The Cost of Cyber Breaches

In case you were of those who thought that there was no real cost to cyber breaches, you might want to ask Yahoo CEO Marissa Mayer and GC Ron Bell about that.

The Yahoo Board has decided not to award Mayer, CEO of Yahoo during all of the recent breaches and renegotiated Verizon deal, any cash bonus at all.  Exactly how much that is was not disclosed, but surely it was in the millions.

In addition to that, the Board voted not to give her an equity bonus (AKA stock or options).  The minimum value of that, according to CNN, was $12,000,000.00 .

Granted Mayer’s net worth is estimated to around $300 million according to Google, but no one wants to walk away from $10-$20 million.

In addition, Yahoo General Counsel Ron Bell has “resigned”.   According to the company, Yahoo did not make any “payments” to him in exchange for his leaving.

Yahoo’s Board said that the GC had sufficient information to warrant substantial further inquiry in 2014 – two years before the breaches were publicly announced.

In other Yahoo news, Yahoo released it’s 10-K and said that it recorded a charge of $16 million in 2016 related to the breach.  Given that the announcement of the breaches came late in the year (mid December for the big breach), maybe a number that small makes sense.  It will be much more interesting to hear how much they will spend in 2017, 2018 and 2019.

In addition, in that same 10-K, Yahoo said that it did not have any cyber breach insurance.  Seriously?  You’ve GOT to be kidding.

In many cases of a breach, the stock price dives and then rebounds for the most part so investors are not hurt, but in this case, the investors, too, were hurt.

First, the sale price was reduced by $350 million and the sale has been delayed for a year.  Second, Yahoo gets to pay 50% of most of the breach costs and lastly, Yahoo gets to foot the entire bill for the SEC investigation and fines and any shareholder suits.

How many other people at Yahoo were also sacrificial lambs will likely never be known.

Information for this post came from Venture Beat and  Variety.

Facebooktwitterredditlinkedinmailby feather

Leave a Reply

Your email address will not be published. Required fields are marked *

*

code