Yahoo CEO Marissa Mayer Fires Company’s COO, Who Will Still Receive Millions

1/16/14 1:26PM EST

Yahoo CEO Marissa Mayer Fires Companys COO Will Still Receive Millions  Yahoo CEO Marissa Mayer Fires Companys COO, Who Will Still Receive Millions

screen shot via YouTube/IAB

Yahoo announced yesterday that its Chief Operating Officer Henrique de Castro would be leaving the company after a tumultuous 15-month tenure.

CEO Marissa Mayer wanted there to be no mistake that the executive change was her decision.

“I made the difficult decision that our COO, Henrique de Castro, should leave the company. I appreciate Henrique’s contributions and wish him the best in his future endeavors,” Mayer wrote in an internal memo, which Re/Code published in full. Mayer used the rest of the memo to explain a slightly modified chain of command.

De Castro’s Disappointing Performance

De Castro’s performance during his time at Yahoo has garnered a lot of criticism for Mayer.

She hired him in October 2012, just a few months after she took the reins in July of that year. Mayer’s first big hire came with a huge paycheck: $62 million over four years, according to Business Insider. In fact, he made more last year than Mayer herself.

And it quickly became clear that he wasn’t worth the money.

Mayer initially hired de Castro to boost Yahoo’s ad business. She was under the impression that he was more or less singlehandedly responsible for getting Google’s display ad business off the ground, and that he had a big role in YouTube advertising.

Critics disagreed from the start. One person told Business Insider that while he did oversee Google’s display advertising, “It helps that Google bought some great companies like DoubleClick and YouTube and has amazingly talented product and engineering leadership to create a moat.”

A senior executive gave Business Insider another perspective. “[De Castro] is very smart, but he has a difficult personality; both his teams and his clients dislike him… He has no experience whatsoever running any kind of a real ad salesforce, let alone a 1,000+ team selling experiential media into brand buyers.”

One source pointed to De Castro’s presentation at last year’s Leadership Conference for IAB, the major trade group that represents online ads. While the presentation did occur early into his time with Yahoo, it seemed to foreshadow his lackluster performance.

The source told Business Insider that the video “says it ALL.” The source described it as “a disaster. The worst executive presentation of all time in my opinion, and not just because of the language barrier. People joke about how terrible it is.”

De Castro lived up to this reputation, and since then, de Castro’s performance has been equally disappointing. While Mayer didn’t officially give a reason for her decision, people in the industry say he simply didn’t bring in the level of revenue Mayer had hoped for, according to the Associated Press.

Additionally, those close to the situation reported that de Castro has been at odds with other executives including Mayer, especially in the last few months.

What This Means For Yahoo

Mayer has yet to name de Castro’s replacement, and de Castro himself is reportedly receiving a severance package worth about $30 million. He officially leaves the company today.

His hiring seems to boil down to an expensive mistake on Mayer’s part.

Despite this, it seems the consequences of de Castro’s disappointing performance and eventual departure won’t be so severe for Mayer or Yahoo as a whole.

Stockholders are still happy with Mayer’s leadership as a whole, and Yahoo’s stock value has nearly tripled since she took her position in mid-2012. That’s despite the fact that the company’s revenue hasn’t increased.

Yahoo stocks are currently trading around $40.30 per share, up from about $15.80 in June and July 2012.


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