Michael Katz, a former high-profile advertising exec at Yahoo who sold Interclick to the Silicon Valley Internet giant, has filed a lawsuit, claiming the company tried to “cheat him out of the compensation he was promised during negotiation of the acquisition and to humiliate him as well.”
The filing centers on a retention bonus that Katz alleges was owed him as part of the purchase of the ad-targeting company he sold to Yahoo in 2011 for $270 million.
Katz was fired in a bar by HR head Jackie Reses, the lawsuit states, two weeks before he was due to receive the first large bonus payment of $1.35 million from the company. Three other payments were to follow, along with the vesting of a number of stock options.
As I previously reported, Katz’s exit from Yahoo was not pretty, which has also been the case with several former exec after new CEO Marissa Mayer arrived last year:
Considered a savvy online ad player and a well-regarded entrepreneur, Katz came to the Silicon Valley Internet giant a year ago when it bought Interclick, the ad-targeting company he co-founded and headed, for $270 million.
Yahoo later used Interclick’s technology in its audience-buying platform called Genome. In a reorganization announced in January, Katz was placed in charge of sales operations and data and performance optimization for Genome.
The data unit is at the center of efforts by Yahoo’s new CEO Marissa Mayer to turbocharge its ad business.
But the Katz missive clearly signaled that his departure was not an amicable one, which sources underscored was part of a larger rejiggering of the ad sales staff under new COO Henrique De Castro.
“As some of you are starting to learn, my last day with the company will be today,” wrote Katz on Friday. “Leaving Y! is not the hard part — how it happened and leaving all of you is what makes this difficult.”
How it happened, said several sources, was that Katz was suddenly told by HR head Jackie Reses last week that there was not a place for him, only days before a large 12-month retention bonus was to be paid out to him for the Interclick acquisition.
While it is an unusual thing to part on willfully difficult terms with an entrepreneur, as it sends a bad signal to others considering joining the company, Yahoo’s new leadership has been playing hardball with a lot of top execs it is parting ways with, and is also limiting departure packages.
Asked for comment, a Yahoo spokeswoman responded, “We don’t comment on legal matters.” Katz was unavailable for comment, but referred me to the lawsuit filed.
Here’s the lawsuit complaint and summons, with more to come: