Yahoo! Is Paying Tumblr Founder David Karp $81 Million To Stay For 4 Years

Posted Aug 9, 2013

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.

[Source: AllThingsD]