[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..