Yahoo! Inc. (NASDAQ:YHOO)’s chief executive, Marissa Mayer, will this year not get an annual bonus. Mayer will also not get a stock award. This follows investigations which revealed that senior executives at the internet firm had mishandled security breaches. An independent board carried out the investigation.
In an online posting Mayer accepted responsibility as the firm failed to properly investigate a 2014 security breach.
“I am the CEO of the company and since this incident happened during my tenure, I have agreed to forgo my annual bonus and my annual equity grant this year,” Mayer wrote.
The security breach that occurred in 2014 affected Yahoo user accounts totaling approximately 500 million in what was believed to be a state-sponsored incident. The hackers were able to get personal information though no credit card data was stolen. Yahoo was to later disclose last year in December that there had been another security breach in 2013 which was bigger as accounts numbering close to a billion had been hacked into. To date, it remains the biggest online security breach ever.
The security breaches have not only dented the reputation of Yahoo but have also cost the company money. This is because in its intended sale to Verizon Communications Inc. (NYSE:VZ), it has had to reduce its sale price by about $350 million in order to cater for the liabilities that may arise from lawsuits. The deal with Verizon had been reached two months prior to the revelation about the security breaches.
Already, there are over 40 lawsuits filed with a view to seeking compensation as a result of the security breaches. Once the sale goes through, a successor firm tentatively named Altaba Inc will take responsibility for paying out the legal claims that will be successful.
THE MORNING REPORT
Start your workday the right way with the news that matters most.
The security breaches are also being probed by the U.S. Federal Trade Commission as well as the U.S. Securities and Exchange Commission. Though Mayer’s annual bonus had not yet been determined, the Yahoo CEO stands to lose an equity grant valued at the very least, $12 million.
On Thursday shares of Yahoo! Inc fell by 0.65% to close the day at $45.94.