eBay Inc (NASDAQ:EBAY) has dropped the pay of CEO John Donahoe by 53%. Donahoe was paid $13.8 million, including salary and bonus in 2013. This is down from $29.7 million a year ago. His basic salary increased by 2%, but the annual cash incentive fell by 43% from a year earlier. Donahoe performed well, but eBay’s financial performance did not “fully meet expectations.”
eBay generated $850 million in the final quarter of last year, which is an increase of 13%, but the results did not meet expectations. The primary reason for Donahoe’s price cut is the one-time award of $14.8 million in performance shares that were awarded in 2012, which doubled his compensation in that year.
The pay cut comes at a time where Donahoe is battling with billionaire activist shareholder Carl Icahn. Icahn wants eBay to spin off PayPal. eBay acquired PayPal in 2002 for $1.5 billion. PayPal’s growth has been skyrocketing in the last few years and now accounts for 40% of the company’s total revenue. Icahn owns over 2% of eBay’s shares and nominated two people to eBay’s board of directors.
eBay rejected both of the nominees and is asking shareholders to vote against the nominees.