Departing Yahoo Exec Nets $109 Million Golden Parachute, Report Says

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Image: Don Emmert/AFP/Getty Images

By Adario Strange2014-01-18 21:00:20 UTC

Yahoo chief executive officer Marissa Mayer has been under a microscope ever since she took over the company in 2012. But now, with the pricey firing of chief operating officer Henrique de Castro, the former Googler is under even more scrutiny.

De Castro will walk away from Yahoo with up to $109 million, according to reports citing research from Equilar, an executive compensation and corporate-governance data firm.

See also: 7 Things You Didn't Know About Marissa Mayer

To put that astounding severance-package figure in perspective, consider that Yahoo acquired an entire company just last week for $80 million, according to some sources.

Let's stay on that $80-million range for a moment. Last November, Google invested $80 million to build six solar-energy plants, and earlier this week, the tech giant invested $75 million in Texas wind farms with the ability to power up to 56,000 homes.

Looking at de Castro's severance package through another lens, Tiger Woods — the highest paid athlete in the world — is estimated to have pulled in $78.1 million last year.

However, de Castro’s exit package isn’t as rarified as it may seem.

Former UnitedHealth Group CEO William McGuire snagged $285 million when he left the company in 2006, and former Exxon Mobil CEO Lee Raymond received a whopping $320 million upon his departure in 2005.

In the tech sector, de Castro’s severance can be compared to the exit packages of IBM’s former CEO Lou Gerstner ($189 million) and former eBay CEO Meg Whitman ($120 million).

But what makes de Castro’s severance package particularly remarkable is the fact that, unlike most of the aforementioned executives, he wasn’t the company’s CEO. For comparison, consider that fired Yahoo CEO Carol Bartz received only an estimated $10 million upon leaving the company in 2011.

Walking away with $109 million in severance after just 14 months of work is certainly a boon for de Castro; however, it has also left some industry observers questioning Mayer's longterm strategy for Yahoo.

Commenting on de Castro's exit, former Apple executive Jean-Louis Gassée posted the following to his Twitter account:

Here, Gassée is referencing an old leadership parable that says that preparing the “third envelope” is the current leader’s first order of business before leaving or being deposed.

And while it’s unlikely that Mayer’s expensive hiring misfire will lead directly to her own eventual undoing, it will certainly be remembered as one of her first major missteps if Yahoo suffers additional Mayer-related losses in 2014.

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Topics: Business, Henrique de Castro, Jobs, marissa mayer, Yahoo