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It's official: Yahoo's former No. 2 made a lot more than his boss

It's official: Yahoo's former No. 2 made a lot more than his boss

By Vindu Goel, The New York Times | Updated: 17 April 2014 13:00 IST

Henrique de Castro, who was fired in January as Yahoo's chief operating officer, was paid handsomely for his largely unsuccessful efforts to turn around the company's advertising business.

For his 15 months on the job, he received about $96 million in compensation, according to the proxy statement that Yahoo filed Wednesday.

The largest portion of the payout, $58 million, was severance, which was directly linked to the rise in Yahoo's stock price during the time he was employed.

De Castro, a former Google executive, was also awarded $11 million in salary and stock-based compensation in 2013 and $39 million in 2012, according to the proxy, although he lost a large chunk of it because the stock wasn't fully vested when he left.

Based on the proxy disclosures, Marissa Mayer, chief executive of Yahoo, didn't make out nearly so well. For 2012 and 2013, she received $62 million in compensation, according to the document, although she is also sitting on millions of shares and options that will vest over time or would pay off if she were to meet a similar fate as her former No. 2.

Yahoo's board of directors - which, like all boards, is supposed to justify its decisions on executive payouts to the company's shareholders - said that de Castro's diamond-crusted golden parachute would not have been quite so valuable if Yahoo's stock had not been on a tear during his tenure. If the stock had gone nowhere, the severance would have been worth $17 million, the company said. There was no word on how much of that stock price increase the board attributed to de Castro's work, as opposed to the rising value of Yahoo's investment in Alibaba.

The Internet company did signal that it was trying to start a fresh chapter, nominating three new board members: David Filo, a Yahoo founder who still advises it on technical matters; Charles R. Schwab, founder and chairman of the Charles Schwab discount brokerage firm; and H. Lee Scott Jr., former chief executive of Wal-Mart.

Directors receive annual cash retainers of $80,000 and an annual grant of restricted stock units worth about $220,000, with additional payments for leading committees or taking on other special responsibilities.

Filo, who already owns 71 million shares of Yahoo worth about $2.6 billion, is earning only $1 a year and no stock for his services, according to the proxy.

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