Yahoo!'s Mayer to get $23-million golden parachute

The company outlines a leadership plan after its proposed deal with Verizon

Yahoo Inc detailed a golden parachute of $23 million for Chief Executive Marissa Mayer as part of her planned departure from what’s left of the company after it sells its core assets to Verizon Communications Inc.

In securities filings Monday, Yahoo also outlined the leadership of that remaining business, placing board director Thomas McInerney at the helm of what will effectively be a holding company for Yahoo’s sizable stakes in Alibaba Group Holding Ltd. and Yahoo Japan. Ms. Mayer will continue as Yahoo’s CEO until the deal’s closing, at which point she will be replaced by Mr. McInerney and step down from the company’s board of directors.

Ms. Mayer’s future with the core operations that will become part of Verizon, which include its digital advertising technology and portfolio of websites like Yahoo News, hasn’t been announced. She has said she is “planning to stay.” Yahoo previously had said she wouldn’t remain at the holding company, which after the deal closes will change its name to Altaba Inc., derived from a combination of the words “alternate” and “Alibaba.”

Ms. Mayer’s payout includes nearly $3.02 million in cash and about $20 million from restricted stock units she was previously awarded. The $23 million total doesn’t include nearly 2.9 million stock options valued at $56.8 million that the filing said Ms. Mayer held as of March 8. A spokeswoman said those options all have vested.

The sale to Verizon marked a stunning fall for Ms. Mayer, whose efforts to turn around Yahoo since she took over the once-powerful internet giant in 2012 have been closely watched. She failed to deliver pledged cost savings and stem declines in advertising revenue, and Yahoo’s influence in the internet industry continued to wane.

Ms. Mayer’s tenure suffered another blow after the Verizon deal was announced in July, with the disclosures that Yahoo had suffered two massive security breaches, one in 2014 that hit more than 500 million accounts and another from 2013 that affected more than 1 billion accounts. Yahoo said this month that Ms. Mayer wouldn’t receive her 2016 cash bonus or 2017 equity awards after a board investigation found that she and other senior executives failed to “properly comprehend or investigate” the 2014 breach. 

Verizon said last month that it would proceed with the Yahoo acquisition, but the two companies agreed to knock $350 million off the deal price, which had been $4.83 billion. In Monday’s filings, 

Yahoo said that Verizon early in talks over the impact of the breaches had suggested cutting the price by as much as $925 million. The companies expect the deal to close in the second quarter of this year.

Mr. McInerney, the former chief financial officer of IAC/InterActive Corp., joined Yahoo’s board in 2012, the same year Ms. Mayer was named the company’s CEO after she came over from Google. Mr. McInerney, 52 years old, was part of the independent committee of Yahoo directors running its auction process last year. Mr. McInerney would earn a base salary of $2 million a year, plus incentive pay based on job-performance goals, according to a separate regulatory filing on Monday.

Analysts say most of Yahoo’s value stems from its stakes in Alibaba and Yahoo Japan, not the core business being sold to Verizon. Because the business to be known as Altaba will consist primarily of equity investments, short-term debt investments and cash, it will register as an investment company. However, Yahoo shareholders’ stock in the company won’t be affected by the move.

Alexi Wellman, who is vice president, global controller of Yahoo, will be Altaba’s finance and accounting chief, according to a filing. She joined Yahoo in 2013 as vice president, finance. Arthur Chong, who was a legal adviser for Yahoo from October through last Thursday, will serve as general counsel and secretary, and DeAnn Fairfield Work, another outside legal adviser to the company, will be chief compliance officer. Mr. Chong’s new role was effective last Friday while the others will take their new roles post-sale.

Yahoo previously said that Eric Brandt, who joined Yahoo’s board last March and is the former chief financial officer of Broadcom Corp., will become chairman of Altaba.