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Yahoo to Pay Mayer $100 Million Over Five Years

Yahoo Inc. YHOO +1.21% showed just how big it is betting that new Chief Executive Marissa Mayer can change its fortunes.

Ms. Mayer will receive up to $100 million in compensation, stock, bonus and retention awards over the next five years, according to a Thursday regulatory filing by the Sunnyvale, Calif., Internet company.

Ms. Mayer is expected to receive around $5.4 million from Yahoo for the remainder of this year and around $20 million a year after that, though some of that amount is tied to performance targets set by the board.

While it is hard to make a direct comparison, Ms. Mayer’s predecessors, Scott Thompson and Carol Bartz, received compensation packages worth $27 million and $44.6 million, respectively, over several years. Both CEOs departed prematurely. Mr. Thompson resigned in May after a five-month stint, while Ms. Bartz was fired last fall after more than 2½ years at Yahoo.

Ms. Mayer, 37 years old, joined Yahoo as CEO on Tuesday after a 13-year career at rival Google Inc., GOOG +2.99% where most recently she was a vice president of local, maps and location services.

The Yahoo pay package includes restricted stock units valued at $14 million in order to “partially compensate” Ms. Mayer for forfeiting her compensation from Google. It also includes a one-time retention award that is valued at $15 million and will vest over five years.

Ms. Mayer wasn’t one of Google’s top officers and so her compensation wasn’t publicly disclosed, but she was employee No. 20 at the Internet search firm and received a windfall in the company’s 2004 initial public offering.

Mark Reilly, a partner at 3C Compensation Consulting Consortium LLC in Chicago, said that Ms. Mayer’s compensation package seemed “reasonable and competitive” given that Yahoo is “a huge company, a turnaround situation, and they got someone who was doing a fantastic job” at Google. Such a package is “needed to attract that type of talent,” he said.

Ms. Mayer faces the challenge of turning around onetime Internet pioneer Yahoo, which has more than 700 million monthly unique visitors to its news, sports, entertainment and email sites but has failed to develop innovative Web services and is far behind its competitors in offering sophisticated tools for advertisers to buy ads on its sites.

Yahoo on Tuesday reported second-quarter profit dropped 4% from a year earlier to $227 million, while revenue slipped 1% to $1.22 billion.




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