Yahoo! Is Paying Tumblr Founder David Karp $81 Million To Stay For 4 Years
Tumblr founder David Karp is being paid to stay at Yahoo! for the next 4 years. You may recall that Yahoo! acquired Tumblr for $1.1 billion in May 2013. Karp did not expect to sell his company to Yahoo!, but he was motivated to sell because Yahoo! was giving Tumblr a shortcut to the hard things Tumblr had to learn in order to grow their business.
In a form filed with the SEC, it was revealed that Yahoo! is going to pay $81 million in cash and stocks if he stays with the company for four years. Karp will get common stock of Yahoo! valued at $41 million and $40 million in cash, which averages to about $27.5 million per year.
Karp will also get unvested stock options and restricted stock units valued at $29 million, which is believed to be going to Tumblr’s employees. Before getting acquired by Yahoo!, Tumblr raised $125 million in funding back in 2007.
The company had around $16.6 million in cash left when they were acquired according to the SEC filing.
With a staff of around 175 people, Tumblr would have had to raise more money to stay afloat. Good thing that Marissa Mayer is on an acquisition binge.