

Tumblr founder to get $81 million to remain at Yahoo - codegeek
http://www.cnbc.com/id/100951955

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canistr
To me, the most fascinating aspect of the article is the list of Yahoo
acquisitions since Mayer joined:

July 17, 2012 Marissa Mayer becomes Yahoo CEO

October 25, 2012 Stamped (Social Recommendation)

December 4, 2012 OnTheAir (Video Conferencing)

January 22, 2013 Snip.it (Social Network)

February 12, 2013 Alike (Social Recommendation)

March 20, 2013 Jybe (Social Recommendation)

March 25, 2013 Summly (News Aggregation, Summarization)

May 1, 2013 Astrid (Productivity)

May 9, 2013 GoPollGo (Real-time Surveys)

May 9, 2013 MileWise (Reward Programs)

May 10, 2013 Loki Studios (Mobile Gaming)

May 17, 2013 Tumblr (Blogging)

May 23, 2013 PlayerScale (Online Gaming)

June 12, 2013 GhostBird Software (Mobile Photography Apps)

June 13, 2013 Rondee (Video Conferencing)

July 2, 2013 Bignoggins (Fantasy Sports)

July 2, 2013 Qwiki (Automated Video Production)

July 3, 2013 Xobni (Address Book Apps/CRM)

July 18, 2013 Ztelic (Social Analytics)

July 31, 2013 Lexity (E-commerce App Platform)

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nashequilibrium
It's funny, i just summarized her davos talk last night and looking at these
aquisitions, they all fall into her 'vision'. The only one that stands out is
tumblr since she said they were looking to do small aquisitions, therefore she
is following her vision and the market will decide if it is successful. If she
succeeds, the media will be praising her to the moon and if she flops, we will
hear ll the scathing blog posts. So far she has raised yahoo's stock price,
which has taken some pressure off here especially from some vocal yahoo
shareholders.

~~~
fitandfunction
The stock price has been driven by share buybacks, and the appreciation of
Alibaba.

It's more accurate to say that financial markets, past acquisitions, and
activist investors have driven up the share price.

That said, the share-price uptick has extended her "honeymoon." Hopefully, all
of these acquisitions, cultural changes, etc. add up to something.

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VandyILL
Doubt it's about his talent (even though he is very talented). Think it's more
of a PR move. It'd look pretty bad for Mayer & Co if he ditched Yahoo in a
couple months, and a ton of people would notice / company would get bad press.
Keep him & you never have the negative press. Plus the scope of the negative
press would dwarf the type of press this blurb is getting.

Question is, is the difference between the $81 million and the amount they
would have paid him strictly for talent over the course of the contract
justifiable on those PR grounds?

~~~
wavefunction
Well, at $20 million a year that puts him in the company of the 100 highest
compensated CEOs (despite being, well whatever his position is.)

[http://www.aflcio.org/Corporate-Watch/CEO-Pay-and-
You/100-Hi...](http://www.aflcio.org/Corporate-Watch/CEO-Pay-and-
You/100-Highest-Paid-CEOs)

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ryguytilidie
I have no problem with him getting 81m. The fact that all of the other
employees combined get 29m combined while he gets that is pretty lame though.

~~~
jmathai
Not really. Karp is worth orders of magnitude more to Yahoo! than the rest of
the team.

Yahoo!'s always had engineers who could bring products to market. Their
deficiency has long been with executives and the product groups.

~~~
colmvp
Unless you know exactly who each person is on the team, that's making a lot of
assumptions. I've seen enough companies that have key people who aren't co-
founders that don't get a lot of public recognition but significantly make
major contributions to the company. Some would even later become CEOs.

~~~
jmathai
That's a valid point. I assume if those key players exist then they received a
disproportionate % than other team members. Noting close to Karp though I'm
sure.

I stand by my generalization though. Yahoo! doesn't need future CEOs. They
need founders with the vision to execute on an idea.

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tchock23
I wonder if there is a performance component to this, or if it's based solely
on him sticking around for the long haul.

I just finished up an earn out with performance goals on both revenue and
margin, and found it to be very challenging. We ended up making product
decisions with only the near-term implications in mind, and I feel it actually
stunted our growth in both the near and long-term.

Given my experience, I strongly feel companies should base earn outs on length
of time, while giving founders the autonomy to try new things while they are
there. I heard Google shifted toward that model over time, but can't confirm.
Hopefully Tumblr's founder got similar terms...

~~~
tootie
You've just discovered the reason our investment banking system is so screwed
up. Earn $20M on your trades this year? Take $500K as a bonus. Those same
investments lose $30M the year after? Well, now your bonus is just $30K and
maybe you'll do better next year.

~~~
metarev
That is dated; deferreds and clawbacks are pervasive now

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ChuckMcM
It strikes me that the guy in Minnesota walked away with $86M free and clear
from buying a Powerball ticket. :-)

Its a pretty nice retention package, always nice to hear when someone 'wins'
like this. I hope he continues to innovate going forward.

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craigyk
I suppose we're just wired to overestimate the value of individuals. I just
hope he spends a lot of that money, whereby it might actually do the world
some good (rather than 'investing' it) .

~~~
mkehrt
I don't think you understand what "investing" is. Investing is giving money to
someone (or even just a bank) in exchange for something which might change
value. That person is then going to go spend the money somewhere else. There's
pretty much no way to prevent money from moving around other than turning it
into cash and burying it.

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timedoctor
This move of Mayer and Yahoo to buy a bunch of startups at difficult to
justify valuations reeks of desperation. I think it's the continued downfall
of Yahoo.

If you compare with Google acquisitions each of them are strategic and the
aquihire acquisitions are at more reasonable valuations.

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Nate75Sanders
How are these contracts usually written with regards to the event of firing?

Disclaimer: I fully realize that's not statistically likely at all, but I want
any answers to narrowly focus on the legal language in the contract around
that event.

~~~
ChuckMcM
In my experience even if the retainee is fired they get the whole thing, the
retaining company seems to often end up with a clause that says is parting
ways is the retainee's idea they forfeit their retention package.

~~~
ojbyrne
Usually it says "fired without cause" they get the whole thing, but if fired
with cause then they don't.

~~~
ChuckMcM
My particular package it didn't matter why they fired me but anecdotes aren't
data. There was a carve out that if I was convicted of a felony they could
evaluate whether or not to pay me. I asked about the firing or not clause to
our CEO at the time, and he said, "Oh, they won't fire you, if they want to
get out of the obligation they will make you quit."

Which I supposed was probably true.

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briandear
I wonder if he'd be allowed to work remotely.

~~~
tjbiddle
The article mentioned that Tumblr would still be run independently from Yahoo
in New York (Yahoo is in SV). Fun fact: SV can mean Silicon Vally or Sunnyvale
in this case :-).

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pinaceae
good for him. hope he's worth it - founders rarely work well within a
corporate environment where suddenly you have people managing you.

looking forward to him exiting in a few months/years, then doing something new
and cool. should have enough fuck you money by then.

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cliveowen
Good for him to be so driven, I would've retired long ago.

~~~
imjk
What about this article has to do with his drive? It's about Yahoo paying him
$81MM to retain him for the next four years.

~~~
cliveowen
Think about it: you spent years upon years building a blogging platform, which
I guess pretty much anyone would agree is not that much captivating, and you
finally got an exit. And we're talking about Yahoo, with that scale you can be
sure that whatever the future needs of the company might be those will be
satisfied. Basically you brought the company/platform where you wanted it to
be, so $81MM or not I think anyone would be about done with the whole thing.
Retire, find some hobby, move on to better things. Yet he remained, so I guess
he must be very driven and passionate about blogging, that's all I'm saying.

~~~
shawabawa3
> so I guess he must be very driven and passionate about blogging

Or he just wants to retire in 4 years $80 million richer

~~~
ChuckMcM
Or take it easy for the next 4 years. A couple of acquired CEO's I met at
Google when I was there seemed a bit useless if you know what I mean. Great
people but basically putting in their time until their retention clause was
met, or at least it seemed that way. I don't discount the possibility that I
was just envious though.

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beefxq
We are all founders now!

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untilHellbanned
$81 million sounds kinda low for the value of Tumblr.

~~~
coldtea
Err, that's just the money that the founder got IN ADDITION to the sale, in
order to stay with Yahoo.

Tumblr was sold for 1.1 billion.

~~~
untilHellbanned
still think its low,

