Marissa Mayer is an American tech executive, entrepreneur, and investor who has a net worth of $600 million. Mayer first became well-known for being Vice President of consumer products at Google. Marissa was the 20th employee hired by Google. She later had a tumultuous tenure as the President and CEO of Yahoo.
Yahoo Earnings
How much money did Marissa Mayer make while running Yahoo? During her five years at Yahoo, 2012 to 2017, Marissa's total compensation including salary, stock and bonuses was $405 million.
Early Life
Marissa Mayer was born in Wausau, Wisconsin May 30th, 1975. She went to Stanford University with the intention of becoming a physician but later switched to a custom psychology, linguistics, and computer science hybrid major. She remained at Stanford to get her master's in computer science and graduated in 1999.
Google's 20th Employee
Shortly after graduating, Mayer took a job as the 20th employee of Google. She was instrumental in the development of the company's early user interface and was a leader of design and programming teams internally. Her personal aesthetics influenced Google's signature simple, bold color scheme and the homepage layout. She presided over the introduction of successful Google services such as Gmail, Google Images, and Google Maps. She had a position of influence in Google's design and product development until leaving to become CEO of Yahoo in 2012.
Yahoo
Marissa Mayer surprised the tech community in 2012 when she announced her decision to leave Google to become the CEO of Yahoo. Yahoo's financial problems were well-known, and hopes were initially high for Mayer to help the struggling company define its place in a changing market.
Unfortunately Marissa's previous success in designing and expanding services at Google did not translate into success as an executive, and many of the goals she had for upgrading Yahoo as a search engine and entertainment platform went unrealized.
Despite the company outperforming anticipated earnings in her first couple years, she was criticized for making a large number of ill-conceived acquisitions as well as implementing ineffective cost-cutting strategies and increasing frivolous corporate expenses. Even as the company was closing office and losing sources of revenue, she threw lavish theme parties and spent excessively on benefits for corporate staff.
After Yahoo continued to experience consistent declines in earnings, usage, and stock price for years, prominent shareholders called for her resignation in 2016. Mayer was the public face of Yahoo's failures and faced major scrutiny for her style of management. Under her command, there were two major data breaches in which millions of users account information was leaked, and while they occurred in 2013 and 2014, it only became known to the public in 2016. A year later, she was asked to testify before Congress regarding her awareness and handling of the cybersecurity breaches, but she repeatedly refused leading them to issue a subpoena compelling her to testify.
She reigned as the highest paid female CEO while at Yahoo earning between $36.6 to $42.1 million in annual compensation.
After years of floundering, Yahoo was bought by Verizon for $4.48 billion in 2017, and Mayer announced she would be resigning following the sale. She received a $23 million severance package and owned $238 million worth of stock at the time of her departure.
Personal Life
Mayer is married to hedge fund manager and investor Zachary Bogue. They have three children together and live in Palo Alto, California. In 2013, the couple purchased an 11,000 square foot $35 million mansion.
She is well-known for her intense work ethic as well as her attention to detail. Her dedication to her career and meticulous nature have been highlighted by both herself and the media. While heading a color scheme change as an engineer at Google, she had her staff crowd test twenty shades of blue to see which the consumer preferred. She also received attention for being six months pregnant when she began her tenure at Yahoo and only taking a few weeks of maternity leave.
Accolades and Controversy
While not free from scrutiny, Mayer's career has been marked by a number of accomplishments for which she has received acclaim. Prior to joining Yahoo, she was incredibly popular among the Silicon Valley tech crowd and received a high degree of positive coverage. She appeared on Fortune Magazine's list America's 50 Most Powerful Women in Business from 2008-2015. Glamour Magazine named her as one of their Women of the Year in 2009, and in 2013 she became the first Fortune 500 CEO to get a spread in Vogue. From 2012-2014, she was featured on Forbes' Annual list of the World's 100 Most Powerful Women.
In 2016, she sought approval from the Palo Alto City Council for a zoning permit to turn the mortuary she owned into a women's career development and family center. Although many supported the spirit of the center, the permit change was denied with residents expressing concerns related to increased traffic congestion. She received additional scrutiny in 2016 after it came to light that her resume had been created by a Bulgarian startup. Her husband along with numerous other San Francisco elites were criticized for donating to support Proposition Q, a resolution that would've banned tents from sidewalks leaving the homeless present but without their shelter.
Post Yahoo Career
After leaving Yahoo, Mayer co-founded a tech start-up called Lumi Labs with her former Google co-worker Enrique Muñoz Torres. The company described itself as one that seeks to apply artificial intelligence to mundane human organizational tasks. The business changed its name to Sunshine in 2020 and launched an AI-enhanced contact updating and managing app, Sunshine Contacts. The product uses AI to manage your contact book and update it with new information from across various platforms, and the company intends on expanding its offerings to other consumer services in the future.
Published Mon, Jul 25 2016 2:45 PM EDTUpdated Mon, Jul 25 2016 8:00 PM EDT
Marissa Mayer has millions of reasons to celebrate her job at Yahoo. The CEO's future may be in question, but she's already earned over $100 million in reported compensation from the search giant over the past four years at the helm. (And that doesn't include the $55 million she's due if she steps down.)
But is "earned" the right word? Verizon's purchase of Yahoo offers a good opportunity to see how Mayer's tenure as CEO compared on a pay-for-performance basis to past Yahoo chiefs.
Generally speaking, Yahoo CEOs have a median reported compensation of $36 million per year, going all the way back to 1997, and that was Mayer's 2015 reported compensation, which ranked her at No. 11 among U.S. CEOs, according to Equilar.
The relationship between reported pay and performance at Yahoo has been tenuous at best, with a (very) small statistical correlation, with an "R-squared" measure of 0.0063 (where zero is no correlation, and one is perfect correlation.)
An examination of CEO pay against trailing three-year return on a year-by-year basis going back to 1999 indicates little correlation between compensation and performance, as shown by data from S&P Global Market Intelligence. It's not adjusted for inflation, and it must make approximations based on the fact that the SEC changed reporting requirements in 2006. It's also reported compensation, which doesn't mean Mayer gets a check for $36 million at the end of the year. It's the earnings goal an executive could get, usually based on stock performance.
In Mayer's case, Yahoo stock has gone up during her tenure. That wasn't necessarily true for past CEOs like Carol Bartz and Jerry Yang, who saw big down years running the company.
A Yahoo spokesperson explained to CNBC that Mayer's actual, realized compensation was only $14 million — much lower than the reported compensation of $36 million. The big difference came because the company fell short of some performance goals, causing Mayer and other executives to lose out on performance-based pay.
There have been a lot of studies trying to compare executive compensation with company performance. The logic is that higher-paid CEOs should be able to steer their companies to more profitable outcomes. Part of that came about 30 years ago, when many U.S. companies switched to offering incentives and stocks options as part of executive pay packages.
But a new study released Monday by MSCI ESG Research suggests that companies with lower-paid CEOs actually outperform their high-paid-executive counterparts. Specifically, the companies in the top 20 percent of highest paid CEOs saw much lower stock returns in a 10-year period than the 20 percent of companies who had the lowest paid CEOs.
The study found that $100 invested in companies that pay their CEOs at the high end would return $265 over that 10 years. That same $100 invested in the bottom fifth of companies when ranked by total pay would have returned $367.
A lot of research has been done into pay-for-performance, including by CNBC. But these studies usually look at a short time frame like a year of performance compared to pay.
The MSCI study includes pay for over 800 individual CEOs at 429 different large- and mid-sized companies companies.
MSCI also considered broader economic sectors and found basically the same result: CEOs who had compensation in the top half of a sector tended to run companies that performed worse than the CEOs who were paid in the lower half.
Many other studies have shown little relationship between CEO pay and one-year stock performance. Other studies have recommended that longer time periods be used to have better analysis, like a three-year or five-year time horizon.
Disclosure: CNBC has a content-sharing partnership with Yahoo's finance site.