×

Yahoo CEO Marissa Mayer Loses Bonus, Top Lawyer Resigns in Wake of Massive Security Breaches

Yahoo’s board said it would not pay an annual bonus to CEO Marissa Mayer for 2016 — citing the theft of info on hundreds of millions of user accounts that happened on her watch — while general counsel Ron Bell has resigned.

The disclosure last year by Yahoo of two massive user-data breaches that occurred in 2013 and 2014 led Verizon to lop $350 million from the purchase price for Yahoo’s internet businesses, lowering the value of the deal to about $4.48 billion in cash. The deal is expected to close in the second quarter of 2017.

In a 10-K filing Wednesday with the SEC, Yahoo said that in addition to not paying Mayer a cash bonus for 2016 that was otherwise expected to be paid to her, she offered to forgo any 2017 annual equity award.

Bell resigned effective March 1, and “no payments are being made to Mr. Bell in connection with his resignation,” Yahoo said. The board’s independent committee investigating the hacks said it found that “the relevant legal team had sufficient information to warrant substantial further inquiry in 2014 [with the initial discovery of 26 compromised user accounts], and they did not sufficiently pursue it.”

Mayer, in a post Wednesday on Yahoo’s Tumblr, attempted to convey her responsibility for the hacks.

“When I learned in September 2016 that a large number of our user database files had been stolen, I worked with the team to disclose the incident to users, regulators, and government agencies,” Mayer wrote. “However, I am the CEO of the company and since this incident happened during my tenure, I have agreed to forgo my annual bonus and my annual equity grant this year and have expressed my desire that my bonus be redistributed to our company’s hardworking employees, who contributed so much to Yahoo’s success in 2016.”

Yahoo’s unprecedented data thefts had threatened to derail the Verizon deal. In September, Yahoo announced that information on at least 500 million email accounts was stolen by “state-sponsored” hackers in 2014. Then in December Yahoo said data from more than 1 billion user accounts was stolen by an unknown party in 2013.

Mayer’s annual base salary is $1 million. Yahoo hasn’t disclosed what her bonus last year would have been or the value of the 2017 stock grants she’s giving up, but for 2015 about 89% of her realized compensation was equity. As of Aug. 25, 2016, Mayer held Yahoo stock options and restricted stock units valued at $86.4 million, according to a company SEC filing.

In 2015, Mayer received a total compensation package worth $13.9 million, which included $12.4 million in stock grants and options, security services for which the company paid $544,061 and a bonus of $1,125 for being among the inventors named in a pending patent application. (Her actual pay package was less than the $36 million reported for accounting purposes because of a decline in the value of Yahoo’s stock.)

Once the Verizon deal closes, Yahoo will rename itself “Altaba Inc.,” and Mayer will resign from Altaba’s board along with six other current Yahoo board members. The new Altaba will primarily be an investment-holding company whose major asset will be shares of China’s Alibaba Group.

Mayer will join Verizon for at least an interim transition period after the transaction is final. Analysts expect AOL CEO Tim Armstrong to assume oversight of the combined AOL-Yahoo group.

Under the revised terms of Verizon’s acquisition of Yahoo’s operating businesses, Altaba will be responsible for 50% of any cash liabilities incurred following the closing related to non-SEC government investigations and third-party litigation related to the breaches. Liabilities arising from shareholder lawsuits and SEC investigations will continue to be the full responsibility of Altaba.

Yahoo, in the 10-K filing Wednesday, said it recorded expenses of $16 million related to the security incidents for 2016, comprising $11 million in legal costs and $5 million associated with “ongoing forensic investigation and remediation activities.” Yahoo said it expects “to continue to incur investigation, remediation, legal and other expenses associated with the Security Incidents in the foreseeable future,” adding that it does not have cybersecurity liability insurance.

Popular on Variety

More Digital

  • Elite Season 2

    San Sebastian: Spain’s SVOD Players Debate Competition, Brand, Talent

    SAN SEBASTIAN  — Executives from HBO, Netflix, Amazon and Movistar+ and “Elite” co-creator Darío Madrona took to the stage to field questions on the Global Impact of Spanish Series. Here, briefly, are five takeaways: 1.Spain First “La Casa de Papel” was watched by 34,355,956 Netflix accounts over its first seven days,  after a July 19 [...]

  • Tinder - Swipe Night

    Tinder's Apocalyptic 'Swipe Night' Interactive Dating Show Sets Release Date

    Tinder next month will bow its first original entertainment content — “Swipe Night,” an interactive adventure series in which viewers are forced to make dating choices on humanity’s last night on Earth. Variety previously reported details of the location-based social network/dating app service’s foray into original content, which recently wrapped production in Mexico City and [...]

  • Editorial Use onlyMandatory Credit: Photo by

    YouTube Rolls Back Verification Changes, Says Verified Creators Can Keep Their Badge

    A day after announcing significant changes to its verification program, YouTube announced Friday afternoon that it won’t be de-verifying existing creators after all. “We heard loud and clear how much the badge means to you,” said YouTube product manager Jonathan McPhie in a blog post. “Channels that already have the verification badge will now keep it [...]

  • BLive: BitTorrent Live Streaming App to

    BitTorrent to Launch Public Beta of New Live Streaming App

    BitTorrent is getting ready to open the floodgates for its new live streaming app, dubbed BitTorrent Live: The company plans to launch a BitTorrent Live Android app on various app stores as part of a public beta test late Friday, according to a spokesperson. BitTorrent Live, which is also known as BLive, is being described [...]

  • Netflix - Apple TV

    Netflix Stock Drops After CEO Acknowledges 'Tough Competition' Coming From Disney, Apple

    Netflix shares fell as much as 7% Friday to a nine-month low, coming after CEO Reed Hastings commented that the November launches of Disney Plus and Apple TV Plus will introduce a “whole new world” of competition. Hastings, speaking at the Royal Television Society conference Friday in Cambridge, England, said, “While we’ve been competing with [...]

  • Facebook

    Facebook Suspends Tens of Thousands of Apps During Privacy Investigation

    Facebook has suspended tens of thousands of apps ever since it began investigating potential privacy abuses, the company said Friday. The apps in question had been built by around 400 developers, and a suspension doesn’t necessarily indicate actual privacy violations. Facebook began combing through millions of apps that made use of its platform after the [...]

  • tivo logo

    Tivo Plans to Launch Android TV Dongle, Tivo+ Curation App

    DVR maker Tivo is getting ready to release a new device that may not record television at all: The company plans to launch a $50 Roku-like TV dongle early next year, its new CEO Dave Shull revealed in a conversation with CNN this week. The new device will be powered by Google’s Android TV platform, [...]

More From Our Brands

Access exclusive content