primarily of stock and options, with only $3 million coming in actual cash.