Opinion

Felix Salmon

Counterparties: Marissa Mayer’s vacillating pay

By Ben Walsh
July 20, 2012

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Read the headlines and you’d think Marissa Mayer has received the fastest series of pay raises in corporate history.

Yesterday, Yahoo’s new CEO was earning “over $40 million“. A few hours later, her compensation was worth “more than $59 million“. Or maybe just “as high as $59 million“. Then, overnight, she had secured “more than $70 million”. This morning, her value continued to climb, and she was set to “receive up to $100 million“. A few hours later, the number was a positively rococo “$129 million“.

Adding to the confusion, while some headlines were running the $40 million or $60 million figures yesterday, others had already broken the $100 million mark (the LAT and Business Insider). Even more confusing, as the successive waves of Mayer’s pay arrived, the filing and offer letter they were based on remained unchanged.

Using those documents, here’s how Mayer’s five-year pay package was reported within the massive range of $40 million to $129 million:

  • $1 million annual base salary (running total: $5 million)
  • Target annual bonus of $2 million for five years (running total: $15 million)
  • Potential annual bonus of an extra $2 million (running total: $25 million)
  • $14 million in restricted stock to compensate Mayer for lost Google stock (running total: $39 million)
  • $30 million in restricted stock as a “retention award” (running total: $69 million)
  • $6 million or more in restricted stock annually (running total: $99 million or more)
  • $6 million or more in stock options annually (running total: $129 million or more)

That’s $5 million to $25 million in cash, $74 million or more in restricted stock, and an additional $30 million or more in options. The information was publicly available from get go. So why did reporters play by business journalism’s version of “Price is Right” rules and incrementally ratchet up to the correct figure? – Ben Walsh

On to today’s links:

Corporate Welfare
Medicare bought billions in lethal drugs at elevated prices – WaPo

Disturbing
The human tissue industry: inadequate safeguards, limited patient disclosure and strong profit margins – International Consortium for Investigative Journalists

Liebor
Banks would prefer to just settle this whole Libor thing amongst themselves – Reuters
Elizabeth Warren: “We cannot trust Wall Street to regulate itself – not in New York, London or anywhere else” – WaPo
Citi may have to pay more than Barclays’ $450 million to settle Libor claims – Fortune
Bank of England: “At no point did the [Fed] draw the attention of the Bank to evidence of wrongdoing” in Libor setting – Bank of England
Deutsche Bank and WestLB roped into Libor investigations – WSJ

Best Footnote Ever
430 words and almost 20 different entities – the footnote explaining how Bain owned Domino’s Pizza – Footnoted

It’s Academic
Old but awesome: “Japan’s Phillips curve looks like Japan” – QED

Analysts
Morgan Stanley needs to look for a “rich uncle” – WSJ

Old Normal
A top executive “surrenders around 40 percent of his salary to the Bureau of Internal Revenue” – Fortune

Politicking
President Obama’s Wall St BFF out at UBS – DealBook

Contrarian
Actually, we’re all rich kids on Instagram – Atlantic Wire

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