7 Steps To $62 Million: How Yahoo's COO Got A Massive Pay Package

Henrique De Castro Yahoo

By Nicholas Carlson

Last week, new Yahoo CEO made her first huge hire.

She poached ad executive Henrique De Castro from Google to be Yahoo's COO.

It wasn't easy convincing De Castro to join up.

Mayer and Yahoo's board agreed to pay De Castro $62 million over the next four years.

  • $600,000 in annual salary
  • $540,000 a year in target bonus
  • $36 million in stock awards over three years
  • $1 million in cash within seven days
  • $20 million in stock over four years

Those figures have a lot of people in the industry stunned.

One former Googler in his own high-profile job emailed us to say: "The weird thing is the amount of money he is making. That is criminal."

But the story of how De Castro's compensation got so high is actually pretty simple.

According to two sources familiar with the situation it happened in 7 steps:
  1. Yahoo offered De Castro a very large package, but one that was smaller than $62 million.
  2. De Castro told his Google bosses about the offer.
  3. Google matched the offer and created a new job for him with big new responsibilities.
  4. De Castro told Yahoo that Google matched their offer and that if they couldn't do better, he was going to stay.
  5. Yahoo dropped the $62 million hammer.
  6. De Castro told Google about the $62 million deal.
  7. Google told De Castro: Good luck at Yahoo! (We're told $62 million is more money than Nikesh Arora, Google's own revenue boss, makes.)

So, is De Castro worth $62 million? Several of his former Google colleagues say no...

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