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$60 million dollars for a sales exec! WTF! Am I the only one that thinks this is completely ridiculous? Yahoo! needs products and you could've hired 250 highl

$60 million dollars for a sales exec! WTF! Am I the only one that thinks this is completely ridiculous? Yahoo! needs products and you could've hired 250 highly paid full time developers for 1 year for that cash. Hell - you could've pouched a nice sliver of Google. I mean doesn't Yahoo! suck at engineering and not sales as compared to Google? They're second in search and still pulling billions - I thought all they needed were more products?

001sky 14y ago
COO is slightly different, if that is in fact his role. at $20B mkt cap, $60MM is like a 0.03% stake in the company. Basically a rounding error. In the last 10 years, people learned that value destruction is the same as creation, when it comes to leverage in these scenarios. If you don't pay them $XYZ, they will destroy value or sit idly by as entropy does it for them. The mathematical equivalence of marginal productivity (what they teach in school) and marginal malevolence (street smarts) is elegant in its simplicity. That's how the game is played. One of the downsides of "maximizing shareholder value" as your guiding principle.[1] With that in mind, look at a comp for COO pay: Exec Comp Consuultant > American businesswoman and the Chief Operating Officer of Facebook, Sheryl Sandberg, has an estimated net worth of $1.6 billion Not justifying it, just pointing out the facts. ______ [1] A Mature company is completely different dynamic than a (0,1) innovation scenario/startup, IMHO. And there are more and less sophisticated ways to understand even "Maximizing X value" at the Board Level, stage agnostic.
- guelo 14y ago
  Net worth after an IPO is not the same as a compensation package.
  - 001sky 14y ago
    Apologise, as I was not more precise in my data. But, in this case, most of Sandberg's net worth was from her compensation package at FB as COO. [1] It was really more for order of magnitude: $60 vs $1,500. You could cut that in half and divide by ten and still be 25% higher. When you think like this, the fact that packgage $60M is 100x $0.6 salary gets lost in the shuffle. =D _________ [1] In 2009, FB was $10-15B company. She had some money, though, from google as well presumably.
codeonfire 14y ago
There in the declining cash cow phase, so its a matter of whatever corporate-political faction can get in there and gobble up that revenue ($60mm, nice). It really, really, f'n really is not about engineering at this point in a big corp's life. Most executives would shoot all the engineers if they could get away with it and it created a tiny personal profit for themselves.
rimantas 14y ago
> you could've hired 250 highly paid full time developers > for 1 year for that cash Ok, let's imagine you got $60 million and hired 250 engineers. What do you do now?
- confluence 14y ago
  You do realise that the vast majority of Google's products and moneymakers were developed bottom up. Let the developers work on what they wish valve style. You are hiring them for their brains and initiative you know.
  - riffraff 14y ago
    [citation needed]
    - confluence 14y ago
      Ads were the work of engineers who thought that they'd work better than corporate search that Google first started to monetize. So were Adsense, the ad auction mechanics and the Dutch auction for the IPO. http://adwords.blogspot.com.au/2005/08/adwords-history-lesson.html?m=1 http://adwords.blogspot.com.au/2005/08/adwords-history-lesso... http://publishing2.com/2008/05/27/google-adwords-a-brief-history-of-online-advertising-innovation/ http://publishing2.com/2008/05/27/google-adwords-a-brief-his... That's most of the revenue.
      - philjohn 14y ago
        Also any projects that have come out of 20% time.
        confluence 14y ago
        For example Glass and the Autonomous car.
joewee 14y ago
The majority of his pay is tied to company performance and doesn't seem unreasonable at all. "First and foremost, Yahoo's overall revenue suffered, dropping from $1.601 billion (U.S.) in Q2 of 2010 to $1.229 billion in Q2 of 2011 – a 23 percent drop." This person will be largely responsible for helping prevent the company from losing $400MUSD a year in revenue. If he can do that, well worth the performance package. But ideally they will want to increase profitability, not just top line sales. "Company income actually increased. Q2 income showed a 9 percent increase, having risen to $191 million from last year's $175 million. Net earnings are up 11 percent, while net earnings per share are up 18 percent. All of the above can be blamed on lower operating expenses, which decreased from $953 million to $885 million." Sales aside, operations is important for growing Yahoo profitability. This person will be COO entirely responsible for operations. I bet his mission will be to reduce operating expenses. If he can save them another $100M in cost a year for a $60M package (likely to be paid out over 4-5 years) thats a good deal. Hiring programmers without efficient operations is truly a waste of money.
- confluence 14y ago
  Any idiot can fire a bunch of people and stop plunging expenses (see all "professional" CEOs) - but that's not the way forward - unless your Nissan. If you fire large groups of people - you destroy morale and break the trust of your people - this kills productivity (see Nokia/ARM). Cutting costs is and will continue to be one of the worst ways to grow - because frankly the problem is your products suck and people are leaving.
seivan 14y ago
Agree. I can't help think about the distaste their senior developer's feel about now. I mean if there are full stack developers who also do proper product and this sale exec comes along because apparently he is the solution to their problems... shitty products.
PakG1 14y ago
Look at what a good COO can do with a company that doesn't have many good products. http://www.businessinsider.com/the-person-running-aol-is-not-who-you-think-it-is-2012-10 http://www.businessinsider.com/the-person-running-aol-is-not...
pilsetnieks 14y ago
It's $1M signing bonus + $600K a year + $36M in stock options: first, he has to stay at least for four years for the options to fully vest and then he has to hope Yahoo's stock won't completely tank during those years. Considering his position and the impact on company he could have, compensating him in stock options is very reasonable.

001sky 14y ago

COO is slightly different, if that is in fact his role. at $20B mkt cap, $60MM is like a 0.03% stake in the company. Basically a rounding error. In the last 10 years, people learned that value destruction is the same as creation, when it comes to leverage in these scenarios. If you don't pay them $XYZ, they will destroy value or sit idly by as entropy does it for them. The mathematical equivalence of marginal productivity (what they teach in school) and marginal malevolence (street smarts) is elegant in its simplicity. That's how the game is played. One of the downsides of "maximizing shareholder value" as your guiding principle.[1] With that in mind, look at a comp for COO pay: Exec Comp Consuultant > American businesswoman and the Chief Operating Officer of Facebook, Sheryl Sandberg, has an estimated net worth of $1.6 billion Not justifying it, just pointing out the facts. ______ [1] A Mature company is completely different dynamic than a (0,1) innovation scenario/startup, IMHO. And there are more and less sophisticated ways to understand even "Maximizing X value" at the Board Level, stage agnostic.

guelo 14y ago
Net worth after an IPO is not the same as a compensation package.
- 001sky 14y ago
  Apologise, as I was not more precise in my data. But, in this case, most of Sandberg's net worth was from her compensation package at FB as COO. [1] It was really more for order of magnitude: $60 vs $1,500. You could cut that in half and divide by ten and still be 25% higher. When you think like this, the fact that packgage $60M is 100x $0.6 salary gets lost in the shuffle. =D _________ [1] In 2009, FB was $10-15B company. She had some money, though, from google as well presumably.

codeonfire 14y ago

There in the declining cash cow phase, so its a matter of whatever corporate-political faction can get in there and gobble up that revenue ($60mm, nice). It really, really, f'n really is not about engineering at this point in a big corp's life. Most executives would shoot all the engineers if they could get away with it and it created a tiny personal profit for themselves.

rimantas 14y ago

> you could've hired 250 highly paid full time developers > for 1 year for that cash Ok, let's imagine you got $60 million and hired 250 engineers. What do you do now?

confluence 14y ago
You do realise that the vast majority of Google's products and moneymakers were developed bottom up. Let the developers work on what they wish valve style. You are hiring them for their brains and initiative you know.
- riffraff 14y ago
  [citation needed]
  - confluence 14y ago
    Ads were the work of engineers who thought that they'd work better than corporate search that Google first started to monetize. So were Adsense, the ad auction mechanics and the Dutch auction for the IPO. http://adwords.blogspot.com.au/2005/08/adwords-history-lesson.html?m=1 http://adwords.blogspot.com.au/2005/08/adwords-history-lesso... http://publishing2.com/2008/05/27/google-adwords-a-brief-history-of-online-advertising-innovation/ http://publishing2.com/2008/05/27/google-adwords-a-brief-his... That's most of the revenue.
    - philjohn 14y ago
      Also any projects that have come out of 20% time.
      - confluence 14y ago
        For example Glass and the Autonomous car.

joewee 14y ago

The majority of his pay is tied to company performance and doesn't seem unreasonable at all. "First and foremost, Yahoo's overall revenue suffered, dropping from $1.601 billion (U.S.) in Q2 of 2010 to $1.229 billion in Q2 of 2011 – a 23 percent drop." This person will be largely responsible for helping prevent the company from losing $400MUSD a year in revenue. If he can do that, well worth the performance package. But ideally they will want to increase profitability, not just top line sales. "Company income actually increased. Q2 income showed a 9 percent increase, having risen to $191 million from last year's $175 million. Net earnings are up 11 percent, while net earnings per share are up 18 percent. All of the above can be blamed on lower operating expenses, which decreased from $953 million to $885 million." Sales aside, operations is important for growing Yahoo profitability. This person will be COO entirely responsible for operations. I bet his mission will be to reduce operating expenses. If he can save them another $100M in cost a year for a $60M package (likely to be paid out over 4-5 years) thats a good deal. Hiring programmers without efficient operations is truly a waste of money.

confluence 14y ago
Any idiot can fire a bunch of people and stop plunging expenses (see all "professional" CEOs) - but that's not the way forward - unless your Nissan. If you fire large groups of people - you destroy morale and break the trust of your people - this kills productivity (see Nokia/ARM). Cutting costs is and will continue to be one of the worst ways to grow - because frankly the problem is your products suck and people are leaving.

seivan 14y ago

Agree. I can't help think about the distaste their senior developer's feel about now. I mean if there are full stack developers who also do proper product and this sale exec comes along because apparently he is the solution to their problems... shitty products.

PakG1 14y ago

Look at what a good COO can do with a company that doesn't have many good products. http://www.businessinsider.com/the-person-running-aol-is-not-who-you-think-it-is-2012-10 http://www.businessinsider.com/the-person-running-aol-is-not...

pilsetnieks 14y ago

It's $1M signing bonus + $600K a year + $36M in stock options: first, he has to stay at least for four years for the options to fully vest and then he has to hope Yahoo's stock won't completely tank during those years. Considering his position and the impact on company he could have, compensating him in stock options is very reasonable.