Yahoo chief Scott Thompson may earn £17.5m this year

Yahoo may pay its new chief executive Scott Thompson as much as $27m (£17.5m) over the next year after he was lured away from his position as president at eBay's PayPal business to help turn around the fortunes of the flailing web giant.

According to the regulatory filing with the Securities and Exchange Commission, the figure takes into account his annual salary of $1m, a bonus that could be up to $3.5m, as well as grants and restricted stock units.

Freeform Dynamics programme director and analyst Tony Lock said he did not consider Thompson's projected earnings to be extraordinary, even given Yahoo's poor profit, revenue and overall performance.

"Yahoo has been having some interesting times over the past few years and it needs to work out where it is going," Lock told V3. "To get anyone to take on the chief job at the company obviously needs some incentive."

Lock added that Yahoo could take a number of  directions. Thompson's role may be to rebuild the company as a successful player in the web space, or to sell it off at a good price, he said.

"Working out how much pay a chief executive should get is one of the hardest things and it is always difficult to compare one company to another," said Lock.

V3 reported that Thompson's predecessor Carol Bartz received a pay package of $47m in 2009, although her annual salary was less than $1m.

Yahoo announced its decision to hire Thompson last week and he will take up his position as chief executive today.

Bartz was sacked by the Yahoo board in September.