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Equilar Provides Clarity on Yahoo! Retention Payment for Tumblr CEO
REDWOOD CITY, CA (August 14, 2013) –Equilar, the leader in executive compensation and corporate governance data, today provided
additional insight into the retention payment made by Yahoo! to the founder of Tumblr, following the June acquisition of the micro-blogging
platform and social networking website.
On August 8, 2013, Yahoo! announced that Tumblr, the popular micro-blogging site, will remain an independent business unit with founder
David Karp remaining at the helm as CEO. In addition to the reported $250 million Mr. Karp earned from the acquisition, a number of news
sources have reported that he will receive a retention package to stay with the company. The total value of the retention package varies
by news source, with most news outlets reporting $81 million while other sources report the value at $110 million.
Based on the disclosure in Yahoo!’s 10-Q filed on August 8, Mr. Karp will receive a stock award worth $41 million and a cash award worth
$40 million, both paid out over four years. The discrepancy in reported values is due to an unassociated $29 million of assumed unvested
Tumblr stock options and restricted stock units held by Tumblr stockholders and vested optionholders of which Mr. Karp will receive an
undefined amount.
According to the most recent Yahoo! 10-Q, “Tumblr stockholders and vested optionholders were paid in cash, outstanding Tumblr unvested
options and restricted stock units were assumed and converted into equivalent awards covering Yahoo! common stock and a portion of the
Tumblr shares held by its founder were exchanged for Yahoo! common stock.”
Headquartered in Redwood City, Calif., Equilar is the leading provider of executive compensation data and governance tools for
corporations, nonprofits, consulting firms, institutional investors, and the media. As the trusted data and executive solutions
provider to 70% of the Fortune 500, Equilar helps companies accurately benchmark and track executive and board compensation, pay
for performance results, and compensation practices. In addition, Equilar offers a leading business and event networking solution
focused on serving executives and board members. Equilar’s research is cited regularly by Bloomberg, The New York Times, The Wall
Street Journal, and other leading media outlets.