Yahoo Names Google’s De Castro as Chief Operating Officer
Yahoo! Inc. (YHOO) Chief Executive Officer Marissa Mayer named Google Inc. (GOOG) executive Henrique de Castro as operating chief, picking a deputy from her former employer to help revive growth at a Web company beset by sagging sales.
De Castro, 47, has been vice president of Google’s partner business solutions worldwide since March, Yahoo said yesterday in a statement. He was granted a pay package worth as much as $61.6 million over four years, including as much as $20 million in restricted stock units to compensate him for leaving Google, where he has worked since 2006.
The fifth CEO in four years, Mayer is seeking to restore stability to management ranks, ramp up product innovation and reverse three years of declining revenue as Web users ditched Yahoo in favor of competitors Google and Facebook Inc. She hired Ken Goldman as chief financial officer last month, after adding former American Eagle Outfitters Inc. (AEO) executive Kathy Savitt as chief marketing officer in August.
“It is good for Yahoo and its shareholders to see the company actually attracting Silicon Valley talent,” said Paul Sweeney, Bloomberg Industries’ director of North American research. “Its recent history has been one of losing top talent. On this score, Marissa Mayer appears to be having a positive impact.”
De Castro previously oversaw media, mobile and platforms globally at Google, Sunnyvale, California-based Yahoo said. He also has held jobs at Dell Inc. (DELL) and McKinsey & Co.
“His operational experience in Internet advertising and his proven success in structuring and scaling global organizations make him the perfect fit,” Mayer said in a statement. Mayer, who gave birth to a baby boy on Sept. 30, told followers of her feed on the Twitter Inc. site that she returned to work yesterday.
Like Mayer, de Castro may have been lured to Yahoo by the challenge of turning around a struggling business, said Ronald Josey, an analyst at ThinkEquity Partners LLC.
“Within Google, it’s very hard to differentiate yourself,” he said. “Why leave Google to work at Yahoo? It’s an opportunity to be the No. 2 person at a giant Internet company.”
The list of managers to leave Mountain View, California- based Google for high-profile jobs elsewhere includes Sheryl Sandberg, who became Facebook’s COO in 2008, and Tim Armstrong, who became CEO of AOL in 2009.
De Castro will start at Yahoo on or before Jan. 22, Yahoo said. The executive will receive a base salary of $600,000 in addition to one-time retention equity awards totaling $36 million, according to a filing. Yahoo also will pay de Castro a cash bonus of $1 million, payable within a week of his start date, and the restricted stock worth as much as $20 million, the filing said.
Mayer will probably keep looking to Google as she seeks leaders from the outside, Josey said. Another position she’s likely to try to fill is head of software development, he said.
“She’s going to fill the executive ranks with the people she wants in there,” Josey said. “She is sort of looking to bring new talent and new ideas into the organization.”
Yahoo shares gained 1.5 percent to $15.92 at the close in New York. The stock has declined 1.3 percent this year.
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