Tumblr founder to receive US$110 million retention payment from Yahoo

By IVCPOST Staff Reporter

Aug 09, 2013 06:51 AM EDT

On Thursday, a regulatory filing revealed a US$110 million retention payment of Yahoo to David Karp, Tumblr's founder. Yahoo's acquisition of the blogging service on the internet included the windfall for Karp and Tumblr investors, given that Karp would stay in his job within the next four years.

Karp and the investors of Tumblr proposed the retention payment when they agreed to sell Tumblr for US$1.1 billion in May 2013. Marissa Mayer, Yahoo's CEO, pledged to maintain the features of Tumblr in hopes that the purchase would not alienate the current users of the blogging service. As part of Mayer's promise "to not screw it up," Mayer allowed Karp to independently manage Tumblr in New York. Yahoo is currently headquartered in Sunnyvale, California.

Karp is believed to own 20% to 25% in Tumblr. According to Yahoo's filing, Karp's payment would include US$70 million in share and options and U$40 million in cash.

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