HuffPost Founder Pocketed "Only" $21M From Website Sale

Tim Armstrong, Arianna Huffington

In a new court filing, lawyers for two men suing Arianna Huffington for allegedly denying them credit and cash for their role in the founding of The Huffington Post have made public an internal document detailing exactly what Huffington pocketed following the site’s $315 million purchase by AOL, according to The Smoking Gun.

Marked “Confidential” and “Attorney’s Eyes Only,” the February 2011 memo was prepared for AOL board members by Tim Armstrong, the company’s chief executive, and Artie Minson, the firm’s former chief operating officer. Armstrong is pictured at right with Huffington.

The 11-page document details AOL’s proposed nine-figure purchase of The Huffington Post, the deal’s strategic rationale and potential risks, and provides financial and traffic projections for the influential news site. The deal memo, prepared days before AOL announced its purchase of The Huffington Post, also reveals the “total deal consideration” for Huffington, who launched the site in mid-2005.

According to the AOL memo, Huffington, 63, received about $21 million, of which $3.4 million came in options that would vest about 20 months after the deal closed. Additionally, her employment agreement--which was then being negotiated--called for Huffington to receive another $3 million in equity grants (stock options and restricted stock units).

At the time the purchase was announced, some media reports speculated that Huffington’s piece of the deal could approach $100 million. In fact, her share amounted to less than seven percent of the sales price (and likely was less than what was earned by several of the site’s financial backers, like SoftBank Partners and Alan Patricof’s Greycroft Partners).

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