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Yahoo spends $58 million to fire its chief operating officer
- omegant 13y agoHonest question, could somebody please explain why a big corporation like Yahoo, doesn't have some kind of cliff and progresive compensation? It's the Article accurate?
- anonu 13y agohttp://www.sec.gov/Archives/edgar/data/1011006/000119312514146035/d710905dpre14a.htm http://www.sec.gov/Archives/edgar/data/1011006/0001193125141... Page 83 of the preliminary filing shows that exact number. Its accurate!
- smackfu 13y agoFrom the SEC filing linked below, this compensation was primarily because Yahoo gave him a large number of RSUs upon joining to make up for compensation he was giving up by leaving Google. Otherwise he would have lost money by taking the new job. Those "make-whole" RSUs then vested early upon termination, which is good negotiating, but not surprising. He also got performance options, which were granted upon termination because he met the performance goals of the stock price.
- hga 13y agoIn addition to the other good answers as I write this, there's the general principle that a troubled company like Yahoo has to pay extra to attract top talent. And based on all that I've heard, even more to work for a CEO like Marissa Meyer.
- omegant 13y agoI agree that you have to pay more for top talet, but I don't understand how it's not vested. He is not aligned in getting results beyond a year this way. The moment the stock rises he can make himself fired and cashout. Could you please explain a bit what do they say about Marissa?
- hga 13y agoFor a company like Yahoo top talent is a seller's market. They have to vest the compensation if they want to have a chance at getting the talent in the first place. Note that for example there's serious danger of reputational damage; someone who joins such a company at such a high level is in danger of getting their career derailed or worse. As for the CEO, we can stick to straight observables: a number of people joined the company under the condition they'd work off-site, often in roles where that's just fine like customer support (easy metrics), and plenty of them were nowhere near a Yahoo office. One day she declares that if you don't start working in a Yahoo office, you'll lose your job. As e.g. Maggie Lange at Gawker puts it: "Mayer famously took her position at Yahoo while six months pregnant and had her baby last fall. However, unlike other Yahoo employees, she is able to bring her child to work to the nursery she paid to have built in her office." (http://gawker.com/5987043/yahoo-ceo-marissa-mayer-installed-a-nursery-in-her-office http://gawker.com/5987043/yahoo-ceo-marissa-mayer-installed-...) That's just the most notorious I can remember, there are as I recall a number of others.
- chollida1 13y agoThis happens fairly often with C level execs, and generally with anyone who gets big bonuses that are restricted over time, specifically hedge fund employees is the area I'm familiar with. If you want to hire them away, its common for you to have to make up the loss they would take from walking away from the restricted portion of their bonus. I've seen payouts to traders and technologists of up to 3 million, 50+ million is, well, that's a lot of money to make up:)
- sillysaurus3 13y agoI've been wondering: How's Marissa Meyer doing as CEO? I haven't heard much about Yahoo recently except that they acquired some companies in order to get talent in the mobile space. It's been about 1.75 years since she became CEO. Is that enough time for a non-Steve Jobs CEO to change the trajectory of a company?
- goldenkey 13y agoThe article mentions that she was involved in his hiring.
- Theodores 13y agoYou are forgetting: Marissa redesigned the logo! All by herself!!! Seriously though, what do Yahoo actually do? The mail has gone the way of 'compuserve' in that you don't very often get to see a yahoo address in an email these days. Search was something they just gave up on, then there portal style homepage, does anyone actually go there? They should have stuck with search, it was something that they were reasonably good at, but, having dropped that it is now not an easy game to get back in to. Perhaps they should just give up on being a branded entity and become a faceless holding company.
- stingraycharles 13y agoI have to disagree. I'm currently in Asia and /everyone/ appears to be using a yahoo email. I even created some gmail addresses for them, but it just doesn't appeal to them.
- lifeisstillgood 13y agoI'd have done it for them for half that :-)
- barking 13y agoStop underselling yourself!!
- lifeisstillgood 13y agoWow, I think that's my biggest ever karma loss. Ah well.
- 6d0debc071 13y agoYahoo seems to have a certain difficulty in making the best use of the people it works with. Flickr springs to mind. If they're firing him just because he gives sucky presentations - which seems to be the only guess the article has - then that's on them.
- malanj 13y agoThat has to be one of Marissa's most public mistakes yet. She was the one who pushed very hard for Yahoo to hire him. It's interesting that a few articles I read mention that he's really smart but not good with people. I've read that Marissa has the same characteristics, I wonder if that gave her a blind spot on this one?
- dspillett 13y ago> I've read that Marissa has the same characteristics, I wonder if that gave her a blind spot on this one? Or assumed the similarity could mean they would work well together and that very much didn't happen? Or they worked together fine but the rest of the board couldn't stand the combination!
- mathattack 13y agoThis is old news, right? The money and mistake was already baked into the stock price. To your point, we tend to like hiring people similar to ourselves because it's comfortable and validating. In reality what we need is people who cover our blind spots rather than share them. The great partnerships have this.
- erichurkman 13y agoTo quote Carnegie's self-written epitaph: Here Lies A Man Who Knew How to Enlist in His Service Better Men Than Himself.
- mathattack 13y agoI've also heard it as "As hire As, Bs hire Cs"
- deleted 13y ago[deleted]
- zaidf 13y agoI really feel for Jerry Yang. It seems like every Yahoo CEO and Board has been riding the coattails of his Alibaba investment while his name is left for the footnotes.
- grmarcil 13y agoFair point, but don't feel too bad for him: http://www.forbes.com/profile/jerry-yang/ http://www.forbes.com/profile/jerry-yang/
- bedhead 13y agoIt's really sad how wildly distorted executive compensation has gotten. The best phrase I heard was "entrepreneurial reward for managerial duty", and I fear it's become all-too-common. My eyes popped out of my head recently when I saw that Coca-Cola (yes, that same drink company that's done just fine for over a hundred years and whose organic growth rate might be 1% if they're lucky) was trying to give management $13 BILLION over the next four years. It's insanity. And when it's not simple pay, it's severance packages that give Fuck-You money to people whose performance provably dreadful. Leo Apotheker made $25 million on his way out the door from HP, after vaporizing over $6 billion in buying a fraudulent company and doing virtually no due diligence. It's madness, pure madness. Executive comp is a bubble, these people aren't worth anything near this much, but I have no idea when it will pop.
- chrisgd 13y agoGod that is the truth. And the push for stock buybacks just continues to gloss over the issue. Stock outstanding continues to decline, but the amount of money spent on buybacks should be pushing shares out down twice as fast. Instead ridiculous stock options (executives need to be invested in the Company!) continue to dilute the impact of buybacks.
- deleted 13y ago[deleted]
- kolbe 13y agoSide note: asset bubbles pop. Executive pay is not an asset. I don't know where you work or what you do for a living, but I've heard a similar rant about executive pay from hundreds of people, whereas I've only ever seen a handfull of people trying to do something about it. So, I propose to you, if this hurts your sensibilities so much, what are you doing about it? Are you continuing to feed the machine by working as one of their employees? Are you participating by trying to create an aqui-hirable startup? Or are you pushing to enact change?
- thenewbtg 13y agoThere is nothing we can do, really. Money is very close to power, and obviously the relatively poor (those who rely on a salary) have far less say and control than the extravagantly paid (those who do not require a salary). It is a fundamental trait of our free and capitalist society. We're merely mourning obvious inefficiencies, "bugs" in the convoluted system of laws and philosophies and culture that govern our society. This is a suboptimum outcome, in our opinion. Watching inequality rise dramatically over a few short decades only bolsters the belief that these are suboptimal outcomes. And watching these unmeritorious fools perform poorly while being paid thousands of times the average pay of their own staff is disheartening. It's obviously not a meritocracy. It's obvious that the extravagant, suboptimal pay scheme isn't buying quality leadership, nor is it rewarding any kind of out-sized risk on the part of management. Tiny risk compared to venture or entrepreneur, small or negative benefit, massive reward.
- benaston 13y agoAn excellent case study for the Macleod Heirarchy. http://gapingvoid.com/2004/06/27/company-hierarchy/ http://gapingvoid.com/2004/06/27/company-hierarchy/
- stormqloud 13y agoThis is a testament to how top management destroy shareholder value and an operating company in their own massive short term gains. "I'll hire you for $50 million, then you hire me for $60 million, think how much value we just brought to the company."
- smackfu 13y agoIf you're the COO, and most of your compensation is in stock or bonuses related to the stock price, and the stock nearly triples during your reign (15.92 to 41.07)... you're going to get a big payout. I also don't really buy that firing him cost this much, since much of it seems to have been a sunk cost. That stock was going to vest eventually whether he was fired or not, it just vested faster because he was fired.
- stingraycharles 13y agoThis needs to be higher on top, because it appears to be a point many people are missing.
- hkphooey 13y agoThere should be claw-back provisions if an employee don't perform.
- RighteousFervor 13y agoAnyone else notice that the comments at washingtonpost.com are more insightful and succinct than here at HN?
- SandB0x 13y agoCan you point out three insightful comments from below the Washington Post piece? (Time of posting ~16:19 GMT.) I'm seeing the standard "1%" and Disgruntled of Tunbridge Wells type comments that you see under every newspaper article and not a great deal of insight.
- RighteousFervor 13y agoOverall, the comments there are a more enjoyable read.
- mkohlmyr 13y agoYou must be reading a different set of comments from me. Overall I see quite a lot of short low-information / trying-to-be-funny / plain ignorant comments that add very little value to the story.
- saraid216 13y agoDid you seriously jump from "insightful and succinct" to "enjoyable" the moment someone challenged you?
- pachydermic 13y agoThat video is painful to watch... I know there's clearly a bit of a language barrier, but this guy sounds like a complete dingus. Then again, he's the guy making a cool ~$60 mil a year so what does that suggest? I wonder what a guy like that actually does on a day-to-day basis. I could see there being a huge amount of pressure and work to do, but maybe they just hand it off to their underlings secure in the thought that they have a fat severance package waiting for them if anything goes wrong. How can you expect someone to give a damn when they have no skin in the game? So this guy did an apparently horrible job and made millions. How does that make sense? Wouldn't you only want him to make an obscene amount of money if he did a good job? It really is fascinating how massive companies like that work - I guess you can draw some similar conclusions as in politics.
- gcb0 13y agoI always assumed that hiring price included him bringing clients from Google. As that is usually what happens when you hire anyone from sales from your competitor...
- leccine 13y agoExecutives salaries are always a hot topic in certain countries, not to much in the US though. Swiss people got so upset there is an entire movement limiting the CEO salaries to something sane. http://blogs.reuters.com/great-debate/2013/11/15/swiss-outrage-over-executive-pay-sparks-a-movement-in-europe/ http://blogs.reuters.com/great-debate/2013/11/15/swiss-outra... I guess it would be good to put a cap on exec compensation, it is just simply unfair to other workers especially given the poor performance...
- ausjke 13y agoWhoever hired him should pay the cost of this mis-judgement, at least partially. All hires should be paid bonus _after_ you made contributions, before then you have your regular salary. This is ridiculous.
- kereta 13y agoLet's email Mayer to work for 15 months and get $58 million too!