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.
Redwood City, CA (PRWEB) 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.”
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