The decision to keep the BABA chunk versus spinning it off or distributing it to shareholders was CEO's decision, there were other interests at play urging other outcomes.
She still had a handle on the cost structure of the underlying business - expenses related to employee headcount, office leases, new project investments, outsourcing vs keeping things in-house - impacted the stock price to some extent, things could've been much worse.
I think she was set for life well before Yahoo! offer, and in light of recent developments with GOOG her Alphabet holdings might have appreciated at faster pace than her Yahoo! holdings.
Moreover, her decisions are not terribly out of line with her predecessors' decisions - Scott Thompson and Carol Bartz layed off, outsourced and cut expenses as well.
Could she have done a better job? Perhaps. Was she the absolute worst CEO Yahoo! could've landed? Probably not.
Columns from cringely paint a interesting, changing picture over the year http://www.cringely.com/tag/yahoo/page/2/
If someone offered me a shitload of money to run a sinking ship, I would have taken the job, just as she did. With this level of compensation, she's all set for life, does not need another job ever. But, with her connections and name recognition, she will have no trouble finding one - trust me. It is a systemic problem with boards of directors hiring incompetent (but well-known) executives who keep screwing up one company after another. All about connections.