
Yahoo’s Marissa Mayer to Make $186M from Verizon Deal - Element_
https://www.wsj.com/articles/yahoos-marissa-mayer-to-make-186-million-from-verizon-deal-1493103650
======
wand3r
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.

~~~
mason55
> _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).

~~~
evilduck

      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.

~~~
coldtea
> _I 'm not angry at Mayer at all, I just don't understand why companies agree
> to golden parachute deals like this for failure._

Because "the company" that decides is the board -- and these people rub each
other's backs...

~~~
mcbruiser3
That, and also probably because otherwise CEOs would take ZERO risks. Not sure
if that's a good thing or a bad thing.

~~~
evilduck
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?

------
rekshaw
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.

~~~
jacquesm
> I guess its just as well so no one will feel bad not hiring her again for
> anything, ever.

Companies will line up to hire her again.

~~~
skuhn
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.

~~~
enraged_camel
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.

~~~
kooshball
>That's what I don't get about these people.

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.

~~~
jacquesm
I didn't see MM take any big risk here. Success -> large payout, failure ->
still a large payout. Elon Musk is taking risks.

~~~
drakonandor
Taking the job leading a sinking ship was a pretty big risk.

~~~
mavelikara
And if the ship had sunk, what did she stand to lose?

------
aresant
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.

~~~
twothamendment
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.

~~~
jacquesm
And the best bit: anybody else could have recovered your account too!

------
serg_chernata
I don't get it.

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.

~~~
demonshalo
> 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.

[https://www.statista.com/statistics/260291/number-of-full-
ti...](https://www.statista.com/statistics/260291/number-of-full-time-yahoo-
employees/)

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!

~~~
getpost
>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.

~~~
demonshalo
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!

------
jedberg
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.

~~~
yeukhon
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.

------
Overtonwindow
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...

------
abhv
Don't hate the player!

Before a CEO takes a job, they negotiate well for the negative outcome (which
usually ends their business career, and begins their political one).

~~~
metaphorm
with all due respect, this is horseshit.

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.

~~~
nostrademons
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.

~~~
metaphorm
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.

------
throw2016
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.

------
throwaway136
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)

~~~
run4yourlives2
She increased Yahoo's value 200%. How is everyone missing this?

~~~
scholia
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.

------
tlogan
I think this is a little excessive because the amount is 4% of the entire
Verizon deal.

------
brilliantcode
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.

------
agjacobson
One of the worst thefts from common shareholders ever.

------
idlewords
How badly do you have to fail in this industry to not get a payday?

------
greenhatman
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?

~~~
hodder
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?

~~~
GVIrish
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.

------
ganfortran
That is a lot money for failures. What a nice world we live in!

------
apercu
I am glad she got a golden parachute only because if she was male she would
have gotten one.

The larger issue is the one of CEO compensation in the first place.

------
progx
The most expensive weather app of all times.

------
ianamartin
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.

Good for her. She deserves every penny.

~~~
briandear
Look at Yahoo!'s aquisions and someone tell me with a straight face that those
decisions were the hallmark of a talented CEO.

~~~
ianamartin
Tell me with a straight face and a correctly spelled acquisition, that there
was anything Mayer could have done.

That company was a shitshow.

------
js2
Non-paywalled (take your pick):

[https://www.nytimes.com/2017/04/24/technology/marissa-
mayer-...](https://www.nytimes.com/2017/04/24/technology/marissa-mayer-will-
make-186-million-on-yahoos-sale-to-verizon.html)

[https://www.theguardian.com/technology/2017/apr/25/yahoo-
mar...](https://www.theguardian.com/technology/2017/apr/25/yahoo-marissa-
mayer-payout-186-million)

~~~
larrik
Isn't NY Times paywalled?

~~~
gregschlom
You get a certain number (9, I believe) of free articles per month

~~~
brudgers
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.

------
MrFantastic
Who decides the CEO compensation? The Board of Directors.

Who decided the Board of Directors compensation? The CEO.

Follow the money.

~~~
tuna-piano
Who chooses the board of directors? The shareholders.

Who paid the $186M? The shareholders.

Who negotiates the maximum compensation for themselves? You, me, Marissa Mayer
and 7 billion other people.

Who are you blaming here, and who made poor decisions (if anyone) in this
whole epic tale?

~~~
MrFantastic
If enriching yourself is the goal they do a fantastic job of it. It's a
plutocracy.

Shareholders vote on the BOD candidates after they have been selected by the
Board.

Do you really think the Board will nominate someone is going to cut their
compensation?

------
smallgovt
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.

------
Neliquat
Giving female tech CEOs a good name. /s

~~~
jrs235
I know /s but.. obligatory xkcd:

[https://xkcd.com/385/](https://xkcd.com/385/)

~~~
agjacobson
Yep, men don't get called for routine thefts. And she is talented. Still a
theft.

------
run4yourlives2
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.

~~~
hodder
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.

~~~
scholia
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.

