Yahoo’s Marissa Mayer could get $55 million in severance pay

Yahoo is set to get a new suitor but not before its chief Marissa Mayer walks away with a cool $55-million severance package. The severance package will be paid only if company’s auction of its Internet operations culminates in a sale that ousts her from her job.

According to documents filed by Yahoo in SEC, Mayer would get $55 million in cash, stock awards and other benefits. Mayer would get should this money in case she be forced out as chief executive within a year after a sale.

Yahoo Inc has shortlisted close to 10 bidders in the auction for its core Internet assets, including Verizon Communications Inc, with most offers involving cash rather than a combination with another company, according to people familiar with the matter.

The shortlist comprises mainly large companies and big private equity firms including TPG Capital LP, and excludes many small companies that proposed some kind of combination, such as privately held Yellow Pages owner YP LLC, the people said this week.

Although Yahoo’s board is still evaluating takeover offers, most investors are betting that the company will decide to sell its well-known brand and an Internet business that includes a popular email service and sections focused on sports and finance.

Mayer, a former Google Inc. executive, tried to turn around Yahoo for nearly four years but met with little success. Shareholders never took kindly to her approach and are now opposing the severance payout.

“I don’t think this management team has done anything to merit a huge payout,” said Eric Jackson, managing director of SpringOwl Asset Management, a Yahoo shareholder critical of Mayer’s leadership.

Yahoo declined to comment beyond its filing with the Securities and Exchange Commission.

The rationale behind paying Mayer with whopping $50 million when the company is in doldrums has not been taken kindly by stock markets either.

Mayer received a compensation package valued at nearly $36 million last year under the SEC’s accounting rules. Yahoo’s board maintained in its filing that it was worth only about $14 million as of April 1.

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