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Selling Yahoo could earn Marissa Mayer $43 million

Yahoo (YHOO) Chief Executive Marissa Mayer is learning the hard way that timing is everything, especially when it comes to the possible sale of the company.

The value of the payout that Mayer could earn in the event of a change in ownership has fallen by more than two-thirds this year to $43 million from $159 million in part because of the decline in Yahoo's share price and in part because she has already exercised various awards, according to compensation consultant Brian Foley. Not that $43 million is anything to cry about.

Mayer, whose 2012 appointment as Yahoo CEO stoked investors' optimism that better times were coming, has realized about $125 million in compensation from cash and equity awards since joining the company, according to Foley. In 2015, when Yahoo's stock fell more 33 percent, she banked almost $47 million. Yahoo declined to comment for this story.

"It's a very significant amount of money," said Foley, who has been in business since 1976. "At the end of the day, the company doesn't seem to be any better off. She seems to be better off by roughly $125 million, and then she gets the severance on top of that."

Mayer's performance has come into focus during months of pressure from activist investors who have called for her ouster. Yahoo announced today that it was considering strategic alternatives, including a sale of the company. It has retained Goldman Sachs (GS), JPMorgan (JPM) and PJT Partners to assist the board.

"We will continue to advocate for change and support moves by the company that will result in a higher stock price and create value for all shareholders," said Owl Asset Management, one of the activists that have been critical of Yahoo. Owl Asset declined to comment beyond the statement.

Under Mayer's leadership, revenue at the Sunnyvale, California-based company barely budged, standing at about $5 billion at the end of 2012 and 2015. Although Yahoo's stock price has nearly doubled under her watch, analysts have noted that's mostly because of investors' enthusiasm for Yahoo's investment in Alibaba (BAB), which predates Mayer's tenure. Yahoo's core Internet advertising business has stagnated for years.

"It's fair to say the company has performed in a largely disappointing fashion over the last three to four years," said Scott Kessler, an analyst with S&P Global Market Intelligence, who rates Yahoo as a "buy." "You can look at any operating or financial metric. I think it would be hard to identify significant areas of success."

The company has begun retrenching. Earlier this month, it announced that it was eliminating 15 percent of its workforce, and just this week it named some of its digital properties it's axing as part of that cutback, including Yahoo Health, Yahoo Travel and Yahoo Autos. More are expected to go.

Yahoo last year canceled plans to spin off its stake in Alibaba after the IRS decided the transaction wouldn't be tax-free. In addition to selling itself, Yahoo also is considering spinning off its Internet business, though that seems less likely given the reported interest in buying Yahoo among the likes of Barry Diller's IAC/InterActiveCorp (IACI), Verizon (VZ), News Corp (NWS.A) and private equity firm TPG.

Shares of Yahoo rose 2 percent, or 62 cents, to $30.04 in Friday trading.

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