[gloverkcn]

People who are criticizing Mayer's deal are failing to realize that Mayer had better options than taking over as head of yahoo. She was a bright star who could have gone to any number of companies.

Nobody in the tech community would have categorized Yahoo as "ready for a turn around". Companies that large that have been mismanaged for so long are filled with middle managers that are better at internal politics than driving initiatives. The odds of yahoo turning around were extremely low. They had to put a deal together to entice someone who had a good reputation from a leading tech company to put their name on the line to go try and sort out a giant mess.

If your gripe is the difference between her salary and the lowest paid then I understand. That doesn't mean you bash Mayer for playing by the rules that society has set up. Good for her for getting paid. That makes you no different than the middle manager who isn't helping their team push forward but instead is sitting in meetings taking pot shots at everyone else.

Support a law that says the top executive can't make x times the total comp of the lowest paid. Of course every law like that will create incentives to structure companies to maximize payments to execs. those conversations would add more to our discussion than just throwing rocks.

[product50]

You are wrong. Before joining Yahoo, Marissa was demoted from her position and no longer was in Larry's inner circle. She pretty much had her hand forced to quit Google given the influence she had once no longer remained.

Wrt joining other tech companies, it is debatable whether she could get a CEO role of $30B+ tech company given she never had such an accreditation before.

Wrt your excuses on why she failed, those are exactly that - excuses. If it is such a common knowledge that middle managers are political centers, why didn't she do anything about it? There wasn't a single round of layoffs at Yahoo in her first 2.5 yrs when everyone was asking why Yahoo needs 12k+ employees to support $4B in annual revenues. She failed to figure out what was wrong with Yahoo and take adequate steps to fix it. In essence she completely failed in her duties as ceos.

I think a lot of frustration here is not that CEOs earn that much. I, for one, am totally fine if Satya Nadella earns $100M+ for all the great work and transformation he has done over at Microsoft. So I don't agree with your proposal on fixing the salaries of CEOs based on a multiple. I think what is frustrating here is that here is a CEO who clearly failed across the board and did nothing noteworthy (and made huge costly mistakes such as hiring Henrique de Castro which cost Yahoo $100M) but still was seemingly unaffected in securing the CEO role and being paid handsome salary/bonuses.

[wwalser]

Any ah… evidence for that first claim (or any of them really…)? It seems obvious that she would have netted more money if she had just stayed anywhere near the top tier of Google.

Yahoo was a capsized ship before Marissa came aboard. The fact that she got it into harbor at all is impressive enough for me. I always assumed there was a near-zero chance that she would save it from complete collapse.

Making bets that don't pay off is par for the course for a CEO (Bezos & Satya are both great at this), some just have the luxury of huge profit centers to point at when investors come knocking. Marissa made her bets — some worked, others didn't. She managed to get an asset that, for a time, was negatively valued in the market[1] sold for parts. How she is compensated for the feat is, I assume, based on her employer's evaluation of that result.

1. http://www.investopedia.com/stock-analysis/070215/why-yahoos...

[koolba]

Which of her bets would you say payed off?

All that comes to mind for her tenure is overpaying for a bunch of acquisitions and then destroying what's left of them.

[wwalser]

Imagine you have something and you take it to the market and investors tell you it's worth negative amounts of money. It's actually worse than worthless. Then you take it to them later and they purchase it for multiple billions of dollars.

Did she turn a valueless asset into a hundred billion dollar company? No. No one _expected_ her to, some may have hoped that she would but hope is different to expectation as is made clear from her compensation agreement.

"If you turn this company around we'll pay you loads of money. Money stacked so high you'll have trouble keeping them from toppling over. On the other hand if you _just_ make it worth a few billion, we'll _just_ give you a lot of money. The piles will not topple over."

On net her bets were of positive value to investors. That's the whole of the equation once the sale is closed.

[koolba]

I was specifically asking what successful bets she made as CEO and I don't see anything in your answer pointing them out.

Saying her bets won because she found a buyer is like inferring you got some correct answers because you passed a test. It doesn't answer which questions (if any) were actually answered correctly.

It's entirely possible the market had no appetite for Yahoo prior to her becoming CEO, she mismanaged the company but not enough for it to implode under her watch, and the market changed its mind to it in 2016/2017.

[product50]

Are you serious you don't know about her Google demotion? Here read this and get enlightened: http://venturebeat.com/2012/07/17/marissa-mayer-yahoo/

Also you didn't know about Henrique de Castro catastrophe? Here read this: https://www.google.com/amp/s/www.forbes.com/sites/jeffbercov...

If Yahoo was a capsized ship, why did they have to hire a very expensive exec for the death march? Obviously, the expectation was that Marissa can bring about some improvements.

Apologies for being snarky in this comment as I had a difficult time appreciating your ignorance.

[wwalser]

I appreciate that you've cited some sources (however questionable). The tone is fine, it's sometimes hard to maintain composure. Especially when someone points out that you're wildly making things up.

Any response to selling something for money which was, for a time, of negative value according to the market?

Edit: I just realized the first source is an op-ed with as much conjecture as your original post. Nice.

[jimmywanger]

I don't know how much evidence this is, but I can confirm Mayer getting demoted as I was an engineer on maps during the time that reorg was going on.

She no longer reported to Larry directly, she reported to Huber who took over all of Geo, which subsumed maps.

Internally, I don't think many people liked working with her. She had a coterie which did her bidding, but most people were not impressed, and there was much rejoicing when she joined Yahoo.

[wwalser]

I have heard that people didn't care for working with her. I don't find that surprising given her espoused views on work ethic.

[gloverkcn]

I wouldn't say capsized ship as much as "capsizing". Yahoo had a revolving door of CEOs. She was the 4th CEO in a decade. The one before her lasted 4 months (and made $6 million for his trouble). And in that time the stock price had gone from $40 to $16. Just because Yahoo was sinking doesn't mean it was sunk. Yahoo still had revenue, people, and products, but it had been declining for a long time.

It wasn't a death march, it was hail mary to see if Yahoo could be saved. The majority of her compensation was tied to stock price.

The snark doesn't bother me, but people want to hang the failure of Yahoo on Mayer. She did not take a vibrant, innovative, and successful company and drive it into the ground.

The stake in alibaba helped Mayer give her a windfall of cash she wouldn't have had otherwise. Her incentives were tied to stock price NOT performance. Start bashing the board for tying her compensation to the wrong metric.

[shostack]

This is a fair point that the board is really the one who set her objectives, and it seems she met them.

Many people don't realize that you can increase share price by "killing" a company if you can either let shareholders come out ahead as a result, or even just minimize their downside from what could have been a much larger loss.

For every CEO out there who makes hugely unpopular decisions that don't appear to be doing what the masses consider to be "the right thing" to get the company back on track...ask yourself if the board might have given direction that led down this path. Ultimately they are the ones the CEO reports to.

[valuearb]

Pretty sure the reason they had to spend so much to get a new CEO is that no one wanted the job, it was perceived as a very difficult turnaround.

[vonklaus]

Marissa Mayer executed the goal she was brought in for which was to create positive market sentiment so they activist investors who brought her in would make significant returns.

That said, obviously it was possible to turn around Yahoo, and the investors, Mayer and the company would be better off if she succeeded. I believe she tried genuinely hard to fix it and I believe she failed harder. Obviously, Microsoft is in a much different position but Nadella has had such success there that you would expect Mayer could've at minimum kept the company from failing.

[iaw]

> People who are criticizing Mayer's deal are failing to realize that Mayer had better options than taking over as head of yahoo.

Could you provide sources for this? What opportunities were available to Mayer better than being an executive of a multi-billion dollar giant like Yahoo?

Edit: I'm seeing a lot of speculative replies but none that demonstrate an 8 to 9 figure payday from 5 years of sitting in place. Does anyone have an example of an alternative that would've yielded her this much wealth?

[compiler-guy]

It's not just the opportunities that were on the table at the time, but also declining all future opportunities if this venture failed.

You get one shot at a job like this. The company making the offer had to make it worth her while to

A. Leave Google, and while she wasn't the top dog at Google any more, she was still extremely well respected, and incredibly well compensated, and--perhaps most importantly--very, very safe. What would it take for you to leave a job like that?

B. Spend her one shot at the ultra-big time at a company near death, where it was likely that she couldn't save it, regardless of what she did.

Yahoo had to offer her the big bucks for to take a risk like that, and one part of reducing the risk to her is to give her a golden parachute, where regardless of whether the venture succeeds or fails, she is still better off than at her old position.

And you have to make all the numbers risk-adjusted.

All of this negotiated _before_ you know if she is going to succeed or fail.

Yahoo wanted her that badly and spent what it took to get her.

[jimmywanger]

> she was still extremely well respected, and incredibly well compensated, and--perhaps most importantly--very, very safe.

Re: well respected and very safe, not really. Worked during that time in Maps. Cracks were starting to show.

She wasn't that well respected in engineering circles. Maybe in product management she was, I don't have much visibility into that.

Also, her safety was in question. She already got shunted to a position with less authority and a further degree of separation from Larry Page. She wouldn't have gotten fired, but a slow stripping of responsibilities and transfer into a ceremonial role probably wouldn't have been out of the question.

[compiler-guy]

There is no doubt she had lost in her last round of executive intrigue at Google, but still, she was employee number 20. Even shunted aside, she was making millions of dollars.

There was certainly a group of engineers who didn't respect her, but there was also a very large contingent who did. On the product level, many credit her work on the look and feel of early Google products with a broad portion of Google's early success. (And indeed, one reason she was shunted aside because Google had decided to abandon her vision of Google's look and feel.)

Your last paragraph is pretty much pure speculation. It's pretty clear she was unhappy at Google, but what would have happened if she hadn't taken the Yahoo job? She could have bided her time until a better situation came along. Google wasn't going to fire her.

[jimmywanger]

> There was certainly a group of engineers who didn't respect her, but there was also a very large contingent who did

I don't know of a single engineer who respected her who worked directly with her. The ones who didn't work directly with her were sort of indifferent, and I tended to discount those data points.

Of course, YMMV, plural of anecdote is not data, but the informed engineering sentiment was neutral to negative.

> Your last paragraph is pretty much pure speculation.

It depends on your definition of "safe". She was in no danger of getting fired, as I pointed out. She also was in no position to be taking on more responsibilities or product areas - the fact that she had much of geo taken away from her is a indication of lost faith.

Internally, geo was not considered an especially well run organization for multiple reasons. The chances of recovering from that in an organization is low to none, in my experience.

[grandalf]

> Could you provide sources for this?

Do you think that Yahoo's board decided to grant Mayer the golden parachute out of kindness, or out of sympathy to a fellow member of the nobility?

Mayer and Yahoo's board negotiated the terms of her contract. The parachute is meant to lure an executive who would normally not want to risk taking the helm of such a high risk company.

[michaelt]

  Do you think that Yahoo's board decided to grant Mayer
  the golden parachute [...] out of sympathy to a fellow
  member of the nobility?

A number of explanations have been posited for the fact executive pay has soared in recent decades while other workers' pay has remained stagnant.

Bebchuk and Fried's "Pay without Performance" attribute this to the fact that boards routinely approve pay packages that serve the CEO rather than shareholders, instead of bargaining with the aim of maximising shareholder wealth.

They identify several factors underlying this - shareholder inactivity bears a big part of the blame - but one factor is essentially yes: It's in the interests of people who are at the top of business to approve high pay for people who are at the top of business.

[grandalf]

> A number of explanations have been posited for the fact executive pay has soared in recent decades while other workers' pay has remained stagnant.

I think a simpler explanation is supply and demand.

If you want to hire as CEO someone who has worked in a close competitor's most profitable business unit and is credited for much of its success and culture, the pickings for Yahoo were quite slim. Also, Yahoo had brought in several other highly successful CEOs, including its original founder, who had all failed miserably. Mayer was clearly a last-ditch attempt to salvage the company.

> pay packages that serve the CEO rather than shareholders

You are describing incentives that do not simply reward share price growth? If so, and if you think supply and demand for qualified executives has nothing to do with it, what kind of pay package do you think Yahoo should have offered?

I'd argue that there has to be a time bias in the package. Share price growth is fine if the board is OK with Mayer taking 30 years to grow the company into a bigger valuation just before deciding to retire. But if more action in the near term is desired, and behavior other than the typical private equity style fat trimming is desired, what options are left?

[acjohnson55]

Such a risk!

With respect to the complexity of running a multi-billion, it still seems a little absurd to phrase out that way. To me, real personal risk is losing your house or dying.

[grandalf]

Well, Mayer faced tremendous reputation risk if she failed. Now that she has failed, she is not held in remotely the same high regard that she was prior to taking the helm of Yahoo.

She's also been implicated in some of Yahoo's more embarrassing missteps during her tenure.

So it's important to weight the parachute against her annual salary in a "safe" job for 3-5 years. It may still seem overvalued (or undervalued) but the price was reached through negotiation.

[cobalt]

so? If I fuck up, I burn my reputation as well (It may be easier to hide, but it still stands) and I don't get a giant payout

[grandalf]

It depends on your market power when negotiating your contract. Most employees don't have enough market power to negotiate anything more than a week severance pay.

[valuearb]

You weren't already worth $300M.

[ryandrake]

I, for one, would have been perfectly able and happy to have done the job of "fail to turn around Yahoo" for a mere 1/100'th of what she got. For some reason, the board chose not to call me for that interview. Could have saved those shareholders some big money!

[xiaoma]

>"I have to chuckle at this question. Do you think..."

This is kind of rude and condescending and I don't see how prepending it to your comment improves the discussion.

[grandalf]

> This is kind of rude and condescending and I don't see how prepending it to your comment improves the discussion.

Apologies. No condescension was intended. I was amused by the insinuation in the comment that Mayer was chosen for wholly irrational reasons by the board. I removed the mention of my chuckle from the comment.

[kornish]

Well, for one, being an executive at a multi-billion dollar giant which was growing or doing well.

edit: by "executive", I was including the whole C-suite – should have clarified.

[jacquesm]

But which multi-billion dollar giant would go for an in-experienced CEO?

Running a department of a large company is not the same as being CEO of even a much smaller one.

I figure the only reason she was given a shot was that the Yahoo! board hoped the Google magic had somehow rubbed off on Mayer and that that alone would make the difference. Other than that I don't see what would have gotten her a CEO spot, especially not in a growing company at the multi-billion $ level.

Yahoo! did not have that much to lose at that point in time.

[wwalser]

The person above you didn't say CEO. They said exec.

If she had stayed at Google and had some equity comp she would have netted more money. Absolutely.

[pmlnr]

But those tend to hire/promote CEOs who can actually push things forward.

[kornish]

Not all executives are chief executives. Meyer surely could have gotten another VP or SVP job at a non-Google company with momentum. To require compensation for risk/opportunity cost in foregoing those opportunities seems very reasonable.

[oh_sigh]

What company fitting that description could Mayer have gone to?

[viggity]

One option would be to continue to work as an executive at Google, where she was already working. I would have to imagine that Vice President of Search Products at GOOGLE would be able to find a cushy gig just about anywhere in tech.

[mikeyouse]

I imagine any unicorn in existence would have jumped at the opportunity to have her come in as COO or CEO if it wasn't Founder-led.

[jacquesm]

COO yes, CEO no. She simply did not have the relevant experience.

Ironically, now she does but now any such companies would likely not hire her.

[cat199]

but she has enough money to buy several and build her own empire, if she is so inclined.. so there's that..

[phaus]

How was this even a good deal for her? Didn't the fraud she hired and was immediately forced to fire get $60 million as a severance package?

I know I'd like $23 million for getting fire, but I'm just a regular person. I thought she would get significantly more.

[xiaoma]

She lost some of her expected bonuses due to the repeated security breaches that compromised user accounts.

http://www.recode.net/2017/3/1/14783686/yahoos-lawyer-ousted...

[st3v3r]

"That doesn't mean you bash Mayer for playing by the rules that society has set up."

So "don't hate the player, hate the game"?

I've never agreed with that idea. The "players" are adults who are perfectly capable of taking responsibility for their own actions.

[ue_]

>Support a law that says the top executive can't make x times the total comp of the lowest paid.

Or support a law that means that you get paid for as much as you work. That makes more sense, no?

[yellow_postit]

How do you propose to measure this?

[ue_]

Although there are various ways (which I'm not personally familiar with), hours of SNLT may be a starting point for more complex calculations. It doesn't apply for management positions (or really positions which don't produce a non-reproducible good), though I'd be interested to see where the research in that's going.

I'm not sure why my comment was downvoted, especially without explanation. I thought it's quite reasonable for a person to be paid as much as he or she works.

[FLUX-YOU]

If we did, I'm pretty sure Torvalds would get all the money anyway