I know a few people at Yahoo, and the good employees (i.e. the ones who didn't just do 15 minutes of work a day while "telecommuting") tended to speak highly of her too.
I think what you're really seeing is Warren Buffett's aphorism, "When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact." People tend to overestimate the effect of a CEO on the business's returns. Usually the prime drivers of a business's success are external to the business itself (eg. customer preferences, technological shifts, competitive landscape).
You can draw your own conclusions about what that should mean about CEO pay, but unfortunately human beings are hard-wired with a cognitive bias to ascribe effects to people, rather than to systemic factors.
(As a side note: I wonder if this is what'll happen to Musk regarding Tesla. As amazingly innovative as Tesla has been, the auto industry has a reputation for terrible economics.)