Apparently getting the boot as Yahoo’s chief operating officer isn’t so bad.
Henrique de Castro left Yahoo with a $58 million severance package, according to a U.S. Securities and Exchange Commission filing that was made public this week. CNN Money said de Castro’s golden parachute is one of the biggest ever given to an executive who was fired, and especially notable considering de Castro was only with Yahoo for about 15 months.
De Castro was ousted from Yahoo in January. According to Bloomberg Businessweek:
Yahoo’s dissatisfaction with de Castro can be seen in how it paid him in the year before it let him go. The company breaks down its cash compensation for top executives into two buckets: salary and bonus. De Castro made $600,000 in salary last year, with a bonus target of $540,000. Given the company’s anemic performance, no one got a full amount bonus. The other three top executives got somewhere between 83 percent and 92 percent of their targets in 2013. … De Castro didn’t receive a bonus at all.
If there is such a thing as being fired at the perfect time, de Castro nailed it. Businessweek said that although Yahoo missed targets on revenue, profit and free cash flow during de Castro’s short stint, Yahoo’s stock skyrocketed from $15.68 to $40.34, as a result of the company’s 24 percent stake in Alibaba, the Chinese e-commerce giant.
The result? De Castro’s severance package, which was valued at $17 million in October 2012, more than tripled. He was also fired at the same time Yahoo’s stock hit its highest level in the past decade.
De Castro’s golden parachute was huge partially because Yahoo had to “pay up to recruit him from Google,” The Washington Post said.
A little more than $31 million of the $58 million package was in the form of what the company called “make-whole” restricted stock units. The proxy explains that these were needed to “buy out compensation value that the executives forfeited upon leaving their prior employers.”
It must be nice to be a corporate executive. Even if your performance is deemed lousy, you can still make off with millions of dollars.
What do you think of Castro’s golden parachute? Share your comments below or on our Facebook page.