Marissa Mayer

Marissa Mayer continues to make headlines since Yahoo! Inc. (NASDAQ:YHOO) announced her appointment as the company’s new chief executive officer. Many were surprised, considering the fact that she is doing a great job as vice president of Local, Maps and Location Services at Google Inc  (NASDAQ:GOOG). One of the questions asked by technology analysts and observers is related to her compensation at Yahoo. How much is her salary as chief executive officer?

The answer to that is $1 million! Based on the Form-8 K  submitted by Yahoo! Inc. (NASDAQ:YHOO) with the Securities and Exchange Commission (SEC), Marissa Mayer will receive an annual base salary of $1 million subject to annual review. She is also entitled to receive a bonus under Yahoo’s Executive Incentive Plan with a target amount of 200% of her base salary. Her bonus will be determined by the company’s Compensation and Leadership Development Committee of the Board, and its 2012 bonus will be prorated based her employment period.

Mayer will also receive the 2012 Annual Equity Awards, to be vested over three years wherein $6 million of the equity award will be granted to her as restricted stock units and $6 million stock option vested over 2 ½ years based on the satisfaction of her performance. The number of stock options that will be awarded to her will be determined based on the stock value of the company on July 26, 2012. The restricted stock units will be granted to her on July 26 while the stock options will be granted on November this year.

Yahoo also granted Mayer a One-Time Retention Award to be vested over a period of five years. $15 million of the equity award will be given to her as restricted stock units on July 26, 2012 and $15 million in the form of perform-based stock options to be granted by November 2012.

The third benefit is the Make-Whole Restricted Stock Units worth $14 million restricted stock units as partial compensation for the forfeiture of her salary at Google. This will be granted in July 26, 2012 until 2014. The schedule is as follows: $4 million in 2012, $7 million in 2013, and $3 million in 2014.

If her employment will be terminated by the company without any reason or if she resigns because of good reason, she will be paid a severance fee similar to the benefits provided to the other senior executives of yahoo.

She will also enjoy other benefits available to Yahoo’s senior executives including 20 days paid vacation per year, reimbursement for reasonable legal fees incurred related to entering the agreement and a maximum of $25,000 up to $50,000 security expenses.

She is indeed well compensated based on her qualifications and the tough job ahead of her.  As the new CEO of Yahoo, she is expected to develop and implement strategies to improve Yahoo!’s search relevance, introduce innovation, enhance the brand and image of the company, build up its media and web content, and to boost the morale of the company.