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Verizon sought $925-million penalty for Yahoo’s lax security

Verizon demanded a $925-million discount on its acquisition of Yahoo’s online services to help offset the damage from the biggest data breaches in internet history. It ultimately settled on a $350-million concession.

Michael Probst/AP

Verizon demanded a $925-million discount on its acquisition of Yahoo's online services to help offset the damage from the biggest data breaches in internet history. It ultimately settled on a $350-million concession.

Yahoo disclosed new details about its negotiations with Verizon in a regulatory filing Monday. The filing doesn't say why Verizon accepted the lower figure, which was previously announced.

The companies struck a $4.83-billion deal last July, but re-opened talks after Yahoo revealed that personal information had been stolen from more than 1 billion of its users in two separate hacking attacks during 2013 and 2014. The breaches were the two biggest in internet history.

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Monday's filing also revealed that Yahoo CEO Marissa Mayer will receive a $23-million severance package if she doesn't work for Verizon. It's lower than the $44-million valuation disclosed in September because $21-million in stock options and other awards have vested in Mayer's account since then.

Yahoo recently said it won't be paying Mayer's annual bonus or give her a potentially lucrative stock award because an investigation concluded her management team reacted too slowly to one breach discovered in 2014.

Verizon had agreed to buy Yahoo's online business following a long slump at the internet company. What's left, including lucrative stakes in Chinese e-commerce giant Alibaba Group and Yahoo Japan, will be part of a company to be called Altaba Inc.

Yahoo Inc. said in a separate filing Monday that Thomas McInerney will be CEO of Altaba. McInerney has been on Yahoo's board since April 2012 and has worked at IAC/InterActiveCorp and Ticketmaster.

Arthur Chong will serve as general counsel and secretary and Alexi Wellman as chief financial and accounting officer. DeAnn Fairfield Work was named chief compliance officer.

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