Yahoo punishes CEO in latest fallout from security breakdown

  • Get News Alerts


Yahoo is punishing CEO Marissa Mayer and parting ways with its top lawyer for the mishandling of two security breaches that exposed the personal information of more than 1 billion users and already have cost the company $350 million.

Mayer won't be paid her annual bonus nor receive a potentially lucrative stock award because a Yahoo investigation concluded her management team reacted too slowly to one breach discovered in 2014.

Yahoo's general counsel, Ronald Bell, resigned without severance pay for his department's lackadaisical response to the security lapses.

Alex Stamos, Yahoo's top security officer at the time of the 2014 breach, left the company in 2015.

Although Yahoo's security team uncovered evidence that a hacker backed by an unnamed foreign government had pried into user accounts in 2014, executives "failed to act sufficiently" on that knowledge, according to the results of an internal investigation disclosed Wednesday. At that time, Yahoo only notified 26 people that their accounts had been breached.

The report didn't identify the negligent executives, but it chastised the company's legal department for not looking more deeply into the 2014 breach. Because of that, the incident "was not properly investigated and analyzed at the time," the report concluded.

Bell declined to comment through his spokeswoman, Marcy Simon.

Yahoo didn't disclose the 2014 breach until last September when it began notifying at least 500 million users that their email addresses, birth dates, answers to security questions, and other personal information may have been stolen. Three months later, Yahoo revealed it had uncovered a separate hack in 2013 affecting about 1 billion accounts, including some that were also hit in 2014.

The breaches, the two biggest in internet history, have already exacted a major toll.

Yahoo already lowered the sales price of its email and other digital services to Verizon Communications from $4.83 billion to $4.48 billion to account for the potential backlash from the breaches. That deal was reached last July, two months before Verizon and the rest of the world learned about Yahoo's lax security.

More than 40 lawsuits also have been filed seeking damages for the breaches. If Yahoo's sale to Verizon is completed as expected later this year, a successor company called Altaba Inc. will be responsible for paying those legal claims.

Yahoo's handling and disclosure of the breaches is also under investigation by the Securities and Exchange Commission and the Federal Trade Commission. The Sunnyvale, California, company says it has spent $16 million investigating the breaches and covering the legal expenses so far.

In a blog post on Yahoo's Tumblr service , Mayer said she didn't learn about the scope of the breaches until September and then tried to set things right. "However, 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," Mayer wrote.

In its report, Yahoo's board said it decided to withhold a cash bonus that otherwise would have been paid to her. Mayer is eligible to receive a bonus of up to $2 million annually. The board said it accepted Mayer's offer to relinquish her annual stock award, which is typically worth millions of dollars.

Mayer said she wants the board to distribute her bonus to Yahoo's entire workforce of 8,500 employees. The board didn't say if it would do so.

Losing her bonus and annual stock award probably won't be too painful for Mayer, who is already rich after working for more than a decade as a top executive at Google and then as Yahoo's CEO for the past 4 1/2 years. She is also in line for a $44 million severance package if she doesn't go to work for Verizon after the sale closes.

Comments

More News

  • Embossed number plates being fixed in vehicles from today

    Embossed number plates being fixed in vehicles from today The Department of Transportation Management has started installing the high security embossed number plate in the vehicles from Monday. The new kind of registration number plate is meant for effective management of automobiles and upgradation of the transportation system on par with the international practice.

  • Gold, silver prices down

    Gold, silver prices down The prices of gold and silver have decreased on Tuesday. According to the Federation of Gold and Silver Dealers' Association, the precious yellow metal is being traded at Rs 55,000 per tola.

  • Job and Career Fair kicks off

    The Job and Career Fair that aims to provide job opportunities for youths started here Friday. Minister for Labor and Employment Farmullha Mansoor inaugurated the two-day fair amid a program at the Nepal Police Club Friday. The expo is organized by the Adhikari Creative Concern.

  • NCEA's general assembly picks new working committee

    The 12th General Assembly of the Nepal Carpet Exporters' Association held Friday in the capital has unanimously chosen an 18-member new working committee. Ram Bahadur Gurung has been elected President while Dipak Bajracharya senior Vice President.

  • Gold, silver prices up

    Gold, silver prices up The prices of gold and silver have increased on Thursday. According to Federation of Gold and Silver Dealers' Association, the price of gold has surged from Rs 54,400 to Rs 54,900 per tola.

Opinion

  • The Doklam dilemma The Doklam dilemma

    Being a buffer state between the two giant neighbors, Nepal should conduct its foreign policy vis-à-vis China and India in a very sensitive manner. Nepal has always maintained that it would not allow its soil to be used against any neighbor. At the same time, Nepal should make sure that its own national interests are never compromised.

    Gaurab Shumsher Thapa

  • Effect of monetary policy on risk, stability and financial crises Effect of monetary policy on risk, stability and financial crises

    The crisis of 2008–09 has reignited a new interest in understanding money and credit fluctuations in the macro economy, and the crucial roles they could play in the amplification, propagation, and generation of shocks both in normal times and, even more so, in times of financial distress. This may reopen a number of fundamental fault lines in modern macroeconomic thinking between theories that treat the financial system as irrelevant, or, at least, not central to the understanding of economic outcomes, and those that reserve a central role for financial intermediation.

    Anup Paudel

Blog

  • The return trip The return trip

    It took us over five hours, drenched in rain, walking through treacherous ratomato sluggishly. It should not have taken more than two hours in a normal day. It was the cruellest irony that no sooner did we reach Panchkhal and sat at the Pipal Chautari to rest, than the bus we had left behind, arrived with people in the bus bursting with laughter on seeing us.

    Hemant Arjyal

  • Prospects for Nepali talents in the Diaspora Prospects for Nepali talents in the Diaspora

    When Indu, a Nepali American teen studying in Virginia, asked Panta whether she could inspire Nepali youngsters into music industry and convince their parents to consider Nepali music as a path to professionalism, the female heartthrob of Nepali music could not fully convince her.

    Sukriti Sharma

Readers Column

  • Traffic Police in Kathmandu

    As busy and hassling as the traffic system in Kathmandu is, the Traffic Police here have to handle an equally strenuous job. Over 1,400 traffic officers in and around the Kathmandu Valley battle against the pestering traffic and air pollution each day.

  • Menstrual taboo outdated

    I have seen my sisters and friends isolated and treated in discriminatory manner during their first menstruation cycle. They were not allowed to look at the sun, to touch water source, flower, fruits, any male family member, nor even hear their voice. The activist may claim the situation has changed and I do agree but still during every month my loved ones turns into untouchables beings.

Popular

Recommended

Suchanapati