Yahoo CEO leaving company with $58 million severance

According to a regulatory document filed Wednesday with the SEC, former chief operating officer, Henrique de Castro, left Yahoo and received a severance package worth $58 million. CNN also reported this morning this package is the most lucrative severance agreement ever offered to an executive and is especially notable because De Castro only worked at Yahoo for fifteen months. Not only is the pay high, it’s been given to someone who, according to reports, was let go by Yahoo CEO Marissa Mayer because his efforts had failed to improve Yahoo’s advertising revenue.

Image representing Henrique De Castro as depic...

Henrique de Castro’s pay includes a base salary of $600,000 in 2013, as well as stock grants and options from Yahoo, which increased the total payout to closer to $11 million. Other pay he would have earned in 2012 from Yahoo, however, was forfeited because he was not fully vested at the time he was asked to leave the company.

So how did Henrique de Castro get so much money from Yahoo?


When the package severance was offered in October of 2012 it was worth approximately $17 million, still not too shabby for less than 2 years worth of work, but by the time he left, the company’s stock prices had risen so high the package if now valued at $58 million.

The increase in the value of Yahoo is attributed to a surge in stock prices up 6% as of the last earnings and sales reports the company posted. Yahoo has also reduced the amount of money they had been losing as a result of their display and banner ads.

Executives’ salaries soar high above average workers


Americans work hard for their money and no one questions whether executives should be paid what they are worth but average citizens are starting to question the pay for some CEOs, which has skyrocketed over the last decade, leaving many lower income workers behind.

For instance, experts note chief executives at American companies saw their pay increase by 15% in 2011, this increase followed a whopping 28% increase in 2010. But what is even more astounding is pay for American CEOs has increased 725% since 1978. This is more than 127 times faster than the pay of the average American worker, which rose a paltry 5.7% over the same period. The rise is also much more than stock market growth.

What does that mean in real terms? In 1978, a CEO for a major company took home 26.5% more than workers. Now the CEO makes 206 times more than the average worker. Of course, much of the compensation is not tied to base pay, but some companies do not seem to cut pay increases or stop bonuses even if the company’s stock price plummets and the average worker is laid off.

Do CEOs make too much money?


The American dream has always been contingent on the idea that if you worked hard, got a good education, and took risks you had a chance to improve your circumstances. What happens in society if income inequality becomes so pervasive you have the very rich and the very poor and no middle class? Eventually the masses become frustrated with their lack of upward mobility, which could ultimately lead to civil unrest.

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Beth L. is a content writer for Better Bankruptcy. Good content and information is one of many methods we utilize to bring you the answers you need.