Tim Armstrong, Chairman and CEO of AOL Inc., speaks during an interview with Fox Business Channel in New York
Tim Armstrong, Chairman and CEO of AOL Inc., speaks during an interview with Fox Business Channel in New York December 3, 2014.  © Brendan McDermid / Reuters—REUTERS

Why AOL's CEO Is Getting a $59 Million Bonus

We already knew that AOL chief executive Tim Armstrong stood to make a bundle from his company's $4.4 billion sale to Verizon Communications. Thanks to new documents filed Tuesday, we also know that Armstrong's payout includes a "Founders' Incentive Award" worth about $59 million.

The bonus stems from Armstrong's deal with Verizon (vz) — a long-term contract that will keep him employed with the telecom giant — which stipulates the AOL CEO will get stock equal to 1.5% of AOL's (aol) market value once and if the sale is finalized. AOL's market value was around $3.9 billion when the deal was announced, which means Armstrong would get about $59 million in stock options. Half of them would vest three years after the deal closes, while the remaining half vest after four years.

Armstrong, who collected about $6.9 million in compensation from AOL last year, has a 6.7% ownership stake in that company, which would be worth about $84 million based on current market value.

Tuesday's filing also confirmed previous reports that Verizon had considered pursuing a joint venture that would have given Verizon access to AOL's advertising technology business, which is seen as a key component to the deal.

[Re/code]

The 15 Most Bizarre Moments From the Consumer Electronics Show

A brand ambassador tests Samsung's Gear VR headset at the Samsung Galaxy booth at the International CES on Jan. 6, 2015, in Las Vegas.
A brand ambassador tests Samsung's Gear VR headset at the Samsung Galaxy booth on Jan. 6, 2015.Jae C. Hong—AP
A brand ambassador tests Samsung's Gear VR headset at the Samsung Galaxy booth at the International CES on Jan. 6, 2015, in Las Vegas.
Frank Lee, Brand Marketing for LG Electronics MobileComm USA, demonstrates the enhanced selfie feature on the new LG G Flex 2 mobile phone on press day for the 2015 International Consumer Electronics Show (CES) at the Mandalay Bay Convention Center in Las Vegas on Jan. 5, 2015.
Attendees lay on Serta mattresses at the Serta stand on Jan. 6, 2015 at the Consumer Electronics Show in Las Vegas.
Joe Clayton, CEO of Dish, arrives on stage banging a bass drum followed by company mascots during the Dish news conference at the International Consumer Electronics show (CES) in Las Vegas on Jan. 5, 2015.
A transparent TRW model car is seen during the 2015 International Consumer Electronics Show (CES) in Las Vegas on Jan. 6, 2015.
At the 'Unveiled-event' a young woman has a look at salad at the CES electronics and consumer technology tradeshow in Las Vegas on Jan. 4, 2015.
The drone'Nano' from 'Zano' on Jan. 8, 2015.
Attendees interact with wity screens that run on Intel's Realsense technology on Jan. 6, 2015.
An attendee wears Altspace Virtual Reality head ware on Jan. 6, 2014.
Sony Electronics President and COO Mike Fasulo displays the Sony 4K Action Cam at a press event on Jan. 5, 2015.
Consumer Electronics Association President and CEO Gary Shapiro exits a Mercedes-Benz F 015 autonomous driving automobile after it was unveiled at a Mercedes-Benz press event on Jan. 5, 2015.
A display shows Panasonic's virtual make-up mirror at a Panasonic news conference on Jan. 5 , 2015.
Selfie sticks of the company 'Noosy' displayed on Jan. 8, 2015.
World freediving champion Stig Severinsen holds his breathe underwater for a total of 5 minutes, 35 secs to demonstrate the functionality and accuracy of the Masimo SET pulse oximetry device on Jan. 8, 2015.
Workers install an advertisement for a new S'UHD TV from Samsung Electronics on the side of the Las Vegas Convention Center on Jan. 4, 2015.
A brand ambassador tests Samsung's Gear VR headset at the Samsung Galaxy booth on Jan. 6, 2015.
Jae C. Hong—AP
1 of 15
TIME may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.