On Monday July 25, it was announced that global media giant Verizon purchased technology giant Yahoo’s Internet search, media, communications and advertising business to the tune of $4.83 billion dollars. The transition is expected to occur in the first quarter of 2017. Though it is uncertain how this acquisition will affect users and customers of either company, the news has shed a light on severances, most notably that of Yahoo chief executive officer, Marissa Mayer.
Mayer, previously an executive for Yahoo’s rival Google, joined in 2012 to serve as chief executive. Following the announcement of the sale, Mayer sent a memo to employees stating her intention to stay with the company. Mayer does have, however, a $55 million dollar severance compensation package if she leaves the company following the change in ownership.
Severance packages are often included in employment contracts as a way to give a recently terminated employee some financial relief at the time of a job loss. In return, the severance agreement often includes terms stating that the employee will not sue the employer for unlawful termination. While the severance package often includes a lump sum, it may also include an extension of health benefits beyond the time of employment.
It is important to note that severance packages are not required by law, and not every company offers a severance package. If people are involved with employment negotiations, it is important to understand the terms of their employee rights and their employment contract, which may include a severance package, something that may greatly benefit them in the future if the situation changes.
Source: Variety, “Yahoo CEO Marissa Mayer Post-Verizon Deal,’I’m Planning to Stay’,” Todd Spangler, July 25, 2016