Someone made a compelling case a few months ago that Mayer executed perfectly for what she was brought in for. Activist investors brought her in after buying the stock super low and then liquidated at the perfect time after the stock rallyied.
Regardless, objectively Yahoo failed and she bears a large share of the responsibility. Absurd reward for botching a lot of the sale, operations and core of that company. I think she tried hard but man I wish I got 9 figures for effort.
It's very interesting to see so many people on the Internet complaining about Marissa's golden parachute. Honestly, the only remarkable thing about it is that she's a woman. These types of rewards are handed out all the time to CEO's of failed companies. Failed CEO's get them too, and frankly, I don't think Marissa failed.
Frankly, she did what she was supposed to do: sold the company, satisfied Carl Icahn, and improved internal morale. From what I heard anecdotally, she took an internal culture of rot and at least made it a place where people didn't dread going into work every morning. It's kinda like she pulled the teams out of the swamp, and rested them on a muddy, cold bank of the river. At least they weren't drowning anymore.
The pivot to mobile-first was a big deal, internally. They really lived and breathed that change, as is evidenced by the tremendous amount of engineering they put into simple things like their mobile weather app. It didn't ultimately work, but it was the right direction to be going, honestly.
Was it all misguided and doomed from the start? Sure! Yahoo! was the new AOL, and it was a miracle the company didn't get sold off to a media firm. But then, Verizon is kind of building its own media arm, and it already owns AOL. The fact that anyone bought Yahoo is a testament to Marissa's leadership. Would you have bought it, given the opportunity? I probably wouldn't have either. But she made the sale. If nothing else, that golden parachute is a commission just for ending the damn place as a going concern.
One of the things that really killed Yahoo, that no one talks about, is that they had these security people called Paranoids. They were great, super smart, always available, BUT, they held sway over everything and it was very very easy to just say, "naw, forget that 6 months of work, throw it all away, the Paranoids say we can't put it on production machines."
This was evidently an entirely acceptable thing to happen, internally, and it's why so many things were killed. It's also why you don't hear about constant data breaches at Yahoo! anymore, though.
> One of the things that really killed Yahoo, that no one talks about, is that they had these security people called Paranoids. They were great, super smart, always available, BUT, they held sway over everything and it was very very easy to just say, "naw, forget that 6 months of work, throw it all away, the Paranoids say we can't put it on production machines."
I'm pretty surprised to hear that Yahoo had a security team with that much influence, given their leak of over 1bn accounts and subsequent failure to disclose that information for 3 years.
Nope, definitely not the case. Seen the inside of many big companies who have top tier security teams. None that I've seen have veto and none can block shipping. The best they can do is escalate, and the business owner gets to decide if they want to ship or not.
Security is a business issue like anything else, and good security people can convincingly state their business case. It sounds a bit like they did security by cargo cult.
>>One of the things that really killed Yahoo, that no one talks about, is that they had these security people called Paranoids.
Did this group of Paranoids hold product-blocking sway after or before the highly publicized Yahoo! hacks? Lose-lose no matter which branch of the analysis tree we traverse.
Based on the timeline of the higher up link about the leak and the below article, its hard to tell. They appear to have had sway before the leaks were public, but they could have been known privately or people could have just been aware of how many holes they had in their system. Seems like it might have been a case of closing the barn door after the cows are out
> objectively Yahoo failed and she bears a large share of the responsibility
Curious to hear more on this. Yahoo! was a disaster before she came in, she tried some things to turn it around, it didn't work.
One of the arguments for this kind of compensation in this situation is that you want the CEO to take a risk to try to turn around the company. A high profile "failure" like this also means she won't be able to get a job for awhile so you're compensating her for that.
The problem is that we don't know what the alternate universe holds, where a different CEO was brought in. It might be that that most likely scenario was that Yahoo! drops to $0 and Marissa actually made $5B for investors that an average CEO would not have made (in baseball terms her VORC [value over replacement CEO] was $5B).
A high profile "failure" like this also means she won't be able to get a job for awhile so you're compensating her for that.
Ok, but when is that compensation enough? At 10x your lifetime spending needs, or 20x? She just got paid enough for generations of her descendants to be on easy street for life. It's absurd.
Edit: I'm not angry at Mayer at all, I just don't understand why companies agree to golden parachute deals like this for failure. She took a career-ending risk, that's worth some compensation, but the scale seems disproportionate.
I wish this was researched more. The same group of interconnected people serve on board or C-levels of companies. They happily give raises and generous offers to others, because they know that when their turn comes, the others will do the same to them. Meanwhile, small-time shareholders are powerless, because a large chunk of the shares are held by institutions who don't want to rock the boat, and are just happy that things are fine the way they are.
Sociology of elites looks at this kind of thing. One fairly easy thing to do is to do a network analysis of board membership. The ones I've seen tend to describe what you already know anecdotally, a small group of elites controlling a large number of central companies.
In the cases where the golden parachutes are absurdly large, I don't really see how they're really incentivized to take risks either. Perform or don't perform, the difference is the CEO's yacht size, or how many mansions they own around the globe?
If a CEO doesn't have any negative sequences from their decisions, then any "risky" decisions they take for the company are not actual risks for them either.
> A high profile "failure" like this also means she won't be able to get a job for awhile so you're compensating her for that.
Pure speculation, but I highly doubt that someone as highly touted as Marissa Mayer will be out of job offers for quite some time. A lot of people will attribute the failure to turnaround Yahoo on Yahoo itself rather than on any of the reported shortcomings of the CEO.
Certainly, I think the odds were stacked against her, but if the stories from various reports from inside sources and journalists over the last few years are true, I'd be cautious about absolving her responsibility from the eventual outcome.
I am a very mediocre programmer and certainly not qualified to run a public company, but I think Yahoo could've been saved. Simply because it had a lot of capital (relative to startups) and with her there, the ability to attract and retain talent for a while. She had a couple years of runway. I would've tried:
- making a personalized/customizable search engine.
- making a browser, in hindsight maybe they could've worked with Brendan Eich on brave.
- structure like Google with subsidiaries (even if not formally) and have technology and entertainment as 2 businesses.
- really tighten up security on the tech side; damn.
Then see what works and iterate. Selling Alibaba and Yahoo Japan at the end of this; Yahoo basically had negative value.
IDK, selling to Verizon and then having your value slashd-- Twice, when multi hundred million accounts are breached and getting raked over the coals on valuation was a sad finish. To her credit; I like to believe the sale was poor because she wanted to keep going and didnt expect to have to firesale the firm, but I don't know. Obv. Yahoo wasn't "just her" but they were in a poor state so she probably had a lot of operational latitude. It's super rare; if it even ever has happened; that a company is so desperate but still so powerful-- that they give up that much control. Being a total outsider and having those resources and a canvas not blank, but so f*Ed that you can really try anything; that's once a decade maybe.
I honestly think that Yahoo! could have left the search engine alone. That market's moved on. Bing users only use Bing for some kickback rewards/when they're forced to. Everybody else migrates to Google. Maaayyybe if they offered something drastically different (kind of the way that Duck Duck Go did with privacy) to make themselves stand out, but I feel like the search engine ship had already sailed at Yahoo! Honestly, I would have simplified and slimmed down the homepage. The Yahoo! homepage was a fucking design disaster. Just have it focus on the things that really mattered - some news elements, fantasy sports, and maybe email. Everything else can go.
A browser like Brave would have been a good move, particularly in junction with tightening up security on the tech side. It would be like doing community service to try and right the wrongs of the past, or something, ha!
The problem I saw with Yahoo! was that it was a business with no focus. They acquired Tumblr... and then did nothing with it, which was perplexing. Tumblr has a youth market, and if Yahoo! had actually done stuff to improve the Tumblr experience, they really could have put that $1 billion they wasted in acquisition to use via marketing/ads. Hell, maybe they could have somehow capitalized on Vine folding and turning Tumblr into a bigger video platform (the layout loans itself well to it.)
Interesting. I agree with almost everything. Still think search is huge. A highly customizable, secure private search engine. Your own pagerank.
I also think we agree that there was a lot of verticals to explore and strategies to employ but hers turned out to not be a good one. I think it was possible
The biggest problem was she bought too many new startups trying to gain the mobile market, specifically to make Yahoo a place for your daily digest and entertainment. The Summly acquisition was a big noise, but I don't know what happened to Summly. Did it ever integrate into Yahoo? I know they did something to do. Think of it, Yahoo's new direction focusing on mobile was correct and was critical. Many of the Yahoo users go there for news and sport game like the Fantasy sports. Recently I have been taking FourSquare's data-selling focus very seriously. Perhaps Yahoo also could sell some of their data to developers and companies. As I mentioned on another post, Yahoo could build a end-to-end photography service business around Flickr, and even sell NLP and image recognition to various companies. They have Tumblr, they have photos, they could do something with that.
Tumblr acquisition was great theoretically, but the social interaction has changed to more rapid social platform like Instagram and Snapchat by the time the acquisition went through (I used to use Tumblr daily with my ex-girlfriend and it was our preferred social platform).
>The Summly acquisition was a big noise, but I don't know what happened to Summly. Did it ever integrate into Yahoo? I know they did something to do.
I believe those series of acquisitions were made just to bring on multiple mobile-experienced teams into Yahoo. The product didn't matter, but hiring teams of proven Mobile-UI/UX/Devs did.
It would be great to see some data behind this assertion if it exists. I suspect that failing for business reasons as opposed to being caught in some illegal scheme isn't as bad when it comes to finding another job.
She's the CEO. You can explain it away but she is as subject to good fortune as much as she is bad.
EDIT: Haters out in force I see. The share price was $16 when she started. It's now $48. It's irrelevant what she did or didn't do to get that. That's the fact, and that's what matters to her employers, the shareholders.
Why shouldn't she be compensated for a 200% increase? The company's long term survival is a goal that may have never been shared by the actual owners.
I don't think you understand how much the Alibaba shares that Yahoo held were worth (~$40 billion) and how little the rest of the business was worth (<$5 billion). This is not a normal situation, where your point would usually be correct. She had zero responsibility for running Alibaba. She ran a business that was worth less than $5 billion, but was compensated based on a stock price that primarily moved based on the run-up in the $40 billion worth of Alibaba stock Yahoo held (and such stock was acquired before she became CEO).
By allowing those shares to accrue and not doing anything stupid at the wheel, she did her job. Whether or not it's fair or worth her comp, is irrelevant.
The shareholders valued her work at a set amount and that's what she was paid.
Unless you're taking an economic stance on the issue, wherein you believe shareholders are messing up future incentives and economic prosperity by recognizing and rewarding CEO's that do the bare minimum of "just don't fuck it up," or something similar, this debate is impractical.
And? Was Meyer not the CEO when this happened? I'm pretty sure she was.
Just because she resorted to something other than organically growing the business to increase the value to her shareholders doesn't mean she's a failure. We're all assuming that her job was to "save" Yahoo. I don't think that was ever really on the table.
> she resorted to something other than organically growing the business to increase the value to her shareholders
Parent comment:
> and such stock was acquired before she became CEO
She didn't do "resort to" anything. Yahoo made that money from an action a previous CEO was ultimately responsible for. If you want to be really generous, you could praise her for not selling the stock—but if we're praising CEOs for every way they choose not to change the companies they come into, then my pet rock would make an awesome CEO indeed.
You have to give her credit where it's due: she saved the Alibaba partnership from that total fuckup, Carol Bartz. CB was such a fuckup, that she's the sun to Marissa's candle. She insulted Jack Ma in front of his underlings when he came calling to Sunnyvale. She refused/forgot to put someone on BABA's board and totally ignored Ma. As a result, Ma said 'fuck you' and took Alipay out of the group without even telling Bartz.
I wish more people looked at the period preceding Marissa (Bartz, Thompson) and they'd realize that Mayer was a Godsend compared to the cabal of clowns running Yahoo before her.
Even if it's true that her management was better than previous management, I think everyone here is applying a standard where someone shouldn't get compensated for management that was provably worse than no management, because having no management is free. If the board of directors had just told everybody to go on without a CEO, the company would have done better financially than if they had installed Marissa.
She was not present when Yahoo invested in Alibaba.
Her job, presumably, as the CEO was to convince all of the enterprise's employees and customers that Yahoo would be sticking around for the long run. At the same time, she had to prepare to wind down the business while returning capital to the shareholders. I would call that a difficult job.
My lesson from this is most companies with excess capital should make investments, not acquisitions. Most certainly a company with a long string of failed acquisitions should. Yahoo has been repeatedly given as an example, but others like Google don't have a particularly great record either. Berkshire Hathaway is a great example of a massive business centrally owned by a very barebones team (in Omaha.)
I believe berberous' point is that if Yahoo's primary achievement (in terms of share value) had nothing to do with her, they could have appointed a stump as CEO and saved $186M+.
because she didn't do anything to increase the stock price? You could have an empty chair as CEO and it would be rose regardless. She made a lot of objectively bad decisions like Yahoo's stint in video, or the bogglingly expensive acquisition of Tumblr
I know the CEO vs Employee payout has been discussed time and time again, yet news like these really make my jaw drop. I guess its just as well so no one will feel bad not hiring her again for anything, ever.
I personally don't think that she will ever work again. She'll be a board filler at a bunch of places I'm sure, but probably not CEO again. We'll see though.
Why would she want to work after making literally hundreds of millions of dollars?
Why would anyone?
That's what I don't get about these people. I'm not saying they should retire, but they can still keep their professional connections and a semblance of "work" life by sitting on various boards or doing non-profit stuff, and not actually have to deal with the humongous stresses of C-level work.
I mean let's be honest: $186M is enough to last Marrissa's descendants forever and ever. If I were in her position, I would figure out a way to make my exit. It's not like she's the founder of Yahoo so there won't be any emotional or moral attachment.
The thing is, the reason you think this way is the same reason why you won't be as successful as her. Because by the time you make your 1MM, you won't take these big risks any more.
Money was clearly not the issue. She was at Google very early and ended up VP. Clearly she didn't need the money.
>>The thing is, the reason you think this way is the same reason why you won't be as successful as her.
If you define success as "has money" then yeah, probably. But that's okay, I don't need nearly as much money as MM. Money, after all, has significant marginal utility. The difference between having $10M and $50M is not that much, unless you have extremely expensive hobbies.
She didn't need the money -- she wanted the power that comes with being the CEO of a big corporation. And I'm willing to bet that applies to most CEOs of big companies, as well as the higher-ranked corporate officials jockeying for position.
I already have that problem and I'm nowhere near rich. Just rich enough not to care about tomorrow. I do still work but only when it is (a) interesting and (b) pays well. Other than that I'd rather do family stuff and private projects.
If I had that kind of money I don't think I would still be able to put a value on my time.
It also depends if she _wants_ to be CEO of a company again, and at what level.
For example, let's assume she couldn't become CEO of something near the level of Yahoo again (which I think she still could possibly, although perhaps slim). I still bet you at the lower end that there would be plenty of 5MM-25MM/year revenue companies that would love for her to be CEO, if not for the press and connections she brings to the table. At that level it becomes whether she wants to accept a salary that she probably would make off the interest of her net worth alone.
Let's be fair: Mayer didn't have a real chance at fixing this company and to pin the blame on entirely on her for "destroying a core brand" is disingenuous at best and irrational at worst.
I much prefer to go in with the mindset that she tried her best but the situation was unwinnable.
>...Let's be fair: Mayer didn't have a real chance at fixing this company
As a user, I found almost all of the changes made to sites like I once used (like the main page or flickr, or the finance page) to be worse than before she was there.
She did some very bad hires such as Henrique de Castro who in 15 months got over 100 million in salary, stock and severance.
She wasted billions on acquisitions that did not add value.
The comments from Yahoo employees since she was hired were never very good, and her behavior with employees was said to sometimes be somewhat bizarre (such as reading a children's book at a comm meeting)
I agree that she likely never had a real chance at fixing the company, but I don't think that proves that no one couldn't have improved the company.
I disagree, many people with a variety of skillsets could have taken over Yahoo at that point and stopped the downfall / changed the culture. Remember under her leadership the email hacking came to light and that did the most to tarnish the brand.
The yahoo brand no longer exists. I think if you randomly choose someone on hn they could have at least saved the brand name.
>I guess its just as well so no one will feel bad not hiring her again for anything, ever
That seems counterintuitive to me. As a CEO, she was responsible for the company's direction. If Yahoo failed, she is responsible and that should affect her employability or at the very least, her worth to a potential employer right? What makes her deserve a reward instead? I know it is part of her contract and all, but I don't understand why an employer would have such a contract in the first place!
Yahoo had been in trouble for a long time before Mayer got in the driver's seat. She got picked. She tried. It didn't work out, but one has to admit it was a long shot for "success" if your idea of "success" is completely turning around a behemoth floundering company.
What would it have taken to make Yahoo viable again? I don't know if anyone could have done it.
Now the next best thing is a sale and that appears to have been a success of sorts.
When ordinary people take a job and fail, even when the job itself is impossible, they don't get rewarded. CEOs shouldn't be treated differently is my point.
If it was impossible and the company couldn't be salvaged, there was no compulsion for her to take the driver's seat. If she was hired to sell the company and she accomplished that, then I'm fine with her getting rewarded. If she was hired to turn the company around, but if instead, she drove it to the ground and ultimately sold, then she does not deserve the reward.
No "good" C level exec would take the job without a guarantee. You can define "good" based on the company's need. Here it was a high profile exec from one of the most profitable Internet companies ever.
Because in modern american business culture, CEOs deserve every salary and bonus they can get their hands on, regardless of their actual ability or the performance of the company
That was my first thought too. The only exception might be if I get bored and have an idea worth working on. I was thinking a wifi connected device to open a banana? But only the ones that curve to the left. You'll just have to throw out the ones that curve to the right.
> You'll just have to throw out the ones that curve to the right.
You'll be missing out on the opportunity to sell a $600 dongle accessory that converts left-curved banana into right-curved ones by rotating them 180 degrees.
She was employee #20 at Google - I'd think if she stayed at Google working as an engineer, her stock from that would be worth more than the ~$200M she earned at Yahoo.
It's shocking to me that Yahoo is worth $48b today, they've been on an inevitable decline towards irrelevance since the mid 2000s.
She took over Yahoo on July 16th, 2012 when Yahoo's stock price was ~$16. It's now trading at ~$48. That's about a 3x.
Google over the same time period has done about a 2.8x.
Microsoft over the same time period has done about a 2x.
There are 100 HUGE reasons BESIDES Marissa that we can account for their shareholder success eg (1) they were trading at a lower PE than market competitors (2) they had a huge Alibaba share that was worth more than the entire Yahoo company when she took over (3) MSFT offered ~$45b in 2008 which means their ~$46b current enterprise value is a huge 9 year failure!
BUT I think that Marissa played the critical role of "responsible adult" that gave the market a reason to let Yahoo survive as an independent.
She had a huge brand name that she lent to Yahoo, and each of the 3 reasons I list above were to the board's detriment.
If anybody should get the fuck you it should be the Yahoo leadership of the mid-2000s, and the board's leadership since then.
The valuation is almost completely unrelated to "Yahoo" the core business. Yahoo the publicly traded company owns ~$40 billion worth of marketable securities (Alibaba and Yahoo Japan mainly).
Imagine if you owned a convenience store that had a vault with $40 billion in gold bars inside. Your business would be worth $40 billion, despite being a convenience store.
> Imagine if you owned a convenience store that had a vault with $40 billion in gold bars inside. Your business would be worth $40 billion, despite being a convenience store.
Not if you owed $12 billion in taxes on those gold bars.
It's a very special, magical vault that confers tax-free status as long as you never open it. There's one gold magnate buyer who has expressed interest in buying your store for nearly the full value of the gold because he never intends on opening the vault.
(I think the metaphor has been stretched to the limit...)
I'm shocked at how bad Yahoo is. I've mostly ignored them for years, but yesterday I had a reason to log in - a small manufacturer uses a yahoo group for support. I've had an account for a decade or so, but didn't know the password. The backup email account looked oddly like my real email with a "2" appended on the end of the user name.
Thinking there is no way this would work, I signed up for a new account with that email address and used it to recover the password for my old account! I must have made up an address when they pestered me about a backup email.
Here is what shocked me:
1) Forgot your password page hung several times. It sat there for minutes and I had refresh and go at it again.
2) New account - verify phone with a code. The page to submit the code would spin and time out after a few minutes. After a few failed attempts they wouldn't let me try anymore - but they still let me log in. Did I really verify my phone or skip it? I don't know or care.
3) I found the group I needed to use. I couldn't find a button to post or join the group. I googled. I had to log in on my phone to get a Join button - there isn't on on a PC.
Yahoo is falling apart. I knew nobody cared about yahoo, but I didn't know until yesterday that the people at yahoo don't care about yahoo.
What is it with their login process? I tried to login to my Flickr account on Sunday, but I couldn't figure out how to do it. It's been weird for years but now they've broken it completely.
Most of the value of the stock was based on their shares of Alibaba. The Yahoo component was largely worthless but the indirect shares of Alibaba are/were valuable.
At one point the stock was actually trading less than what alibaba + Yahoo japan was worth. Effectively the Yahoo business was worth pretty much 0 dollars at least to the market. It seems unfair when you make so much money for pretty much not doing anything for the core business.
They could have taken 86 mill out of that and distributed it among their engineers and top performers. She would still walk away with 100 mill and lives of so many people would be significantly improved.
A: You'd then have people saying "They could have taken that $100M and cut it in half, she'd be fine with 50M and 50M could help people".
B: Yahoo has thousands of employees. Even if you only gave it to the top tenth of employees, we're talking a $10K bonus. Nice, but probably not going to move life significantly.
I really doubt that the top 1000 employees at Yahoo would consider $100k to be "life-changing" in any really meaningful sense. That'd be ~$60k after taxes, and most of those employees live in HCOL areas where $60k really isn't going to change your life. Plus, they're the top 10%, so they're probably generally making good money and have plenty of career options.
> lives of so many people would be significantly improved.
That's ~10k per employee after all the lay offs this year. Last year, it would have made ~8k per employee and even less the year before (only counting full-time workers which inflates these numbers). And it would be even less if you take into account employer taxes for all salary raises.
I personally don't understand this "redistribute CEO income across all employees" mentality because in reality there are very rare occasions where distributing the income leads to any substantial raise in the living standards of the employees. I do believe that she should have done that as a leader, but in terms of what is just/fair/etc, I find the redistribution of CEO income argument to be rather fallacious in most cases!
Note: I am not saying that there are no cases where your argument stands to reason but this is not one of them.
Edit: There is a post at the front page now about how 6 fig salaries are low income in SV. Adding a few thousands to that does not improve lives as much as you might think!
>I personally don't understand this "redistribute CEO income across all employees" mentality because in reality there are very rare occasions where distributing the income leads to any substantial raise in the living standards of the employees.
Who are you to make this judgement? Would you feel the same way if you were being considered for a payout? And how does paying Marissa Mayer all that extra money raise her standard of living? Paying out windfalls more equitably is itself a worthy thing. Sure, some of the money will be "wasted," but it's not for you to judge whether anyone is worthy.
I didn't even allude to who is worthy. What I said was in fact the same thing as you are saying. I am in no position to say who is worthy and NEITHER ARE YOU!
It is up to the board and shareholders to decide what level of compensation they are willing to put up with. But talking about redistribution of CEO income leads to substantial raise in living standards is MOST OFTEN purely fictional!
The argument that it is substantial once you account for employer and employee taxes is purely fictional. Remember that we are talking about a yearly salary so in terms of net income per household, it does not add much. The idea that redistribution of CEO pay will lead to SUBSTANTIAL (keyword here) improvements in the lives of employees is NOT ALWAYS true. Sometimes it is, and this is not one of those times.
> What happens if the money is distributed according to effort and productivity?
It is. Just not according to what YOU think is just or fair. And here is the kicker, what you think is fair is not in-line with what the board and shareholders think is fair. Do you think any employee @ yahoo has created more value than Marissa? if so who? She clearly didn't steal that money but instead created the opportunities under which such a deal was constructed that allowed her to capture that sum.
From the outside, it is rather easy for you to make some fictional judgement. But it is important to understand that her pay, just like all other employees, is a function of how much value she can capture of the total productivity/profits she bring in.
You know what? Good for her! She clearly didn't need the job after her Google success, which means she took the job for the fun and challenge. She knew that if she was successful, her reputation would skyrocket as one of the most successful turnaround CEOs ever, and she would probably be rewarded in the billions of dollars for it.
She also knew that if she failed, her reputation would probably be shot, and she'd never get a chance to take a job that was challenging enough to pique her interest, so she negotiated a contract that made sure she was compensated for the risk to her reputation.
She should be commended for her shrewd negotiation skills.
I think every CEO coming onboard would demand to receive a big compensation package like hers. I believe this is a norm. At the CEO level, you are guaranteed to have a beefy base salary, with a large stock option, and a termination package (whether it is a forceful termination or not). If you are ever considered for a CEO position, you won't need to shy away from making demands because at that point you are guaranteed to have a CEO job at some other company if not this one, soon or later.
I don't hate Mayer at all, I think she was given a sinking ship and she did the best she could with keeping it afloat. If Yahoo/Verizon wants to pay her all that money then that's between them, so be it. I'm surprised Yahoo went as long as it did...
forgive my strong language but i think it's justified in this case. i don't mean this as a personal slight against you, but you just made a statement that is exemplary of the broken culture that leads to outcomes like this. we ought not to accept this as normal. just because it's what currently happens does not mean it is what ought to happen.
I don't think he said anything about what ought to happen, except that the second half of "Don't hate the player" is "hate the game", which implies that he also thinks that this is a terrible system.
yes, those are the literal words of the expression. the contextual meaning of the expression is that it is usually spoken by a winner of the game while gloating about their ill-gotten gains. it's a snarky insult mocking those who have not positioned themselves to score in an unjust system.
I'm coming from the opposite angle because I never took courses in morality in school or spent much time thinking about out of school.
I did take a lot of economics which leads me to believe that the current system is 'fair' in that it's likely just free market forces driving these insane payments.
I do see the argument that no individual has a need for this much money. And, there likely won't be a substantial drop in peformance incentive if there was a sort of judicious salary ceiling implemented. The result of this regulation would be more money to be distributed to shareholders (the rest of the world).
Yeah, that doesn't really seem to be the case, especially in the tech world.
It's more "which usually pauses their business career for a year or so while they work the recruitment gig, living off their golden parachute, and somehow manage to convince another company that they won't turn them into the same trainwreck they made of their last employer".
I am not sure about risk. Mayer had worked at one place before, Google and not as CEO so there was no CEO level reputation to risk. On the contrary this was an opportunity her to build her reputation as a CEO. If it was such a risk as some commentators say she could have chosen something else.
There is an agency problem with management. CEO pay is not connected to performance and there is no way to effect accountability especially for mid and long term interests. When hundreds of jobs are removed to save 10-20 million a cacophony of commentators chime in with sincerity about 'shareholder interests' yet these 'interests' don't seem to care when hundreds of millions are lost to non performing CEOs who take the brand, value and long term prospects of the company down with them.
Billions lost to fines for fraud, brand tarnished, management continues sticking on and yet not a peep from shareholders. It seems we make the rules and arguments up as we go along, as long as it benefits entrenched interests.
Of all the attempts trying to revive a genuinely dying tech company, I think share holders would have been better rewarded if they bring a WallStreet CEO, who slices/dices and sells it for best value. (Apple being everest size exception)
Because she didn't. Yahoo's value was the stakes it had in other companies (Alibaba and Yahoo Japan). Mayer had nothing at all to do with their increase in value, and therefore nothing at all to do with Yahoo's subseqent increase in value.
Modern day feudalism except the shareholders collectively represents the master controlling the workers through the CEO.
It makes sense why a massive payout would be valuable in contrast to the billions of dollars in unlimited upside rewards a share price uplift would bring.
Marissa Mayer spends $1.1 billion and makes ~0.2 billion. It almost seems like her bonus is tied to how much she spent on acquisitions.
Is all the Marissa hate rooted in facts? Or do people not really think that far?
Just because a company failed, doesn't mean the CEO ran it into the ground. Is it possible that the company just didn't have any chance and that she actually did pretty well?
Did you watch the decisions she made as they came down? It was bad call after bad call after bad call. Pretty much no one thinks she did even a mediocre job.
So lets say that Marissa was handed a steaming bag (other than the BABA stake obviously) and that the stub was destined for failure either way (probably true). Why does she still deserve several hundred million from shareholders?
I think that is a criticism of the whole concept of golden parachutes in the C-suite. Mayer's compensation wasn't that unusual but it just seems silly to offer a huge amount of money in the event of failure.
I mean, even high level employees joining a beleaguered companies don't get big payouts if they fail or the company goes under. Why should it be any different for the C-suite? You should only get a big payout for success.
I wouldn't say the company didn't have a chance, I would say that it was on a downward trajectory that would have been a challenge for any CEO to turn around. Given the challenge I understand the aggressive compensation package.
I don't know if Mayer was the best person for the job, but at the least I can't say she was appreciably worse than any of the previous Yahoo CEO's.
I think its largely because she's a woman. Yahoo was a already sinking ship when she took over and I think she did a decent job.
There are loads of overpaid executives in tech and no-one else gets as much hate as Marissa does. The main other unliked executive is Sheryl Sandberg who's also missing a Y Chromosome.
Or, it could just be your confirmation bias. I'm not saying women aren't treated harshly, but plenty of male CEOs also get flak (uber, Adobe etc).
IMHO, women are treated unfairly at lower levels of work, it is hard to sympathize equally for someone who has risen to the CEO level and still feels discriminated.
I think Marissa Mayer's gender was a double-edged sword. She got a lot more media coverage than most males would've gotten in her situation and I think that gave her turnaround effort a bit of a positive perception boost. She also received a lot of scrutiny and a magnifying glass on mistakes whereas a male in that situation might not have.
I agree that Yahoo was a sinking ship from the start, and ultimately I think she may get another shot at CEO because of that.
Good for her. She took a shit job at a company with no future and tried to turn it around. Of course she didn't succeed. No one could have. The company was a mess. She got hammered for years no matter what she did. The press and the bloggers all said she was doing a crap job.
Often such limits are enforced by a cookie that the site stores on the user's computer. The site increments a counter in the cookie on each subsequent visit. If a user chooses to delete the cookies that a business is storing on their computer (say to reduce tracking across the internet), often the business will just send a new one and the count will start again.
There's so much irrational hatred here it makes me wonder if having a real conversation is a hopeless endeavor, but here's to hoping...
'Good' CEO's deserve expensive exit packages EVEN if they fail.
The expected value of a company under the leadership of a 'good' CEO and an 'average' CEO is substantial.
In the absence of alternatives, the board of directors should be willing to compensate the good CEO up to the difference in these expected values. Let's call this difference EVdiff.
The final negotiated contract value depends on the alternatives 'good' CEO and company have available to them. Because there are so few 'good CEO candidates, the two parties often arrive at a fair, final contract value (CV) that is a large fraction of EVdiff.
Once the company and CEO have arrived at a contract value (CV), they must negotiate whether this compensation will be paid on a performance basis.
The company's rational preference is to make compensation 100% performance based because it will lead to better performance. I.e. 'Good' CEO only gets paid if they succeed, and the amount they get paid in those success outcomes is CV divided by risk
The 'good' CEO's rational preference is to get paid CV regardless of outcome because volatility is bad for the individual.
The parties end up negotiating a fair outcome that falls somewhere in between. Because EVdiff is so large in public companies, this usually means a hefty payment even in the failure scenarios. However, what's critical to understand is that this is FAIR as long as the expected value of the contract (as a whole) is equal to or less than CV.
Running a company is inherently risky. You can't judge the fairness of a CEO's exit package based on just the end result.
Whether an exit package is 'fair' requires an understanding of the TOTAL expected value of the CEO's negotiated contract, and whether that TOTAL expected value was less than the added value that CEO brought to the table compared to their best alternative.
Defined in that manner, was MM's exit package 'fair'? Nobody in the public has enough information to answer that. We need to know what her entire package looked like, what other candidates the CEO's were considering, what those candidates negotiated packages would have looked like, and how their performance would have differed. The last point (on performance) is the part that I am most skeptical of any public bystander being able to judge accurately. The vast majority of us (myself included) don't know what it takes to be a public CEO. Heck, I doubt most of us would even be able to accurately guess what their material day-to-day work looks like.
That's a very interesting idea of her heading to Uber... I wonder how she would fare there. It would do a lot to have a woman running a company to rid the "misogyny problem" but she might also be able to grow the company. Uber is not a bad company, it just has bad leaders. If Uber were run by someone with more tact, accumen, and ethics, it would be a great company.
Travis Kalanick doesn't seem like the kind of person who would voluntarily give up his position. I don't think Marissa Mayer would be interested in anything less than CEO. I wonder if he'd be open to a co-CEO, bringing her on to clean up all the garbage.
I am familiar with the concept of the glass cliff, but when things are going smoothly, why would a company (which we already know are statistically mostly run by men) change leadership? If leadership mostly changes during times of turmoil, and the female population in leadership is growing, wouldn't the two correlate quite strongly irrespective of motive?
There may be something to that idea, but the Wikipedia article mentions several studies that cannot be explained that way. For example, the study discussed in "Origins" looked at companies who were adding new board members, and discovered that they were more likely to add a woman if the company had been performing poorly in the preceding months. If the glass cliff phenomenon is simply a result of increasing availability of women in leadership, then you would expect that study to show no difference between companies performing well and companies performing poorly.
Is anyone aware of these outside of the HN/SV tech bubble? When I mention them to non-tech people here in Paris I found absolutely no one aware of these daily scandals.
My aunt which comes out of the fashion world and is trading at the stock market told me that uber is dead. She mostly trades in fashion stocks and the obvious blue chips. So this is probably well known in the finance world.
She deserves some compensation for managing to make Yahoo salable, which was mission impossible when she took the job. I'm not in a position to evaluate the actual sum.
Turning down that deal was what got Yang booted. He hates Microsoft for historical reasons (as did we all) and refused to take what was an obviously great deal. Afterwards, Microsoft decided to compete and the offer was never available again.
The die was cast. You can't strike a die unless you are a jeweler. You can also strike a coin if you are a mint (using a die) but that would be an unlikely idiom.
close an already dead for years crap company and make 93M$? come on man. these people will find new jobs, new employers understand they weren't individually fired for sucking if the whole company shut down
The thing is that when it's that many, the CEO isn't the one doing it.
Also, when you fire someone I hope it's not to be cruel but for the greater good of the company that pays the other breadwinners.
I'm not saying it's easy and I get your point -- it is a really good point. Sometimes, though, to be a leader of many you have to adopt a utilitarian approach and aim for the greater good (yes there are a lot of slippery slopes).
A girl who I once dated taught me a very good lesson: when you break up with someone, it frees them to find the right person for themselves. Sometimes that same approach can work when letting someone go from his/her job. I've seen too many people who aren't good at their job being kept around because the manager couldn't bear to not be "nice". It was bad for everyone, including the person who tries so hard. One of the best essays I've read on a related subject is this:
People have literally murdered for less, or risk their lives for less. US military enlisted gets around 30k per year +30k to 100k sign on bonus. Officer level around 60k/yr. mercenaries around 30k/month. Firefighters and police officers 50-100k year in most places in US. And many of them probably don't sleep well at night. Firing a person from a job is relative, the ones above would probably prefer it over the extremes of what their jobs asks of them.
Everyone has a price. For that many millions, lots of people would do it, especially if the alternative was someone else getting the millions and everyone getting fired anyway.
Well context matters. It is much harder for a boss to close down the local factory and fire employees whose kids grew up together than a boss to fire some folks they've known for less than five years and is an outsider too.
I mean it isn't painless, nobody likes to fail and failing in newspapers around the world sucks more, but there are degrees of suckiness in life
I imagine you are speaking from the interpersonal experience, which I know to be a terrible one. Once you're in "management" teams and entire divisions become numbers in your P&L, not humans. What's more, once you've done something enough times, you become desensitised to it anyway (in this case firing people).
She took the stock price from the mid teens to close to $50 today.
I know we all expect a "Great" CEO to lead the company to world domination, but Yahoo was a sinking ship before she got there, and she was was able to turn that around enough to create an acquisition. By every measure that her employers where using to judge her performance, she was a tremendous success.
Call me when you create a 200% increase in value over 5 or so years.
You may or may not be aware that the Yahoo component of Yahoo is worthless (actually worse less than nothing) while the stake in BABA exceeds the value of the whole thing. NOTE: she also had nothing to do with the decision to buy into BABA.
She did however, buy Tumblr (huge failure), ruled against remote work, drove a mass exodus of engineering talent, oversaw Flickr's hideous decline, and sat in the leadership seat for multiple hacks.
About the only thing she can claim is that she didn't commit fraud.
She also made all Yahoo's products dramatically worse -- at least, she ruined the ones I used via the web. That applies to Flickr, Email and Yahoo Finance in particular.
The general approach appeared to be to make things look prettier while destroying their usability.
If there was anything she actually improved, I missed it.
I could have increased the value even more just by sitting in the chair and doing nothing. Her decisions resulted in less increase than there would have been had she just done nothing.
Regardless, objectively Yahoo failed and she bears a large share of the responsibility. Absurd reward for botching a lot of the sale, operations and core of that company. I think she tried hard but man I wish I got 9 figures for effort.