In all the speculation about why Marissa Mayer left Google to take the job at Yahoo, no one has suggested she's doing it for the money. After all, the former Googler -- who was employee No. 20 -- is worth an estimated $300 million.
Even so, Yahoo is paying up, with a package that could add up to tens of millions of dollars if she turns around the struggling Internet pioneer and the stock heads north, according to Yahoo's SEC filling.
Yahoo revealed that it will pay Mayer an annual salary of $1 million. She will also be eligible for an annual bonus with a "target amount of 200 percent of base salary" -- which is $2 million -- that will be tied to Mayer's performance and the financial performance of the company.
She will receive an equity award for 2012 of $12 million in stock and options that vest over three years. Her restricted stock will be granted on July 26, so she should hope that's a bad day in the market so her stock will be priced low. Along with other senior execs, she'll be eligible for annual stock grants every year.
Mayer, 37, also negotiated a deal to make up for what she's leaving on the table at Google -- a "make-whole" stock payment valued at $14 million. That is also in the form of restricted stock that will vest over the next 2.5 years.
Here's the really sweet part: Mayer is receiving a one-time retention award of $30 million in stock and options that will vest over five years.
What's it all add up to? A whole lot, and it's not entirely straightforward, as you can see by all the estimates. And, of course, how much the package will ultimately add up to -- $50 million? $100 million? -- will depend almost entirely on Yahoo's stock performance.
Yahoo just appointed Mayer on Monday, after passing over interim CEO Ross Levinsohn. The company had been searching for someone to fill the top job since Scott Thompson was forced out in May for padding his resume.
It's been quite a week for Mayer, who also announced that she's pregnant. Mayer, who said she will work through her matenity leave, will be entitled 20 days of vacation per year, according to the filing.
Here are some key details from the today's SEC filing:
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.
Make-Whole Restricted Stock Units (Vesting Over 29 Months). To partially compensate Ms. Mayer for forfeiture of compensation from her previous employer, she will receive a grant of restricted stock units with a grant-date value of $14,000,000 (the "Make-Whole RSUs"). The Make-Whole RSUs will be granted on July 26, 2012 and are scheduled to vest through 2014. The Make-Whole RSUs are scheduled to vest on the following schedule, based on grant date values: $4 million in 2012, $7 million in 2013, and $3 million in 2014.
Severance Terms. If the Company terminates Ms. Mayer's employment without cause or if Ms. Mayer terminates her employment for good reason, the Company will offer her severance benefits similar to the benefits it provides to other senior executives of the Company at the time of her termination. In addition, if Ms. Mayer's employment is terminated by the Company without cause, by Ms. Mayer for good reason, or due to Ms. Mayer's death or disability (a "Termination Event"), the then outstanding and unvested Make-Whole RSUs will fully vest upon such termination. In addition, upon such termination, any portion of the restricted stock units and stock options subject to her 2012 annual awards and her retention awards described above that is scheduled to vest within six months after a Termination Event will fully vest, subject, in the case of stock options, to meeting the applicable performance criteria.