March 26, 2023

DealBook: Yahoo Is Said to Plan Board Shake-Up

Marissa Mayer, chief of Yahoo.Stephen Lam/ReutersMarissa Mayer, chief of Yahoo.Daniel S. Loeb, the hedge fund manager of Third Point.Steve Marcus/ReutersDaniel S. Loeb, manager of the hedge fund Third Point.

Yahoo is poised to announce changes to its board, including the addition of Max Levchin, a former senior executive at PayPal, people briefed on the matter say.

The board is also expected to announce the departure of two directors: Brad Smith, the chief executive of Intuit, and David W. Kenny, chief executive of the Weather Channel.

The shake-up is expected to be announced within days, these people said. Yahoo did not respond to requests for comment.

Yahoo’s latest board changes signal its continued push to become a top technology company once more, a strategy it began in July, when it hired Marissa Mayer away from Google to become its new chief executive.

Since taking over, Ms. Mayer has emphasized ways to modernize Yahoo staples like e-mail and the Flickr photo service, to help them contend with ever-newer competitors.

Bringing in Mr. Levchin is intended to help with that push and show a commitment to developing enticing new offerings. He served as PayPal’s chief technology officer before forming Slide, a company that eventually helped produce Web applications for Facebook. Google bought Slide for about $180 million two years ago, and Mr. Levchin left the Internet giant when it shuttered Slide last year.

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He will serve as the fourth director nominated by Daniel S. Loeb, the activist hedge fund manager who joined Yahoo’s board in May after mounting a prominent challenge to the company’s directors. Mr. Loeb’s other directors, besides himself, are Michael J. Wolf, a media consultant, and Harry Wilson, a turnaround expert who served on the Obama administration’s automotive task force.

Since joining Yahoo’s board, Mr. Loeb has helped orchestrate a number of changes, including hiring Ms. Mayer.

Mr. Loeb was introduced to Mr. Levchin by Mr. Wolf, who had served on Slide’s board of advisers. They met in Silicon Valley ahead of the proxy fight, when Mr. Loeb was recruiting candidates for Yahoo board seats.

One of the departing directors, Mr. Smith, was a main supervisor of Yahoo’s turnaround efforts, including its talks with private equity firms about a capital infusion into the Web company.

The other, Mr. Kenny, became the Weather Channel’s chief executive in January and was formerly the president of Akamai Technologies. Mr. Kenny had briefly considered campaigning for Yahoo’s top spot last year.

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Bits Blog: Yahoo’s Mayer Gets Hefty Pay Package

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10:10 p.m. | Updated More details added.

SAN FRANCISCO — Yahoo lured Marissa Mayer from Google with a lavish pay package that could total $129 million over five years — if she is able to get the company growing.

Yahoo disclosed details of its new chief executive’s compensation package in a regulatory filing on Thursday. It is larger than the pay package of the average chief executive in Silicon Valley, but not the largest among chiefs of publicly held technology companies.

Timothy D. Cook, Apple’s chief executive, has a compensation package valued at $378 million in salary, bonus and stock award that vests over 10 years. His annual base salary is $900,000.

Ms. Mayer’s pay package is higher than that of Meg Whitman, her counterpart at Hewlett-Packard. When H.P. hired Ms. Whitman, 55, as its chief executive, it offered her a $1 salary and stock options valued at $16.1 million that she cannot exercise unless H.P.’s stock meets certain targets by October 2013. She will also get a $6 million annual bonus if all goes well.

Ms. Mayer’s former boss at Google, Larry Page, receives only $1 in annual salary. But as a co-founder of the company, he owns more than 26.2 million shares of Google stock, which, at Thursday’s closing price of $593.06 a share, is worth about $15.5 billion.

Ms. Mayer’s package includes a $1 million annual base salary and a bonus of up to $4 million a year, depending on company performance. She will receive $12 million in the form of a stock payment this year — half in restricted stock, the remainder in options — and comparable awards in subsequent years. Yahoo will also give her a one-time “retention equity award” worth $30 million that vests over five years.

Google never had to disclose Ms. Mayer’s salary because she was not one of the highest-compensated executives at the company, although she was one of the most visible. But to make up for what she left on the table at Google, Yahoo said it would pay her a one-time “make whole” stock grant of $14 million.

“It’s big,” said Colin Gillis, an analyst at BGC Partners. “But Yahoo is a multibillion-dollar company. If she can create value, it’s a small percentage. If she doesn’t, she’ll join a long succession of Yahoo C.E.O.’s with sizable pay packages who did not add value.”

Yahoo offered Ms. Mayer more than it had her immediate predecessors, Scott Thompson and Carol Bartz. It offered Mr. Thompson a $1 million base salary and stock grants worth about $22.5 million. He left four months into the job, without severance, amid accusations that he had exaggerated his credentials on his resume, but he managed to keep $7 million in cash and stock grants that had already vested.

When Ms. Bartz joined Yahoo in 2009, the company offered her a $1 million salary and stock and cash grants worth $19 million, plus options worth five million shares that exercised at $11.73.

Ms. Mayer, known for holding extravagant parties, collecting expensive art and wearing designer gowns, does not lack for money. As Google’s 20th employee, she made millions in Google stock while running its search business and overseeing successful products like Gmail and Google Maps.

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