Former Yahoo COO lands $58M in severance
Henrique de Castro’s 15 months as Yahoo’s chief operating officer may have ended on a sour note, but it was sweetened by a severance package valued at nearly $58 million (U.S.). All but about $1 million of de Castro’s severance was based in the value of his equity award in Yahoo, which began appreciating after former Google colleague Marissa Mayer joined the company in July 2012. He became Mayer’s first big hire just four months later. But in a letter to employees following de Castro’s Jan. 16 ouster, Mayer said she “made the difficult decision” that he should leave. His exit package outpaced Mayer’s 2013 compensation, valued at $24.9 million. She gained an additional $21.2 million from vested shares, Yahoo said in a preliminary proxy filing Wednesday. De Castro, a top Google sales exec, was hired to revive Yahoo advertising. His high-priced, short-lived tenure has already come under fire. Last month, shareholders filed suit against Yahoo directors and de Castro, alleging that the board wasted corporate assets and breached its fiduciary duty by failing to under- stand how much compensation de Castro was entitled to.
The company says in its preliminary proxy that it will file a motion to dismiss the case.
In defense of de Castro’s hiring and sign-on package, Yahoo said in Wednesday’s filing that 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 as success.”
The sharp 2012-2013 gain in Yahoo share price boosted the value of de Castro’s Yahoo stake from $17 million to $58 million, the company said. Much of Yahoo’s gains have come on the soaring value of its 24-per-cent stake in Alibaba, which is planning an initial public stock offering that could value the Chinese e-commerce giant at $200 billion.
Yahoo earlier said de Castro’s job offer had costs with “significant compensation value” to offset potential compensation he forfeited when he left Google.
His exit package from Yahoo included “negotiated protection” in the event he was terminated by Yahoo. His sign-on packaged included a “make-whole” package then valued at $20 million.