4 ms·

Devils advocate: you have to pay a top exec more if the company looks like its main product is in decline. Plus 2.4m/year isn't crazy in the scheme of tech sala

Devils advocate: you have to pay a top exec more if the company looks like its main product is in decline. Plus 2.4m/year isn't crazy in the scheme of tech salaries - that exec could potentially take other roles that pay even more.

junipertea 6y ago
Why?
- jameskraus 6y ago
  An exec worth millions/year in tech needs decent compensation to take the career risk of steering a declining company.
  - lodovic 6y ago
    Saving a declining company will bring enough revenue for future compensation for the CEO. And who wouldn't hire a CEO that saved a sinking company? On the other hand, if the company still goes belly up, well apparently that CEO wasn't so good after all. So high compensation wasn't needed.
  - doublesCs 6y ago
    This is cartoonishly circular: exec needs millions/year because that's the only way to attract a person worth millions/year.
    - manigandham 6y ago
      Why is that circular? If someone is worth that much then you must pay what they're worth to get them. Whether they need someone that expensive is up to the organization to decide.
      - psychoslave 6y ago
        What are you paying for when you hire someone? "Someone existential wonderful presence", or "someone ability to do something"? What about having a decent base salary, and a bonus of extra millions if your results align with the organization goals?
sadmann1 6y ago
And is this strategy working?
- jameskraus 6y ago
  Eh, I guess we'll see in a few years if things turn around. It's a bit too soon to tell.
Symbiote 6y ago
Alternative: move the HQ and most development to Europe, where these ridiculous salaries are not common (see the example in the article of The Guardian boss), but there is still a strong privacy culture.
- ChuckNorris89 6y ago
  That might work but how often does that happen really? SV companies relocate development but never the top brass to Europe as they would lose their pay, status and network. Believe it or not, just like with dating and real estate, your monetary value is more dependent on where you are rather than how good you are. Shocking, I know.
  - mumblerino 6y ago
    Tell me more about the dating part
thesimon 6y ago
> that exec could potentially take other roles that pay even more If he would do that, maybe better leadership would improve Mozillas situation.
- manigandham 6y ago
  Raising the salary shows that the organization is happy with this leadership.
  - frivoal 6y ago
    No, because the group that decides on raising the salary is not a shareholder meeting or something like that, but the same people who get that salary. See Mozilla's bylaws: https://static.mozilla.com/foundation/documents/mf-bylaws.pdf https://static.mozilla.com/foundation/documents/mf-bylaws.pd...
  - j-pb 6y ago
    No it shows that the leadership is happy with their leadership.
- aeternum 6y ago
  She, looks like Mitchell Baker is back as CEO as of earlier this year.
lightgreen 6y ago
Exec pay is usually tied to some metrics. Like market share or the revenue in case of Mozilla. (In the corporations it is usually done by offering CEO options with nonzero price.) If the company is not performing well, CEO only gets the basic salary (which is higher than engineer salary, but not too large.) When Mitchell was given a raise for no reason, it is a sign of corruption in Mozilla board.
- jameskraus 6y ago
  This really isn't crazy compensation given the role and the industry. There are many execs making orders of magnitude more [0]. I know there is a bit of sticker-shock for people who haven't heard about top-level compensation, but it's not unheard of, just usually unspoken. https://usanewssite.com/news/the-unconventional-ceo-of-33-3-billion-snowflake-which-just-listed-the-largest-software-ipo-in-history-is-already-paid-more-than-the-heads-of-oracle-microsoft-and-salesforce-it/ https://usanewssite.com/news/the-unconventional-ceo-of-33-3-...
  - lightgreen 6y ago
    It is crazy that the compensation is not tied to metrics. If Firefox at least kept the market share, that would be OK.
    - jameskraus 6y ago
      The source doesn't say this isn't tied to metrics. The base salary is only $450k per year [0]. All the rest of the comp is paid out in other ways. I would wager that there are significant compensation thresholds that are tied to metrics (but we, as outsiders, couldn't know what they are or if they are being hit). [0] https://projects.propublica.org/nonprofits/organizations/200097189/201823199349308932/full https://projects.propublica.org/nonprofits/organizations/200...
  - luckylion 6y ago
    > There are many execs making orders of magnitude more For that kind of negative growth? No, of course not. > In its fiscal year ending January 31, 2019, for example, Snowflake had revenue of $96.7 million. A year later that number was $264.7 million, or growth of around 150% at scale.
dvdkon 6y ago
I still don't get why companies pay ridiculous amounts of money to get execs from the outside. Every other role is (mostly) filled via promotions, why should executives be any different? Admittedly, Baker specifically got her role by being "promoted" from a Netscape lawyer and then playing a role in the creation of Mozilla, so my complaint doesn't quite apply. I'd still see letting her go and promoting someone to fill her place as a better alternative to the pay raise.
- LoSboccacc 6y ago
  it depends on the company but usually the administration prefers people whose allegiance goes upward, not downward
drenvuk 6y ago
This is why I like Balmer and Tim Cook. Their fortunes are tied to the success of their companies rather than leeching off of it as it dies. I'd posit that any CEO who is not in a Ride or Die relationship with their company does not have correctly aligned incentives for their performance.
- echelon 6y ago
  Microsoft traded sideways during the Ballmer era.
  - drenvuk 6y ago
    $22 Billion to $77 Billion in annual revenue between when he became CEO to when he stopped in 2013. I think that's pretty decent. I think that it was growth in enterprise that they were successful with.
  - GlennS 6y ago
    Microsoft's share price didn't go up much because they paid out large dividends. If you look at total return people who owned shares in Microsoft did very well. (If you look at a company's share price, you will see a drop roughly equivalent to the dividend per share each time dividends are paid.)

junipertea 6y ago

Why?

jameskraus 6y ago
An exec worth millions/year in tech needs decent compensation to take the career risk of steering a declining company.
- lodovic 6y ago
  Saving a declining company will bring enough revenue for future compensation for the CEO. And who wouldn't hire a CEO that saved a sinking company? On the other hand, if the company still goes belly up, well apparently that CEO wasn't so good after all. So high compensation wasn't needed.
- doublesCs 6y ago
  This is cartoonishly circular: exec needs millions/year because that's the only way to attract a person worth millions/year.
  - manigandham 6y ago
    Why is that circular? If someone is worth that much then you must pay what they're worth to get them. Whether they need someone that expensive is up to the organization to decide.
    - psychoslave 6y ago
      What are you paying for when you hire someone? "Someone existential wonderful presence", or "someone ability to do something"? What about having a decent base salary, and a bonus of extra millions if your results align with the organization goals?

sadmann1 6y ago

And is this strategy working?

jameskraus 6y ago
Eh, I guess we'll see in a few years if things turn around. It's a bit too soon to tell.

Symbiote 6y ago

Alternative: move the HQ and most development to Europe, where these ridiculous salaries are not common (see the example in the article of The Guardian boss), but there is still a strong privacy culture.

ChuckNorris89 6y ago
That might work but how often does that happen really? SV companies relocate development but never the top brass to Europe as they would lose their pay, status and network. Believe it or not, just like with dating and real estate, your monetary value is more dependent on where you are rather than how good you are. Shocking, I know.
- mumblerino 6y ago
  Tell me more about the dating part

thesimon 6y ago

> that exec could potentially take other roles that pay even more If he would do that, maybe better leadership would improve Mozillas situation.

manigandham 6y ago
Raising the salary shows that the organization is happy with this leadership.
- frivoal 6y ago
  No, because the group that decides on raising the salary is not a shareholder meeting or something like that, but the same people who get that salary. See Mozilla's bylaws: https://static.mozilla.com/foundation/documents/mf-bylaws.pdf https://static.mozilla.com/foundation/documents/mf-bylaws.pd...
- j-pb 6y ago
  No it shows that the leadership is happy with their leadership.
aeternum 6y ago
She, looks like Mitchell Baker is back as CEO as of earlier this year.

lightgreen 6y ago

Exec pay is usually tied to some metrics. Like market share or the revenue in case of Mozilla. (In the corporations it is usually done by offering CEO options with nonzero price.) If the company is not performing well, CEO only gets the basic salary (which is higher than engineer salary, but not too large.) When Mitchell was given a raise for no reason, it is a sign of corruption in Mozilla board.

jameskraus 6y ago
This really isn't crazy compensation given the role and the industry. There are many execs making orders of magnitude more [0]. I know there is a bit of sticker-shock for people who haven't heard about top-level compensation, but it's not unheard of, just usually unspoken. https://usanewssite.com/news/the-unconventional-ceo-of-33-3-billion-snowflake-which-just-listed-the-largest-software-ipo-in-history-is-already-paid-more-than-the-heads-of-oracle-microsoft-and-salesforce-it/ https://usanewssite.com/news/the-unconventional-ceo-of-33-3-...
- lightgreen 6y ago
  It is crazy that the compensation is not tied to metrics. If Firefox at least kept the market share, that would be OK.
  - jameskraus 6y ago
    The source doesn't say this isn't tied to metrics. The base salary is only $450k per year [0]. All the rest of the comp is paid out in other ways. I would wager that there are significant compensation thresholds that are tied to metrics (but we, as outsiders, couldn't know what they are or if they are being hit). [0] https://projects.propublica.org/nonprofits/organizations/200097189/201823199349308932/full https://projects.propublica.org/nonprofits/organizations/200...
- luckylion 6y ago
  > There are many execs making orders of magnitude more For that kind of negative growth? No, of course not. > In its fiscal year ending January 31, 2019, for example, Snowflake had revenue of $96.7 million. A year later that number was $264.7 million, or growth of around 150% at scale.

dvdkon 6y ago

I still don't get why companies pay ridiculous amounts of money to get execs from the outside. Every other role is (mostly) filled via promotions, why should executives be any different? Admittedly, Baker specifically got her role by being "promoted" from a Netscape lawyer and then playing a role in the creation of Mozilla, so my complaint doesn't quite apply. I'd still see letting her go and promoting someone to fill her place as a better alternative to the pay raise.

LoSboccacc 6y ago
it depends on the company but usually the administration prefers people whose allegiance goes upward, not downward

drenvuk 6y ago

This is why I like Balmer and Tim Cook. Their fortunes are tied to the success of their companies rather than leeching off of it as it dies. I'd posit that any CEO who is not in a Ride or Die relationship with their company does not have correctly aligned incentives for their performance.

echelon 6y ago
Microsoft traded sideways during the Ballmer era.
- drenvuk 6y ago
  $22 Billion to $77 Billion in annual revenue between when he became CEO to when he stopped in 2013. I think that's pretty decent. I think that it was growth in enterprise that they were successful with.
- GlennS 6y ago
  Microsoft's share price didn't go up much because they paid out large dividends. If you look at total return people who owned shares in Microsoft did very well. (If you look at a company's share price, you will see a drop roughly equivalent to the dividend per share each time dividends are paid.)