It's easy to criticize Mayer but I think the expectations of what she could have achieved were pretty wildly out of whack. I'm reminded of Daniel Kahneman's dissection of CEO performance and the book "Built to Last", in his book, "Thinking Fast and Slow":
> The basic message of Built to Last and other similar books is that good managerial practices can be identified and that good practices will be rewarded by good results. Both messages are overstated. The comparison of firms that have been more or less successful is to a significant extent a comparison between firms that have been more or less lucky.
> Because luck plays a large role, the quality of leadership and management practices cannot be inferred reliably from observations of success. And even if you had perfect foreknowledge that a CEO has brilliant vision and extraordinary competence, you still would be unable to predict how the company will perform with much better accuracy than the flip of a coin. On average, the gap in corporate profitability and stock returns between the outstanding firms and the less successful firms studied in Built to Last shrank to almost nothing in the period following the study. The average profitability of the companies identified in the famous In Search of Excellence dropped sharply as well within a short time. A study of Fortune’s “Most Admired Companies” finds that over a twenty-year period, the firms with the worst ratings went on to earn much higher stock returns than the most admired firms.
Mayer wasn't lucky. But I bet she's far more competent than most of us.
This is just as much an argument in support that she doesn't deserve to get 55 million. Just because you took the helm of the titanic as it was hitting the iceberg doesn't mean you deserve to make 250 times what a regular engineer makes.
This is probably 365x what an engineer makes there, she makes in a day what an engineer makes in a year. With this kind of compensation, the actual outcome of Yahoo's business is irrelevant to her. That and the fact that it is not her own business. This is an illustration of the modern problem of separation of real ownership from control. Henry Ford for example strived to buy out his investors and became close to being the sole proprietor of Ford Motor.
This is why I laugh when people want to flock into the software engineering profession, or act like we are well paid. Software engineering is the watch maker of the 21st century.
I can't think of any profession where the demands to compensation ratio is so out of whack. As an engineer you're expected to be exceptionally bright, exceptionally creative (we have to invent new things all of the time), exceptionally passionate, deal with stress (an off-by-one error can cost your company millions) all while living a very middle class life. I'm sure being a brain surgeon is much more stressful and takes longer to achieve, but hey, those people live in neighborhoods I can't afford to go into.
> I can't think of any profession where the demands to compensation ratio is so out of whack
Teacher is one that immediately comes to mind. Nurse? Probably. Soldier? If you're deployed, certainly.
I don't think software engineers actually have that high a level of demand, on the whole. Don't get me wrong, many lead very stressful lives but a great many are also coddled with free food and amenities in their office, babysitting relatively static code. Then they go home to their comfortable apartments with smartphone app controlled lights.
Nurses? They average $69K per year, and need 2-4 years of education. 90th percentile salary is $97K (presumably for people in expensive areas, or pulling a lot of overtime). That doesn't seem out of line.
My mom was a nurse, and the thing I noticed about her work was that when she was off duty, she was off duty. Since she was not ultimately responsible for any patient's care, at the end of shift she could just walk out and leave it all behind. If they needed her after that, she got overtime at time-and-a-half, I think. And she got a bit of pay when she was on call, too.
Yeah I sort of disagree, but first let me say that I do not think we have it terrible, or that we have the toughest job. What I'm (inelegantly) describing is vs. perception. I don't think people get into the jobs you mentioned for money. Whereas I feel there is this perception that Software Engineer is an elite level paying job, similar to doctors and lawyers.
And I disagree on this; we are (not all of us, I know there are plenty of clock in-and-out engineering jobs) expected to invent new things on an almost daily basis.
I can't think of any other job where you judged based on the number of widgets you produce where you are also expected, again -- almost daily, to produce new types of widgets (that are only vaguely speced for you).
When I think of jobs where people are expected to create new things; I think of architects, fashion designers, and the like.
>Teacher is one that immediately comes to mind. Nurse? Probably. Soldier? If you're deployed, certainly.
No, no and yes. Teaching is an incredibly easy job, you barely have to do anything, and you get paid very well. Nursing is more stressful, but still pays quite well.
I think you very much underestimate the job of being a teacher. Do you know any? I do. Their jobs do not seem easy. Could you control a room of 25 inner city teenagers and get them interested in algebra?
I think you very much overestimate it. Yes, I know several. Their jobs are essentially babysitters. Getting paid $80k/year to put snow pants on kids for recess and then take them off again after, and tell them what books to read is an incredibly cushy gig.
You just said "teacher". You are suggesting that a profession is difficult and underpaid, and "teacher" is not. If you want to argue just about some specific subset of teachers then make that argument.
> I'm sure being a brain surgeon is much more stressful and takes longer to achieve, but hey, those people live in neighborhoods I can't afford to go into.
Most doctors and lawyers don't make lots of money in comparison to a reasonably well paid software engineer. There are tracks that will lead to bigger bucks (if lucky) where you essentially sell your soul for the chance to get there. Big law firms have "partner track", doctors and lawyers can start their own practice, and various areas in medicine can still be very lucrative (eg, plastic surgery). Those tracks are all super hard. The equivalent for software engineers is starting a company or seeking a high level position at a large, fast-growing company.
I agree that software as it exists today will change: more people will come into it, wages will go down in many areas. Smart people that want to make more money will specialize (hopefully choosing the right specialization).
As a comparison though, an independent consultant with a reasonably sought after technical specialty can make significantly more money, with less school and regulation, than lawyers or doctors at similar levels. If you start a successful software business (even a tiny ISV with real customers), you can make considerably more than doctors or lawyers, again with less school and regulation. I'm sticking with software!
A non-specialist physician apparently makes, on average, $195k/year total compensation [1]. This is, as you say, much higher than what the compensation of the vast majority of programmers. While salaries in the Bay Area can be comparable, a doctor's compensation of $195k in Ohio or North Carolina or is equivalent to about $350k the Bay Area.
Specialists earn $284k according to a national average, with some specialties earning far more.
There's really no comparison in what the typical programmer makes versus a doctor, corporate lawyer, investment banker, etc. But those fields are generally much harder to break into, and working conditions can be much worse early on in one's career.
Just met a doctor who owns three planes all worth more than $200k, one was $500k. My wife used to audit doctors in NC and some of them pulled $1 million a year net. The plane guy is not a specialist and one of the NC doctors was a podiatrist.
They have lots of opportunities for outside income on top of the peasant level $200k. Speaking and consulting and taking bribes from pharma.
Attorney pay and software engineer pay seem remarkably similar. Physicians earn, on average, double what attorneys and software engineers make. But there's a lot of ways to cut that: engineers can start earning much earlier than physicians can. There is also a much wider gamut in quality, in that some working software engineers are quite bad, but doctors that are quite bad are rightly forced to leave the profession. This arguably skews the average up. Also less ultimate downside risk in software: nobody can take away your right to practice software engineering.
If the question is: "Where can I maximize my earning potential: law, medicine, or tech?" I still say tech. I'd also argue all 3 of these jobs are "middle class professions", but tech has the highest upside for anyone branching out on their own (IE, fortune 500 is not filled with practicing doctors and lawyers).
While the average attorney makes a comparable amount to a programmer, the ceiling on attorney pay is much higher. If you work for a reputable law firm in a large city, you can expect to make $150,000 base, with significant raises annually until the eighth year when it levels out, usually around $250k+ base. If you then make partner, you can of course make much more, e.g. 600k+. Or you can become corporate counsel, and seven figure compensation is not unheard of.
This might not represent the "average" attorney, but there really isn't a comparable track to take as programmer while maintaining the title "programmer."
Regarding physician pay, you cited the average salary of an internist. There are many specialties (orthopedic surgery, cardiology, urology, dermatology, radiology, etc.) that earn far more on average.
Sample sizes get smaller and smaller as you go up the scale. To be fair, you're no longer "programmer", but "attorney" can mean so many things at this point, it's almost more like saying "working in tech industry".
Yes, that's my point. To travel your "software engineer track," you need to stop being a software engineer and climb the management ladder or become an entrepreneur to get the big salary bump.
> but "attorney" can mean so many things at this point
I don't know what you mean by this. I referred to attorneys at law firms, who can make $250k+/year for life as attorneys. Or doctors in well-paid specialties, who can typically and reliably make $350k+/year for life as doctors.
What's more, in these fields a person's perceived value actually increases with time and experience, whereas a software engineer's perceived value more resembles that of a linebacker.
Even in the Bay Area, I think this track would be an extreme exception rather than the rule. And the Bay area itself is somewhat of an exception. Vast majority of programmers in this country live outside the Bay Area. Another consideration is that 150K in the Bay Area hardly goes as far as 150K in other locations.
I don't know, I think it's far easier to get into the 300k range as a doctor than as a software engineer. There are 300k doctors in every city in the country, whereas there's probably only a handful of companies where you can make that much as an engineer.
My wife is a mental health nurse working with murderers about to be released, preparing them for everyday life in the hope that psychotherapy won't make them re-offend.
That's not a profession that lacks the need to be passionate, or deal with stress (a verbal slip could mean our family is killed) while requiring creativity and years of experience to be effective.
I get to sit on my ass and make over 4 times as much as her.
There are many more professions people could cite, I'm sure.
A family owned business is no longer family owned after a bankrupcy. A salaried-manager-run business is usually still salaried-manager-run after a bankruptcy.
Bankrupcy is not the only way to stop being family owned. Walmart and many other major companies used to be a family business. Overall, family's are more likely to think long term and extract money now instead of aiming for growth for growth's sake, both of which promote profitability.
> the actual outcome of Yahoo's business is irrelevant to her
Maybe, but I doubt. An executive like her wouldn't settle just for a paycheck, success and image are way more important. Instead of becoming the CEO that saved Yahoo, her legacy is that she will become the last CEO of Yahoo (when the worst case happens) that didn't turn Yahoo around plus acquired a bunch of expensive startups. Oh yeah she did turn the culture around inside Yahoo more Google-like benefit, but history book usually tells the bad things first.
In fact it doesn't take an executive role to understand. I wouldn't want to go to another job with little accomplishment in my previous job. I just feel shit if I do.
> An executive like her wouldn't settle just for a paycheck, success and image are way more important.
> I wouldn't want to go to another job with little accomplishment in my previous job. I just feel shit if I do.
Bullshit. Most people would be fine feeling a little shitty for a few years for THREE HUNDRED MILLION DOLLARS.
This theory that somehow executives are motivated "differently" is totally bonkers. They're just as selfish and short sighted and apathetic as you or me, but they're playing at the high-roller table with other people's money.
Quite; consider that in terms of both jobs and shareholder value destroyed, Fiorina has a decent claim on the title of "worst CEO ever" but she did alright out of it herself and is now bragging about how her corporate experience makes her presidential material.
The part of me that loves satire was hoping for a joint Trump/Fiorina bill where they'd both be talking about applying their fantastic business experience in the White House.
Very good and apt reply. I mean there wasn't much of a "push" for her to perform as compared to an engineer. She was already making way too much more. But so do many a politicians. They just successfully sell themselves to "foolish" willing buyers.
This is excellent response. All this 'Greater calling' by most people at top of corporate ladder is bullshit. They have orders of magnitude more time and money to talk about issues irrelevant to business. This way they can ensure tragic/glorious profiles by hacks about their life and times.
No bullshit. Ego plays a huge factor here. I have a high ego and I work competitively, so I am going to be extremely upset if I can't deliver my promises when I sign up for the job. If you are the kind of person that doesn't have high ego for anything you do, be my guest. Would you rather have people mention all the greatness of your accomplishment behind your back or would you want to hear rumors of you getting fired and all the shit work you did? How would you feel if your boss has doubt about your performance? She probably should take a pay cut because she's doing a poor job but I am arguing that some people aren't all about money.
Please don't call my point bullshit because that's horseshit plus we aren't her, so everything here is simply personal perspective.
300 MILLION DOLLARS is not as much to Marisa Mayer as it is to most people. She was already fabulously wealthy before yahoo. I'm not saying she doesn't want the money, but thinking it's her only or main motivator is naive
I think you're completely wrong, maybe you dont know what youre talking about (by not being at exec mulit m position). You judge compensation from your perspective.
My argument is: you forgotten (financial) starting point of her. Jump to yahoo didnt increase her situation x7 (capital) and this is currently widely believed change which must happen to individual to have permanent happines increase because of financial change (inducing financial backed motivation). She for sure is aware of how it works.
That being told your argument against that success and image is not important to her is wrong. It is much more important to her than money compensation.
Have a look at the history of "failed" CEOs. Do they end up back at middle management? How does one measure success in industry? Simple answer: by the size of the check you receive. With $55 million, she could bloody retire and laugh her way to the bank.
There are cases where the CEO deserves many millions of dollars. They are supposed to move the business in ways that are growing very fast and profitable.
There are all kinds of startups that Yahoo could have bought or invested in, all kinds of areas that have the potential to be wildly successful. Who would have thought Amazon, a retailer, would be the platform of the cloud computing world.
It's the CEO job to see this, what not everyone else can see. That's what deserves the many millions of $.
Amazon is an interesting case. With their radical reinvestment strategy of quiet, organic growth, they are the absolute anti-Yahoo. Off the top of my head, I can't think of a single high profile acquisition that Amazon did, whereas Yahoo has a reputation for being the place where the flickrs of the world go to die. Amazon contrasts this with being more like a old economy corporation with merely an internet front. They invest in boring brick-and-mortar logistics-factories, computing-factories and so on that no "true internet company" would touch with a long stick.
Maybe Yahoo has long ago accepted that their only remaining shareholders must be in it for the exciting, flashy news headlines. In that case, they might feel compelled to go for an exceptionally expensive CEO only for the news value, just like very expensive watches are not bought despite their price but because of it. Marissa Mayer then would not have made it if she offered to do the job for half the price, not beating everybody else's CEO spending would have been out of character for Yahoo.
I don't see it as direct payment for the job that she's doing, but rather paying to cover her downside risk. An engineer at Yahoo, if they're sufficiently good (and they do exist), can make it to a life raft and continue their career elsewhere.
Marissa likely has no post-Yahoo career. I doubt she will ever have another regular job after Yahoo, and instead after a little while she'll be a board member and have advisory roles at some places. I don't see how there is another CEO role in her future after Yahoo gets ripped apart by an acquiring iceberg.
The money she stands to make is meant to compensate her for that scenario. It's also meant to be a deterrent to proceeding with a sale in the first place, although I think it will prove to be insufficient.
There aren't daily HN threads with hundreds of people bashing the employees. The employees aren't walking into every job interview as "the person that killed Yahoo."
We like to hold CEOs accountable for failures (i.e. they may never work again). Nobody who can help it is going to take that gig unless they know they're set for life in case of failure.
Let's say you are 30 and you earn quarter of a million a year. I think that's pretty good. You will likely end your career, if you do well, on half a million a year.
If you were given $55 million and left tomorrow, then never worked again, by the time you hit 60 you won't have spent even half of it.
Frankly, $55 million is an obscene amount of money.
But Yahoo was going to be an albatross for any big name that took it. She was a big and rising name in SV for a long time. I think she knew that she was likely selling all of her potential future for this so she took the gamble with her reputation by not gambling with her finances.
That being said I still don't think she did a particularly good job even given where she started, but you never know that about a person until they get to sit in the big chair.
Joking or not - it would be a great move by Google to install her as Yahoo's CEO, drive down the worth of the company, and gather up the ashes for a cheap price.
If you look at the composition of that board, they were actually the same people on both. So I guess blame Microsoft board/blame Nokia board are both accurate as it's one and the same.
There's enough blame to go around, and ultimately the most to blame was the board. However, Microsoft did play a big role in trying to convince Nokia to get their former VP as their CEO, which was their long con into getting Nokia to adopt Windows Phone, because Microsoft thought a company such as Nokia could surely turn WP's fortunes around.
But yes, Nokia itself was most to blame for its failure to "pee in its pants" and adopt Android when it still had 2x Samsung's market share in phones.
The blame for Nokia is complex, but as others have pointed out, there's no lack of blame to assign. Plenty of villains, and some super-villains. Tomi Ahonen's blog has a point of view, but it also goes into greater depth than most coverage of the tragedy at Nokia. I'd recommend it if you want to know what a former insider from the glory days of Nokia thinks.
I did not read jedmeyers comment as blaming Microsoft for the collapse of Nokia, I read it as pointing out how little value that corpse has to them, murder or not.
Nokia was speeding toward an iceberg before Elop was involved.
The prior Nokia leadership openly mocked the iPhone as a non-threat, and then the company got destroyed by what it represented. Their arrogance was integral in Nokia's suicide.
The only thing you'd ever need to know about Nokia's downfall is represented in this graphic:
"Shares of Nokia Corp. fell as much as 10%" ... "Nokia Chief Executive Olli-Pekka Kallasvuo on Thursday brushed off suggestions that Nokia needs to do more to fight back the foray of iPhone onto its home turf, calling it a ‘niche product."
But maybe she did a great job responding to the crises and swerved the ship in the right direction, out of harms way, but just not enough to prevent the crash. Maybe she did a better job than many others would have done. What would you expect them to do... give up?
I don't understand the engineer comparison at all. Every person in her role adopts much more responsibility, takes on a huge risk of failure that can be career ending and they can face a media frenzy that attempts to bash them into the ground. Why would anyone try to compare her salary to an engineers?
Bleeding a failing company dry with a huge comp package is the complete opposite of taking responsibility. If Mayer stood to lose $300MM of her own money (i.e., money that she had before she joined Yahoo), then we could talk about leadership with consequences.
The comment has context. So read: adopts much more responsibility than an engineer. On a day by day basis she makes decisions that have a more significant impact. She has to cover much more territory for understanding aspects over the whole organization.
Her severance would be due to a sale. There are lots of regular employees that get severance packages when they're let go due to a sale.
What's her severance in proportion to her annual salary along with tenure? The norm for my area/role, as an engineer, is 4 weeks per year of service. So 6 years would get me half a years salary, but you know what - it's only two weeks per year for "lesser" roles in my company such as support.
I agree they are paid generously and even overpaid, but they deserve to be paid more than an engineer. How much is debatable, but that's really established by the market. I just don't get the engineer comparison.
It isn't really, tho. It's established by the compensation committee that is convened by the board and comprises of board members.
Starboard bitched about the compensation committee since it only had 2 members on it, and they were favorable to Mayer (giving her credit for what is effectively a rise in Alibaba).
Starboard got 3 of it's own board members onto that committee now, so the fun times are over.
The conflict of interest in the process has always been that you have your own board members, some of whom you bought into the board, deciding compensation. A lot of these directors are themselves the subject of compensation committees at other public companies - so there is a quid pro quo amongst those who serve on each others boards.
It takes an outside activist investor to break up these friendly and circular compensation cliques.
I like Mayer, but it is really difficult to justify these compensation packages when the core business she is running is performing so poorly. I don't think many people would have any problem with her earnings hundreds of millions of dollars - but only as a portion of gains made by rescuing Yahoo's decline.
I agree people should get rewarded for performance and that there are people often taking advantage, but still the entire ballpark area of pay that she gets is guided by market comparisons. There are other comparable compensation packages out there, she's just getting hammered for hers because of the fall. I don't think it's uncommon for failures to result in compensation packages that cause a public outcry.
If they get sued then potentially yes. Think about Fred Goodwin, ex leader at RBS. https://en.wikipedia.org/wiki/Fred_Goodwin
I think there are legal cases coming against him that would need to be paid for, and it is questionable who pays those fees.
Fred Goodwin didn't fall on hard times. He seems to have been directly responsible for some very questionable dealings.
But the bottom line problem with CEO pay is that you get a huge pay packet just for getting out of bed, no matter how badly you do; pay is completely decoupled from performance.
When Leo Apotheker was at HP for just under a year he received $13m in comp, severance of $7.2m, shares worth $3.56m, and a performance bonus of $2.4m - all while losing $30bn in value.
Developers like to speculate about 10X programmers. But ahere's no industry acknowledgement at all that the 0.001X CEO or manager is a real phenomenon. Anyone working at that level seems to be completely protected from business consequences.
I'm not sure how it works; does that insurance still cover you after the event? And if you have made a stupid mistake(not defending or even giving a view about Fred here) you are personally liable, aren't you?
If you are referring to engineers getting let go in a sale, I would guess that many senior level or higher engineer would get 2-3x salary on the way out the door due to things like accelerated stock vesting plus 60 day WARN act plus a separation package.
I don't know the details, as I'm not a Yahoo employee, but it's not uncommon for that to be the case.
You are not qualified to judge what others deserve. Steph Curry's net worth is $44M and I don't think anybody deserves $44networth for being good at throwing balls through hoops.
But it is market that often determines these numbers and we simply do not possess the information to look at all those variables.
You are not qualified to tell others to not to judge what yet others deserve. Everybody is entitled to (and must) have a opinion and judgment on such issues. Having an opinion is an important function of education and it's an indicator too.
It's altogether different point what market gives to that person. Market generally rewards anyone irrespective of their actual merits, because market works on apparent merits and anyone good at selling themselves succeed.
Ponzi was a very good example of how markets work. [1]
Yahoo as well might have allowed itself to get "ponzied". That's their foolishness and they are paying its price.
Advertisers are notoriously poor at proving ROI, so you could be right in your assessment of his worth to them. Anyway, if putting a ball through a hoop was a bankable skill, this guy would be a billionaire: https://www.youtube.com/watch?v=oG_DQXEK764
Yep. To be one of the best at throwing balls through hoops is no small feat, and the market has shown that lots of people will buy tickets and merchandise as a result. Therefore he's worth the $.
Yes, but what happens to his salary if he stops performing individually? Does he get a huge bonus if he blows his ACL? Does he get a huge bonus if the team loses in the first round?
The downside protection afforded to CEOs is ridiculous - heads I win, tails you lose.
Corporations constantly decide what people deserve. They also have mechanisms for deciding if a high value deal is risky, unnecessary, or poor value for money. Because those rules are flouted when hiring CEO's a huge amount of risk is created. That threat (of a bad CEO) is mitigated by trying to hire and retain "the best", and consequentially the most expensive. It all makes sense because they have you over a barrel.
The problem is that companies are over reliant on a single leadership figure. This makes little sense in large companies with lots of complex divisions and interests. Does it really make sense to rely on a single person to guide the company?
I don't understand what point you're trying to make with this comment. I don't see anyone here attacking her, in fact only in the article does anyone bring up her specific performance.
In fact you seem to be saying she did not do a good job yourself as you put this defense of "ceo can't do much and this ceo had bad luck"
So what has she done to earn $55 million dollars? Without attacking anything about her personally, in the role of her job, did she do a good or bad job? I think a bad job or at most neutral job. In fact in writing this comment I looked at her bio and I came away really impressed, but at the same time Yahoos stack ranking wasn't popular, Tumblr I think was a fail move. Do I think anyone could have done a better job then her? I don't know...digital ad sales is huge but as a single person I don't know how much impact you can have.
Could they not have found someone else to go down with the ship for less then $55 million (say $5 million) or is 50 million just so little money for a large company like Yahoo that people who offer hire ceo just don't give a fuck about the difference between the two numbers.
Unless they've publicly choked a puppy to death or donated to right-wingers exclusively, anyone who advances the current Zeitgeist is not going to be judged too harshly, especially since Yahoo was already in deep trouble and her only sin appears to be she isn't their savior.
When they published the new logo design of Yahoo I came to the same conclusion. A stunningly professional answer to the wrong question. Mayer might be - and I emphasise "might", as I don't know enough about her - the archetype of the engineer who executes the wrong programme without flaw.
> Pretty sure that anyone could sit on a pile of Alibaba stock and just do nothing, and come out ahead of where Yahoo is today.
No. You're not privy to the details. Neither am I. It's easy to discount someone for a public failing, but imagine yourself in her shoes. Unless you're a bored corporate exec of a Fortune 500 company, I highly doubt you have the management and financial acumen to keep Yahoo! afloat.
> Pretty sure that anyone could sit on a pile of Alibaba stock and just do nothing, and come out ahead of where Yahoo is today.
I'm willing to stipulate this. It's worth pointing out that it's usually very difficult for people in highly politicized roles to just sit and do nothing, even when that's obviously the right thing to do and they would personally like nothing more.
Also, it wouldn't have been at all obvious at the time that doing nothing had a mentionable chance of ending better than sincere efforts to guide the company.
Ehhh... when over 100% of your company's value is in cashlike financial instruments that it owns, it should be obvious that there's a chance doing nothing will pay better than trying to do something. The size of that chance may not be obvious, but the presence should be.
Personally, I have been thinking for a very long time that any investment in Yahoo was an indication of a very special mindset. A dotcom bubble reenactment society that part-times as a real company. In that light, the weirdest things can make sense.
> Only about 3.3% of her projected $365 million compensation package is tied to Yahoo performance, and that's the company's annual target bonus of $2 million.
That would make one say that she is way too smart. Competence is another thing.
I think they fucked around too long in hiring her, to the point where even people who initially supported Product-Led-Yahoo would have preferred to keep the Media-Led-Yahoo of Ross Levinsohn.
Personally, I think it was obvious what Yahoo! should have done, at least from ~2005 onward: become a brand/site for a specific cohort of people as they moved through life. No young people use Yahoo!, nor should they be pursued; just have Yahoo! provide an evolving set of products for their existing userbase. Yahoo! might have gone back even more and taken the even-older-people market who were on AOL still, or found other sites targeting 50-80 year olds vs. Yahoo!'s core 40-50 market.
Buying Tumblr (which I dislike, personally; maybe too "young" for me?) was Mayer's dumb move. Everything else was either good or benign.
Building decent mobile apps, maybe a mobile platform or other platform, etc. around existing Yahoo! services to support old Yahoo! users would make sense.
My other strategy would be: Yahoo! for rural/small-town/etc. people in the US, and Yahoo! for black (older; not youth culture/urban culture, but middle class older black people), hispanic middle aged/family/etc., or other minority groups outside the mainstream. Yahoo! for black people, with an HQ in Detroit, Atlanta, New Orleans, Houston, etc., and Yahoo! Lat Am in South/Central America (and/or Miami) would be a way to move forward with new-to-Yahoo! people. Don't go after the silicon valley tech crowd (hyper competitive, tech based); a media strategy around other groups would have been viable. (and still might be)
Mayer was totally the wrong person for that strategy. Oprah Winfrey would be the ideal "Yahoo! for black middle-aged people" leader; I'm sure there were other people.
(My first move if I bought Yahoo! today would be to relocate the headquarters to either the midwest or Atlanta; anywhere but SFBA. Las Vegas might even work, but somewhere like Branson or St. Louis would make sense. Also makes it easier to do the mass layoffs. The Bay would be full of purple blood, unfortunately.)
Geocities was shuttered before "young people" today started using the Internet (and was dying for years before that). I also doubt most 0-22 year olds today ever played Yahoo! Chess or Yahoo! games -- they were popular with people my age and slightly younger, about a decade ago.
Tumblr was an acquisition, and a very expensive one, which would not have been made by non-Mayer person following my strategy. Young people do not, generally, use Flickr (at least in the US); they use Instagram or Vine/etc.
(In 2005, what Yahoo! should have done was different than what Yahoo! should have done in 2013 -- in 2005, it still had a reasonable array of options. By 2013, the olds strategy was probably the most viable operating strategy, although even then, massive cost cutting and redistribution of Alibaba winnings to shareholders might have been the most preferred outcome.)
> Geocities was shuttered before "young people" today started using the Internet (and was dying for years before that).
Yeah. Because young people in 2005 are now like 20 to 30 somethings today. That was 11 years ago man. A 35 year old today who was really into Geocities back in its prime was a 24-year old young person (although Geocities prime was really closer to early 2001 or 2002).
In any case, I fondly remember the awful Neopet communities with awful gifs and everything that I used to browse on Geocities. Anyone remember "Webrings" ??
Now I admit, 2005ish was when Xanga and MySpace started to take over (Facebook was a "college" thing, and not really relevant to high-schoolers at that time). But Geocities was still relevant at that time.
Yahoo! Chess was really fun back in 2005. Lots of blitz games and trolling sore losers who lost won positions on time. These days chess sites are too civilized to be fun.
Being a brand for a specific cohort is a slow-death strategy, not a growth strategy. I don't think many people invested in Yahoo would prefer that to a high-risk strategy with a plausible upside.
That age cohort doesn't have the same Internet penetration as 20-30 year olds today. Even if boomers are declining in numbers now due to death, you can get a larger percentage of boomers on the Internet, and they can make more use of it.
(The racial/ethnic minority markets, especially older people, are also dramatically under-saturated, so there's a huge amount of growth opportunity there.)
And at some point slow-death while maximizing profits from each user actually is the right strategy for a business. I suspect Netflix DVD-by-mail business is largely operating on that model now.
For the money they paid her she should have been much more lucky. Race horses aren't applauded for their competence, elegant walks and good looks. They need to win.
If one has great success once, it's possibly luck. When it's 3 times, there's something else going on. Jobs did it 3 times (Apple, Pixar, Apple again). Gates also did it 3 times (microcomputer BASIC, DOS, and 32 bit Windows).
Is Amazon's success due to Bezos or luck? I prefer to bet on Bezos rather than luck.
In retrospect I'm not sure she placed the exclamation mark at the right degree of whimsy at all. 3 degrees left and Yahoo would be in a very different place right now
I don't disregard the "Luck" Factor but in that case I think it boils down to how many steps you take to fix the situation. I think in the timeframe, it should have been possible to take more steps to make Yahoo a focused business. It does seem Tumblr acquisition was step in that direction but sadly, it lost its charm similar to Yahoo's past acquisitions.
This story is being misreported, a little. Here is Yahoo justifying her compensation in their latest annual filing:
> It’s important to understand that Ms. Mayer’s performance-based equity award values in the Summary Compensation Table reflect the significant appreciation in our stock price between when the awards were originally approved by the Compensation Committee and when the applicable annual performance goals were subsequently set (the accounting measurement date). For example, our stock price increased 178 percent between July 16, 2012 (the date on which Ms. Mayer’s recruitment awards were originally approved) and March 6, 2015 (the date on which the recruitment option’s 2015 tranche was valued for reporting purposes). That option tranche had an original approval value of $3 million in 2012, and a reported value of nearly $20 million in 2015, due to our intervening stock price appreciation (which benefits executives and shareholders alike).
The exercise price of the options is not lower than the stock price on the day the options/RSU's were awarded
You could argue that the scheme was poorly designed since she is being rewarded for the performance of BABA, rather than the performance of YHOO.
The second part is that the severance pay portion is only paid out if Mayer is fired after a change of control event on the main entity. This excludes the sale of Yahoo internet assets that are currently being negotiated, but takes effect if there is a takeover of the main entity.
It looks more like a poison pill, or insurance from being fired too early for Mayer, rather compensation that is intended to be paid.
In related news, Yahoo just finished up a long battle with Starboard (who got 4 new members onto the board - including 3 onto the compensation committee (which is now at 5)) who took issue with compensation - but I don't think there is much they can do right now.
I chalk it up to the fact that everyone here believes they are going to be the CEO of their own multi-billion dollar startup, and when that happens, they want their own $100M/yr pay package as well.
But they absolutely took it from me when they are being paid by a publicly traded company.
I am more convinced every day that the marginal income tax above a certain limit (my proposal is 100 * 2000 * minimum wage per hour, I'm willing to go lower to build consensus) above which the income shall be taxed at 90% of the additional income. It is the right thing to do. I want companies to go to the executives and say "look, it costs us too much to give you any more money. Please try to cooperate."
I don't know how a small investor or an individual with a retirement plan can do that. Corporations accepted the controls when they decided to play in the big kids pool.
I understand not every decision can be made in a centralized manner but I think a progressive personal income tax is the right thing to do.
And then there are people with basic intelligence that understand that, basically, yes they take that money from the rest of the people. You know, mostly because money doesn't grow on trees.
When a certain part of economy inflates some other part deflates. And that other part might be more important than unicorn companies that are pure bubbles full of hot air offering exaclty 0 in the society.
I hope you cheerlead with a lot of gusto for the golden boys. After all they didn't take money out of your pockets? Right? Right???
"Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires." - Ronald Wright
I always thought this quote was a great example of "those poor people are too stupid to figure out what's good for them. No worries, i'm smart enough to know what's best"
What a strange question. I've been poor for more than one period of my life. And I've had differing ideologies at differing periods, including both full-blown objectivist libertarian and full-blown ban-money communist. I can tell you though that it has nothing to do with ideology, and more about getting to a basic standard of living. The government of the US is extremely corrupted and wasteful, and unable to support this standard of living for many, and the propaganda fed to the public, poor or not, is meant to convince people otherwise. Poor people in China believe the country should go back to full communism. Plenty of poor in the US believe that the country should deregulate as much as possible. What do you think causes this difference in opinion? Could it be genetic? Or perhaps it's the ideas they are fed through the education system and top-down controlled media.
I think every major company has three management stages: creators, maintainers, and mooches.
The creators are the ones who bring things to life and redefine or create markets. There are very few of these people and they're often hard to work with because their very mindset requires them to ignore the rules. Elon Musk and Steve Jobs fall into this category.
The managers are the ones who can take something that exists, refine and grow it, and provide stability over a longer run. They tend to be rule followers and understand "the formula" and how it works. They may occasionally have those "creator" flashes and make a leap but that's not their purpose or goal.
Finally are the mooches. They know the rules and go through the motions so they're easily mistaken for the "maintainer" types but they're not there to promote stability. They want to get their piece of the pie and move on.. like locusts.
I always laugh at this because there are only room for so many $100M/yr people in this world, at least until technology takes another huge leap forward. But more importantly until that happens, I think we probably have all the ones we can handle, or at least the majority...
I see it as defending the free market economy. I don't think any of them deserve hundred million dollar pay checks, but really the supply/demand of talented CEOs is so out of whack that the pay scales have ballooned. Welcome to capitalism. What I don't understand is why this general problem with CEO pay has to degrade into targeted Mayer bashing.
CEO pay has little to do with the free market and everything to do with the principle-agent problem.
In 1983 the average CEO was paid wages equal to 50 average employees. Today the ratio is over 300:1.
If this is the free market at work then our economy and society is doing something profoundly wrong to produce such an enormous shortfall in qualified CEOs. Clearly we need to identify what's wrong with our upper classes that they no longer seem to be able to produce qualified senior-executives. Maybe they're being educated improperly? Perhaps social problems endemic to that type of person can explain the executive skills gap? In the meantime, at the very least, we need to have a temporary guest worker program to ensure our companies aren't crippled by senior executive shortages.
The government failed to do its job since 197x. The growing income disparity is the result of free market let run completely free by the government. It is the basic example from statistics 101 - in completely symmetric odds situation that thus looks fair at first ("free market"), the player with deepest pockets wins with higher probability. The government by not increasing minimum wage provided for much significant disparity between the "depth of pockets" and thus the resulting increasing income gap.
I see it as defending an "old boys club(now including women!)" who sit on tons of overlapping boards and conspire to "keep it in the family" and "reward" the "successful" businessperson.
The reality is that CEO pay isn't based on performance. its based on some bizarre dance done in the highest boardrooms designed to extract the most wealth possible for the 2 - 5 years someone is CEO regardless of how they run the company.
The dynamic seems to be a) if things are bad, we need to pay top dollar to keep valuable executive talent to fix it, and b) if things are good, we should shower rewards on the executives who made it happen. Heads I win, tails you lose. It's a nice place to be.
Welcome to corporate America. I agree with you, but the people on this forum are not writing comments defending the old boys club when they suggest her pay is not abnormal in the market. If we want to change these things it requires changes in government and regulation so we need to lobby for that change.
you "dont understand" why the chief executive of a company should be targeted with criticism based on how said company performed ? So they should just get paid and not have any responsibilities whatsoever ?
That doesn't mean you can't have an opinion on it.
And I'd wager it does have something to do with many people. CEO salary increases don't happen in a bubble - there has been an unprecedented increase in them while income growth in the middle class has stagnated horribly.
> CEO salary increases don't happen in a bubble - there has been an unprecedented increase in them while income growth in the middle class has stagnated horribly.
Since you bring up stagnating wages, it sounds like you are suggesting that the reason middle class workers aren't being paid more is because the money is going to bigger CEO pay. Do you think that if the CEO was paid less, then that money would go to the workers? Because it wouldn't, it would go towards higher profits for the company and so more money for the shareholders. The shareholders, who ultimately decide how much the CEO gets paid.
This is the problem some of us have with debates about CEO compensation. It ultimately boils down to complaining about how people choose to spend their own money.
Blame globalization for that, not absurd CEO pay. There are now many people that are willing to do what were blue collar and middle class jobs for much, much less, and they'll do it just as well. There are fewer and fewer natural reasons for companies to pay US workers the premium they command.
At least partly because it's a very rare and specialized skillset - you basically have to have run large divisions in large companies or other large organizations, or been the CEO of a smaller company to be considered for the top spot at one of the large companies that pay these outlandish sums.
A good CEO can be worth an incredible amount of money to a large company, which is why they command such amazing pay. Just think, how much is it worth to Apple to have Steve Jobs as CEO vs. someone else? His leadership helped add hundreds of billions of dollars to their market cap. Naturally, the owners of the company are going to be willing to pay him a lot to help keep his interest.
CEOs are a popular scapegoat because they're easy to identify and their rewards are outsized, but they're not the actual problem, and it's counterproductive to focus on their compensation.
My own and many other pension plans will have bought into many of these companies. We are all indirect stockholders.
The success and failure (including how poor performing CEO's are remunerated) of top companies directly impacts my finances and indirectly affects my business enviroment and direction of the country.
Not to mention simple freedom of speech around a public company.
Yes, it does have something to do with me. And yes, I will have an opinion.
Everything exists in society. If that's the filter you'd like to use, then be prepared for the gov't having a lot more say about how you run your life.
The pool of people who are capable of leading a company the size of Yahoo isn't that big to begin with.
Add to that the fact that Yahoo had a recent serial history of hiring then firing CEOs before they brought in Mayer, and the pool of potential people to fill the spot shrinks again.
Yahoo had no pathway to success and was likely to fail spectacularly - especially given the way the board was behaving - which signified to any potential hire that it might be their last job. The pool of potential CEOs shrinks again.
Of course the incoming CEO would negotiate a well-beyond-market severance package. They shouldn't even want to hire someone who didn't have the foresight to do so.
This is a common argument used to justify these golden parachutes. While you may be right in the context of the current system, you completely ignore the fact that the current system is seriously broken.
I'm going to point out the obvious: that perhaps the problem is that _we think it's a good idea to have companies like Yahoo in the first place_.
Sprawling, disjoint, unfocused, patchwork... these descriptions comes to mind, and they apply as much to Google, whose rise and slip from clarity of purpose and mission is eerily similar in contour to those of us who remember when Yahoo was All That.
This bubble's obsession with unicorns is a fine example of an emergent system marshaling unbelievably vast resources in the service of perversely petty and frivolous aims.
The "elite" are not actually elite, they are just a wealthy mediocrity. Much more capable people than Meyer are likely sitting around in a cubicle right now, but due to their lack of 'correct' connections/pedigree/experience they will never have even 1/100th the opportunity as Meyer.
If you're on the board of directors for a billion dollar search engine, who do you hire as CEO? A guy in a cubicle, or a Stanford grad who was employee #20 at google that spent a career in charge of Search, User Experience, and Location?
You're acting like they just hired Paris Hilton off the street, when the reality is that she busted her ass her entire career in a field that few women have had major success in.
The last CEO to hold onto the job at Yahoo as long as Mayer has is Terry Semel, and he got booted in 2007.
I happen to think that class division will become more severe and irresistible, because I think that in a generally free economic game, advantage begets advantage, and disadvantage begets disadvantage.
In Santa Clara county the odds of going from the lowest of income earners to the highest are better than anywhere else in the world.
There's nepotism all over silicon valley, but there's also a strong respect for brains and the ability to get things done.
If you want your kids to have a better life than you did, a free market capitalist economy is where you want to be. If you want to maintain your family's position of power and wealth, you want to be somewhere else.
Saying the odds are better is akin to saying that your odds of winning Powerball improve _dramatically_ when you by twenty tickets instead of one.
Executive pay is what it is because the system is very, very broken.
The manners in which it has been systemically broken and remains broken through the collusion of the infinitesimally small number of people occupying the roles of winner are well documented, indeed, they are trivial to enumerate.
I'll say it again. In the future, that we let these systems degrade to this point will be viewed with horror, and the same sort of moral incomprehension that we now claim to hold with respect to slavery and every other human failing.
I hope my children see the day. If they don't it's because things have continued to slide in the other direction, which means things are going to live in a nightmare.
Marissa was the 5th Yahoo CEO between 2011 and 2012. Yahoo had a habit of hiring CEOs and then firing before they had a chance to make progress.
She didn't want to be fired 6 months into the job. Yahoo is a big ship, and Marissa wanted time to turn it around and see results. I assume she negotiated a large severance pay not as a way of making lots of money, but rather to incentive the board to give her a chance.
Marissa is the 7th ever Yahoo CEO, not the fifth CEO in a one year window. There was a lot of turnover in the 2011-2012 period, but it's mostly down to Yahoo, and also eBay, failing to do their due diligence with Scott Thompson.
1. 1995 - 2001: Tim Koogle
2. 2001 - 2007: Terry Semel
3. 2007 - 2008: Jerry Yang
4. 2009 - 2011: Carol Bartz
5. 2012 (5mo): Scott Thompson
6. 2012 (3mo): Ross Levinsohn (interim)
7. 2012 - now: Marissa Mayer
-> I assume she negotiated a large severance pay not as a way of making lots of money, but rather to incentive the board to give her a chance.
The game theorist in me says this is probably correct. I suppose it would be helpful to think of severance pay as a hedge against the downside risk of failure. Still, it does sound kind of awful that she'll get this much money with the company itself having, essentially, negative value.
If the other player accepts your poison pill, then you should reconsider its effectiveness. The only rational conclusion you could draw from such a move would be "Gee, they're willing to spend at least 55 million to fire and hire as they please."
The thing that really baffles me is that she will be hired by another company after this for similar comp. Either that, or she'll make a credible run at political office. It's amazing how little America holds these people to account for poor performance. It literally does not matter how well they do in their job.
When she was hired I asked (and what I imagined she probably would've asked), what is Yahoo!'s business model, how much fierce is the compeition, and how willing it is to seek other markets (that can serve as low hanging fruit).
I see tech companies business models (very broadly) as being one of a few kinds:
- serving masses and revenue-through-ads (the social media model)
- serving masses and selling a product
- serving big businesses
it looks like Yahoo! was in the first category at that time and there was already market monopoly by Google, Facebook, Twitter, and so on. So continuing what they were doing already but better meant taking those companies head on, and that was an uphill battle.
So I was of the opinion that the best way forward IMO would be to seek new markets and low hanging fruit, maybe explore creating a product, maybe get into hardware, maybe serve big businesses.
Over the years I never heard Yahoo! do something radical, or go into a new direction, or even seek some safe investment. I might not be fully-informed though, but if that's really the case then the CEO is clearly to be blamed for it. So TBH I'm not surprised Yahoo! is still not doing well and has to be sold.
Looking for corrections/more-info/thoughts in response to my comment. Thanks!
I guess I will never understand the business model employed by most large companies that involves paying executives such enormous sums, even in cases where the leadership failed (I say this in general, not because I think Mayer failed). It seems there is a big disconnect between performance and compensation when you get to a certain level of leadership.
At that level, in general, boards pay CEOs that much money to leave, because the cost of them staying on to the shareholders is often many times more. The severance usually sounds like a lot compared to what you or I make, which is why it gets such bad headlines, but compared to the often billions of dollars it could cost shareholders to retain a bad CEO instead of finding a new one; it's a no brainer.
Wouldn't it be cheaper to fire her and not give her an insane severance package?
Have the "elite" somehow made it illegal to get rid of them without multi-million dollar packages? Or is this just an example of, we do it because it's always been done this way?
I still don't understand that logic. What does choosing to fire someone have to do with whether or not you pay them a ridiculous severance? Are you suggesting that it is impossible to fire a CEO without giving them an absurd amount of money?
Executive pay is something I haven't heard convincing arguments about. It's obviously gone up a lot in recent decades, why?
The incentives seem to be of the heads-I-tail-you-lose variety, for all the complex performance pay that it is nominally made up of. Most arguments you do hear seem to apply equally in 1950 or 1980, so why the trend?
The common sense argument that a CEO is so impactful on a company so big, that CEO pay is always worth it inasmuch as it has any kind of meaningful effect on performance. 3% improvement in Yahoo's value is $1bn and you'd imagine the 1st choice CEO is worth at least 3% more that the 2nd. I reckon that kind of thinking plays a big role here.
This kind of money, and the way so many of these packages seem to come with weird ways (eg severance pay) to add 7, 8, 9 figure sums in certain cases seems dangerous. Self interest is naked once these sums are in play and the room for cynical, self interested choices is very wide for a CEO.
What I find amazing is that Mayer failed to articulate any real strategy for how Yahoo was going to succeed in the future. To me, that was her only job - get in, and find a way for Yahoo to move forward. Then execute on that strategy (hiring/firing/acquisition/etc).
She was too indecisive, shifted gears too often, and tried to take too many pages from her past employers.
She did everything a good executive should not do. She tried to acquire her way to growth when she couldn't stabilize the core business. She hired consultants to reaffirm things she already knew, and she spent lavishly on silly things. She was a great middle manager who was never going to be a good CEO.
Maybe someone here can explain but why would another large company such as Verizon want to buy dying brands such as AOL and Yahoo? The user base of such sites is drying up. They could be replaced by Google tomorrow if people just stopped using them and went elsewhere for the same information and services. The brands themselves are losing value everyday as a new generation grows up without ever knowing what they were.
Someone explained this to me recently with a simple analogy that may be helpful to you as well. Suppose the average user of AOL is 50 years old and non technical. That person has a decent amount of purchasing power and is likely to not significantly change their purchasing habits over the next 20 years. So there's a high chance of vendor lock-in and value capture even if there is actually no technological progress to speak of.
Yahoo's finance site is far, far ahead of any other that I've tried. I'll be sorry to see that go. When I try another site I feel like grabbing the collar of its developers and demanding to know what is wrong with them.
Agree - Also, I think every 'program some finance stuff yourself' tutorial and online course ever has been built starting with pulling data from Yahoo finance.
To be fair, they WERE early adopters, that's how they ended up on Yahoo in the first place. It's the GMail crowd who showed up late, when everyone was getting webmail.
I was an active Internet user before/during Yahoo!'s rise -- it was NEVER the choice of technical early-adopters. (Flickr kinda was, as an acquisition, in a narrow space)
It was always the kinda-dowdy boring brand for non-technical people. Even at the very beginning it wasn't even the go-to link list for smart/knowledgeable people. Yahoo! Mail was for people who were too unresourced to have their own mail accounts or maintain university/work/etc. accounts.
... But who had dial-up. Seriously, same with AOL. 99% of people had never even heard of the Internet until the late-90s. As much as we disparage them now, they really were ahead of the crowd back then.
Can someone give an example of a similar situation where the CEO was male? Ie an outsider brought in to save a big tech company that looked doomed and indeed was.
Jack Dorsey is almost that, but he had previous involvement at the top of Twitter so maybe not quite the same thing.
The reason I ask is I think Marissa has received an awful lot of particularly aggressive criticism, and it'd be interesting to see if men in her situation receive the same treatment from HN, the tech press, etc.
It would be interesting to find a good comparison.
Considering most CEOs are male by far, I'm sure there are dozens of cases historically where it's happened. This isn't the first time a company has been failing and they fire the CEO and hire someone else, only to fail in the end anyways.
Well, I didn't down vote you because I didn't think it was a terrible question. I am not well versed in business CEO history though, so I can't point out specific examples. I just was saying that given the thousands and thousands of businesses that have existed in history, this situation isn't unique.
I also am not sure how you'd distinguish she was getting criticized due to her gender as opposed to it just being an extremely iconic company from internet history that has steadily gone down the tubes. It's a bad situation and tons of people have lost their jobs, I'm not sure how one could speculate accurately that the criticisms are because she's female vs. the other dozens of issues.
If you could find an example of a guy in a similar situation who has received a similar level of criticism, then I think you could at least conclude that gender wasn't the primary factor in motivating criticism.
If you couldn't find an example, then not much could be concluded.
Last decade? In tech? That's more of a head scratcher...
Scully and then Amelio @ Apple? Fiorina @ HP, certainly after Eckhard Pfeiffer screwed the pooch at Compaq. C. Edward Acker after Sewell screwed up at Pan Am. Kay Whitmore at Kodak.
Edison was a horrible CEO; but of the many companies he founded, the only one that survives is the one that fired him early on. No one every hired him to be a turn-around person.
Turn arounds are hard. The company falters. New person brought in. That person fumbles. Yet another new person. Company recovers. If the company doesn't recover - you probably haven't heard of them.
I was hoping Yahoo would've went private like Dell. So that she'd have the time to turn the company around. She did a great job improving the tech behind their company but...Yahoo was like a 1960's abandoned nuclear silo. To reinvent their company it would be costly and with stock pressures, they weren't able to do the impossible.
I personally hope YellowPages buys out Yahoo, I think they'd be able to best handle the transition to making Yahoo change into what it needs to be.
You call it destroyed she will put on her resume she doubled the stock price and found a successful acquisition of the company with a complimentary partner.
She is "rich" by any reasonable standard -- I assume her net worth is in the hundreds of millions of dollars. She could presumably self-fund a reasonable company for years without affecting her assets substantially. (There may be other reasons why she won't or can't do it, but $5-10mm isn't one of them.)
“My proceeds from the PayPal acquisition were $180 million. I put $100 million in SpaceX, $70m in Tesla, and $10m in Solar City. I had to borrow money for rent.”
I hope she'd spend some time raising her kid(s). Unless her husband is doing it all. Especially while they are young -- it's so amazing for all involved.
I know it's been asked before, but is there a critical function Yahoo! serves right now that would have to be replicated immediately if they went away? I honestly cannot think of anything that couldn't be reproduced by other tech and media companies rather quickly.
Disclaimer: I use no Yahoo! products other than Yahoo! Fantasy Sports for fantasy hockey.
Most don't realize it but Yahoo Small Business and their storefront/hosting efforts generate a lot of revenue for them. But most of their revenue is from ads.
Yahoo already indicated that they don't care about that product. It was their pick to get spun off along with the Alibaba stock as Aabaco: https://www.aabacosmallbusiness.com/
Since the actual spinoff seems to have fizzled, Yahoo does still own them, but I can only presume they did serious damage to its user trust by leaving it in this limbo state. They also claimed revenue of $50 million a year when they announced the spinoff, which is not exactly big money for a place Yahoo's size.
Every journalist who reports on what they believe to be excessive executive compensation (or even what they believe to be shareholder-friendly pay) should be clearly identifying (a) the members and Chair of the Board's Compensation Committee, and (b) the Board's Compensation Consultant. Although the whole Board is responsible for CEO pay, the Compensation Committee and the Board's compensation consultant are primarily decision-makers and influencers, respectively.
In Yahoo's case, Maynard Webb, Jr. is Chairman of the Board and member of the Compensation Committee. Jane Shaw (Intel) is Chair of the Compensation Committee. And Fred Cook is the Board's Compensation Consultant. Regardless of whether you think her package excessive or reasonable, these are the people who ought to receive credit or blame.
So she lasted like 4 years before the company failed? Somehow I don't feel particularly sorry for her with $55M in the bank from that job. How obscene.
I hope Google buys Yahoo and makes something out of the pieces that are somewhat valuable. Like for example, Yahoo mail is somewhat good and widely used, but can be made a lot better by Google moving that into the Gmail platform.
This is just about signalling. You negotiate a package to signal your value, and the severance signals your value to the next company that will hire you. As a counterpoint, if she offered to run yahoo for free, there is no way they would have offered her the position.
Highly doubt that any corporation would hire her as CEO after Yahoo. I'm not blaming her for the mess it was in when she joined and she did OK, but lots and lots of talented people can be an OK CEO.
People seem to forget that companies compete for CEOs. If you want someone to be your CEO, you need to pay a very high salary regardless of how your company is doing.
What is the thing they are competing for? There's a whole lot more people than there are CEOs, so it seems you need more explanation than If you want someone to be your CEO, you need to pay a very high salary regardless of how your company is doing.
I think they don't particularly know what they are competing for and that this works out nicely for CEOs. Obviously there are people that can add a great deal of value to certain situations. I don't think there is a good method of identifying them. If there was such a method, pay would be lower (or we'd have many more great companies).
They are competing for people to run their company? Relevant experience and skill set? Just like any other job?
My point is, if you have two companies, A and B. A is on a downward slope for the past few years and needs a turnaround. Company B is on the uphill slope and is going to be a unicorn.
Just because Company A is doing poorly, doesn't mean they can pay their CEO less. Why? Because the potential hires could always just go to Company B.
Personal attacks aren't allowed on HN, let alone ones as disgusting as this. You also have a history of posting uncivil comments to HN. Normally those two things would mean we'd ban you, but because your comments have been substantive and (mostly) civil lately, we won't. But please don't do it again.
> The basic message of Built to Last and other similar books is that good managerial practices can be identified and that good practices will be rewarded by good results. Both messages are overstated. The comparison of firms that have been more or less successful is to a significant extent a comparison between firms that have been more or less lucky.
> Because luck plays a large role, the quality of leadership and management practices cannot be inferred reliably from observations of success. And even if you had perfect foreknowledge that a CEO has brilliant vision and extraordinary competence, you still would be unable to predict how the company will perform with much better accuracy than the flip of a coin. On average, the gap in corporate profitability and stock returns between the outstanding firms and the less successful firms studied in Built to Last shrank to almost nothing in the period following the study. The average profitability of the companies identified in the famous In Search of Excellence dropped sharply as well within a short time. A study of Fortune’s “Most Admired Companies” finds that over a twenty-year period, the firms with the worst ratings went on to earn much higher stock returns than the most admired firms.
Mayer wasn't lucky. But I bet she's far more competent than most of us.