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Comment by adriand | Hacker News Reader

It's easy to criticize Mayer but I think the expectations of what she could have achieved were pretty wildly out of whack. I'm reminded of Daniel Kahneman's dissection of CEO performance and the book "Built to Last", in his book, "Thinking Fast and Slow":

> The basic message of Built to Last and other similar books is that good managerial practices can be identified and that good practices will be rewarded by good results. Both messages are overstated. The comparison of firms that have been more or less successful is to a significant extent a comparison between firms that have been more or less lucky.

> Because luck plays a large role, the quality of leadership and management practices cannot be inferred reliably from observations of success. And even if you had perfect foreknowledge that a CEO has brilliant vision and extraordinary competence, you still would be unable to predict how the company will perform with much better accuracy than the flip of a coin. On average, the gap in corporate profitability and stock returns between the outstanding firms and the less successful firms studied in Built to Last shrank to almost nothing in the period following the study. The average profitability of the companies identified in the famous In Search of Excellence dropped sharply as well within a short time. A study of Fortune’s “Most Admired Companies” finds that over a twenty-year period, the firms with the worst ratings went on to earn much higher stock returns than the most admired firms.

Mayer wasn't lucky. But I bet she's far more competent than most of us.

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This is just as much an argument in support that she doesn't deserve to get 55 million. Just because you took the helm of the titanic as it was hitting the iceberg doesn't mean you deserve to make 250 times what a regular engineer makes.

More than 250x. Her total compensation during her tenure at Yahoo was http://www.businessinsider.com/marissa-mayer-365-million-5-y...

This is probably 365x what an engineer makes there, she makes in a day what an engineer makes in a year. With this kind of compensation, the actual outcome of Yahoo's business is irrelevant to her. That and the fact that it is not her own business. This is an illustration of the modern problem of separation of real ownership from control. Henry Ford for example strived to buy out his investors and became close to being the sole proprietor of Ford Motor.

> the actual outcome of Yahoo's business is irrelevant to her

Maybe, but I doubt. An executive like her wouldn't settle just for a paycheck, success and image are way more important. Instead of becoming the CEO that saved Yahoo, her legacy is that she will become the last CEO of Yahoo (when the worst case happens) that didn't turn Yahoo around plus acquired a bunch of expensive startups. Oh yeah she did turn the culture around inside Yahoo more Google-like benefit, but history book usually tells the bad things first.

In fact it doesn't take an executive role to understand. I wouldn't want to go to another job with little accomplishment in my previous job. I just feel shit if I do.

> An executive like her wouldn't settle just for a paycheck, success and image are way more important.

> I wouldn't want to go to another job with little accomplishment in my previous job. I just feel shit if I do.

Bullshit. Most people would be fine feeling a little shitty for a few years for THREE HUNDRED MILLION DOLLARS.

This theory that somehow executives are motivated "differently" is totally bonkers. They're just as selfish and short sighted and apathetic as you or me, but they're playing at the high-roller table with other people's money.

Very good and apt reply. I mean there wasn't much of a "push" for her to perform as compared to an engineer. She was already making way too much more. But so do many a politicians. They just successfully sell themselves to "foolish" willing buyers.

There is no reason to use bullshit here.

I think you're completely wrong, maybe you dont know what youre talking about (by not being at exec mulit m position). You judge compensation from your perspective.

My argument is: you forgotten (financial) starting point of her. Jump to yahoo didnt increase her situation x7 (capital) and this is currently widely believed change which must happen to individual to have permanent happines increase because of financial change (inducing financial backed motivation). She for sure is aware of how it works.

That being told your argument against that success and image is not important to her is wrong. It is much more important to her than money compensation.

Quite; consider that in terms of both jobs and shareholder value destroyed, Fiorina has a decent claim on the title of "worst CEO ever" but she did alright out of it herself and is now bragging about how her corporate experience makes her presidential material.

The part of me that loves satire was hoping for a joint Trump/Fiorina bill where they'd both be talking about applying their fantastic business experience in the White House.

This is excellent response. All this 'Greater calling' by most people at top of corporate ladder is bullshit. They have orders of magnitude more time and money to talk about issues irrelevant to business. This way they can ensure tragic/glorious profiles by hacks about their life and times.

300 MILLION DOLLARS is not as much to Marisa Mayer as it is to most people. She was already fabulously wealthy before yahoo. I'm not saying she doesn't want the money, but thinking it's her only or main motivator is naive

No bullshit. Ego plays a huge factor here. I have a high ego and I work competitively, so I am going to be extremely upset if I can't deliver my promises when I sign up for the job. If you are the kind of person that doesn't have high ego for anything you do, be my guest. Would you rather have people mention all the greatness of your accomplishment behind your back or would you want to hear rumors of you getting fired and all the shit work you did? How would you feel if your boss has doubt about your performance? She probably should take a pay cut because she's doing a poor job but I am arguing that some people aren't all about money.

Please don't call my point bullshit because that's horseshit plus we aren't her, so everything here is simply personal perspective.

Have a look at the history of "failed" CEOs. Do they end up back at middle management? How does one measure success in industry? Simple answer: by the size of the check you receive. With $55 million, she could bloody retire and laugh her way to the bank.

Who's shortsighted, here?

This is certainly a factor. Family run businesses are, on average, twice as profitable as those run by salaried managers.

A family owned business is no longer family owned after a bankrupcy. A salaried-manager-run business is usually still salaried-manager-run after a bankruptcy.

Bankrupcy is not the only way to stop being family owned. Walmart and many other major companies used to be a family business. Overall, family's are more likely to think long term and extract money now instead of aiming for growth for growth's sake, both of which promote profitability.

Your fundamental argument seems to be that the board was shortsighted, not necessarily Marissa. No argument here.

This is why I laugh when people want to flock into the software engineering profession, or act like we are well paid. Software engineering is the watch maker of the 21st century.

I can't think of any profession where the demands to compensation ratio is so out of whack. As an engineer you're expected to be exceptionally bright, exceptionally creative (we have to invent new things all of the time), exceptionally passionate, deal with stress (an off-by-one error can cost your company millions) all while living a very middle class life. I'm sure being a brain surgeon is much more stressful and takes longer to achieve, but hey, those people live in neighborhoods I can't afford to go into.

> I'm sure being a brain surgeon is much more stressful and takes longer to achieve, but hey, those people live in neighborhoods I can't afford to go into.

Most doctors and lawyers don't make lots of money in comparison to a reasonably well paid software engineer. There are tracks that will lead to bigger bucks (if lucky) where you essentially sell your soul for the chance to get there. Big law firms have "partner track", doctors and lawyers can start their own practice, and various areas in medicine can still be very lucrative (eg, plastic surgery). Those tracks are all super hard. The equivalent for software engineers is starting a company or seeking a high level position at a large, fast-growing company.

I agree that software as it exists today will change: more people will come into it, wages will go down in many areas. Smart people that want to make more money will specialize (hopefully choosing the right specialization).

As a comparison though, an independent consultant with a reasonably sought after technical specialty can make significantly more money, with less school and regulation, than lawyers or doctors at similar levels. If you start a successful software business (even a tiny ISV with real customers), you can make considerably more than doctors or lawyers, again with less school and regulation. I'm sticking with software!

Almost all doctors will make much more than the vast majority programmers. I think you are underestimating how much doctors earn.

http://www.payscale.com/research/US/Job=Physician_%2f_Doctor... http://www.payscale.com/research/US/Job=Software_Engineer/Sa... http://www.payscale.com/research/US/Job=Attorney_%2f_Lawyer/...

Attorney pay and software engineer pay seem remarkably similar. Physicians earn, on average, double what attorneys and software engineers make. But there's a lot of ways to cut that: engineers can start earning much earlier than physicians can. There is also a much wider gamut in quality, in that some working software engineers are quite bad, but doctors that are quite bad are rightly forced to leave the profession. This arguably skews the average up. Also less ultimate downside risk in software: nobody can take away your right to practice software engineering.

If the question is: "Where can I maximize my earning potential: law, medicine, or tech?" I still say tech. I'd also argue all 3 of these jobs are "middle class professions", but tech has the highest upside for anyone branching out on their own (IE, fortune 500 is not filled with practicing doctors and lawyers).

I don't know, I think it's far easier to get into the 300k range as a doctor than as a software engineer. There are 300k doctors in every city in the country, whereas there's probably only a handful of companies where you can make that much as an engineer.

While the average attorney makes a comparable amount to a programmer, the ceiling on attorney pay is much higher. If you work for a reputable law firm in a large city, you can expect to make $150,000 base, with significant raises annually until the eighth year when it levels out, usually around $250k+ base. If you then make partner, you can of course make much more, e.g. 600k+. Or you can become corporate counsel, and seven figure compensation is not unheard of.

This might not represent the "average" attorney, but there really isn't a comparable track to take as programmer while maintaining the title "programmer."

Regarding physician pay, you cited the average salary of an internist. There are many specialties (orthopedic surgery, cardiology, urology, dermatology, radiology, etc.) that earn far more on average.

FWIW, software engineer track (admittedly mostly limited to SF bay area):

Intern/Freelancer: ~80k p/ year --> Engineer/Consultant: ~150k p/year --> CTO/CEO: ~250k p/year --> post-acquisition or (better yet) profitable founder: $500k-$10M+ p/year.

Sample sizes get smaller and smaller as you go up the scale. To be fair, you're no longer "programmer", but "attorney" can mean so many things at this point, it's almost more like saying "working in tech industry".

Even in the Bay Area, I think this track would be an extreme exception rather than the rule. And the Bay area itself is somewhat of an exception. Vast majority of programmers in this country live outside the Bay Area. Another consideration is that 150K in the Bay Area hardly goes as far as 150K in other locations.

> To be fair, you're no longer "programmer"

Yes, that's my point. To travel your "software engineer track," you need to stop being a software engineer and climb the management ladder or become an entrepreneur to get the big salary bump.

> but "attorney" can mean so many things at this point

I don't know what you mean by this. I referred to attorneys at law firms, who can make $250k+/year for life as attorneys. Or doctors in well-paid specialties, who can typically and reliably make $350k+/year for life as doctors.

What's more, in these fields a person's perceived value actually increases with time and experience, whereas a software engineer's perceived value more resembles that of a linebacker.

A non-specialist physician apparently makes, on average, $195k/year total compensation [1]. This is, as you say, much higher than what the compensation of the vast majority of programmers. While salaries in the Bay Area can be comparable, a doctor's compensation of $195k in Ohio or North Carolina or is equivalent to about $350k the Bay Area.

Specialists earn $284k according to a national average, with some specialties earning far more.

There's really no comparison in what the typical programmer makes versus a doctor, corporate lawyer, investment banker, etc. But those fields are generally much harder to break into, and working conditions can be much worse early on in one's career.

[1] http://www.medscape.com/features/slideshow/compensation/2015...

Just met a doctor who owns three planes all worth more than $200k, one was $500k. My wife used to audit doctors in NC and some of them pulled $1 million a year net. The plane guy is not a specialist and one of the NC doctors was a podiatrist.

They have lots of opportunities for outside income on top of the peasant level $200k. Speaking and consulting and taking bribes from pharma.

> I can't think of any profession where the demands to compensation ratio is so out of whack

Teacher is one that immediately comes to mind. Nurse? Probably. Soldier? If you're deployed, certainly.

I don't think software engineers actually have that high a level of demand, on the whole. Don't get me wrong, many lead very stressful lives but a great many are also coddled with free food and amenities in their office, babysitting relatively static code. Then they go home to their comfortable apartments with smartphone app controlled lights.

Plus every year what we do becomes more and more critical to society. I believe pay will continue to rise. Especially the top precentile.

Another HN article mentioned that top AI researchers get offers comparable to NFL quarterbacks.

Yeah I sort of disagree, but first let me say that I do not think we have it terrible, or that we have the toughest job. What I'm (inelegantly) describing is vs. perception. I don't think people get into the jobs you mentioned for money. Whereas I feel there is this perception that Software Engineer is an elite level paying job, similar to doctors and lawyers.

And I disagree on this; we are (not all of us, I know there are plenty of clock in-and-out engineering jobs) expected to invent new things on an almost daily basis.

I can't think of any other job where you judged based on the number of widgets you produce where you are also expected, again -- almost daily, to produce new types of widgets (that are only vaguely speced for you).

When I think of jobs where people are expected to create new things; I think of architects, fashion designers, and the like.

Machinists, welders, carpenters, trade jobs in general come to mind when I read your statement.

And, to be honest, teachers again. "Here's a curriculum (specs), make a series of lessons (product)".

You mean "here's a curriculum, download the lessons and tests".

Nurses? They average $69K per year, and need 2-4 years of education. 90th percentile salary is $97K (presumably for people in expensive areas, or pulling a lot of overtime). That doesn't seem out of line.

My mom was a nurse, and the thing I noticed about her work was that when she was off duty, she was off duty. Since she was not ultimately responsible for any patient's care, at the end of shift she could just walk out and leave it all behind. If they needed her after that, she got overtime at time-and-a-half, I think. And she got a bit of pay when she was on call, too.

http://work.chron.com/much-registered-nurses-paid-year-6869....

>Teacher is one that immediately comes to mind. Nurse? Probably. Soldier? If you're deployed, certainly.

No, no and yes. Teaching is an incredibly easy job, you barely have to do anything, and you get paid very well. Nursing is more stressful, but still pays quite well.

I think you very much underestimate the job of being a teacher. Do you know any? I do. Their jobs do not seem easy. Could you control a room of 25 inner city teenagers and get them interested in algebra?

I think you very much overestimate it. Yes, I know several. Their jobs are essentially babysitters. Getting paid $80k/year to put snow pants on kids for recess and then take them off again after, and tell them what books to read is an incredibly cushy gig.

> Getting paid $80/year to put snow pants on kids for recess and then take them off again after, and tell them what books to read

So you're talking elementary school teacher, then. An absolute world of difference away from high school teaching.

You just said "teacher". You are suggesting that a profession is difficult and underpaid, and "teacher" is not. If you want to argue just about some specific subset of teachers then make that argument.

My wife is a mental health nurse working with murderers about to be released, preparing them for everyday life in the hope that psychotherapy won't make them re-offend.

That's not a profession that lacks the need to be passionate, or deal with stress (a verbal slip could mean our family is killed) while requiring creativity and years of experience to be effective.

I get to sit on my ass and make over 4 times as much as her.

There are many more professions people could cite, I'm sure.

There are cases where the CEO deserves many millions of dollars. They are supposed to move the business in ways that are growing very fast and profitable.

There are all kinds of startups that Yahoo could have bought or invested in, all kinds of areas that have the potential to be wildly successful. Who would have thought Amazon, a retailer, would be the platform of the cloud computing world.

It's the CEO job to see this, what not everyone else can see. That's what deserves the many millions of $.

Has Marissa Mayer achieved what you say is the job of a CEO, though?

Amazon is an interesting case. With their radical reinvestment strategy of quiet, organic growth, they are the absolute anti-Yahoo. Off the top of my head, I can't think of a single high profile acquisition that Amazon did, whereas Yahoo has a reputation for being the place where the flickrs of the world go to die. Amazon contrasts this with being more like a old economy corporation with merely an internet front. They invest in boring brick-and-mortar logistics-factories, computing-factories and so on that no "true internet company" would touch with a long stick.

Maybe Yahoo has long ago accepted that their only remaining shareholders must be in it for the exciting, flashy news headlines. In that case, they might feel compelled to go for an exceptionally expensive CEO only for the news value, just like very expensive watches are not bought despite their price but because of it. Marissa Mayer then would not have made it if she offered to do the job for half the price, not beating everybody else's CEO spending would have been out of character for Yahoo.

But maybe she did a great job responding to the crises and swerved the ship in the right direction, out of harms way, but just not enough to prevent the crash. Maybe she did a better job than many others would have done. What would you expect them to do... give up?

I don't understand the engineer comparison at all. Every person in her role adopts much more responsibility, takes on a huge risk of failure that can be career ending and they can face a media frenzy that attempts to bash them into the ground. Why would anyone try to compare her salary to an engineers?

You think CEOs fall on hard times when they fail?

I agree they are paid generously and even overpaid, but they deserve to be paid more than an engineer. How much is debatable, but that's really established by the market. I just don't get the engineer comparison.

> but that's really established by the market.

It isn't really, tho. It's established by the compensation committee that is convened by the board and comprises of board members.

Starboard bitched about the compensation committee since it only had 2 members on it, and they were favorable to Mayer (giving her credit for what is effectively a rise in Alibaba).

Starboard got 3 of it's own board members onto that committee now, so the fun times are over.

The conflict of interest in the process has always been that you have your own board members, some of whom you bought into the board, deciding compensation. A lot of these directors are themselves the subject of compensation committees at other public companies - so there is a quid pro quo amongst those who serve on each others boards.

It takes an outside activist investor to break up these friendly and circular compensation cliques.

I like Mayer, but it is really difficult to justify these compensation packages when the core business she is running is performing so poorly. I don't think many people would have any problem with her earnings hundreds of millions of dollars - but only as a portion of gains made by rescuing Yahoo's decline.

I agree people should get rewarded for performance and that there are people often taking advantage, but still the entire ballpark area of pay that she gets is guided by market comparisons. There are other comparable compensation packages out there, she's just getting hammered for hers because of the fall. I don't think it's uncommon for failures to result in compensation packages that cause a public outcry.

If they get sued then potentially yes. Think about Fred Goodwin, ex leader at RBS. https://en.wikipedia.org/wiki/Fred_Goodwin I think there are legal cases coming against him that would need to be paid for, and it is questionable who pays those fees.

Fred Goodwin didn't fall on hard times. He seems to have been directly responsible for some very questionable dealings.

But the bottom line problem with CEO pay is that you get a huge pay packet just for getting out of bed, no matter how badly you do; pay is completely decoupled from performance.

When Leo Apotheker was at HP for just under a year he received $13m in comp, severance of $7.2m, shares worth $3.56m, and a performance bonus of $2.4m - all while losing $30bn in value.

Developers like to speculate about 10X programmers. But ahere's no industry acknowledgement at all that the 0.001X CEO or manager is a real phenomenon. Anyone working at that level seems to be completely protected from business consequences.

In what sense is it questionable who pays the fees? That is exactly what directors insurance is for

I'm not sure how it works; does that insurance still cover you after the event? And if you have made a stupid mistake(not defending or even giving a view about Fred here) you are personally liable, aren't you?

Boo fucking hoo, failure is rewarded with 10s of millions.

Meanwhile the engineers who get fired walk away with nothing.

If you are referring to engineers getting let go in a sale, I would guess that many senior level or higher engineer would get 2-3x salary on the way out the door due to things like accelerated stock vesting plus 60 day WARN act plus a separation package.

I don't know the details, as I'm not a Yahoo employee, but it's not uncommon for that to be the case.

"adopts much more responsibility"

Bleeding a failing company dry with a huge comp package is the complete opposite of taking responsibility. If Mayer stood to lose $300MM of her own money (i.e., money that she had before she joined Yahoo), then we could talk about leadership with consequences.

The comment has context. So read: adopts much more responsibility than an engineer. On a day by day basis she makes decisions that have a more significant impact. She has to cover much more territory for understanding aspects over the whole organization.

But never has to personally take a hit for a bad decision, whereas an engineer could be fired (without a $55 million severance).

Her severance would be due to a sale. There are lots of regular employees that get severance packages when they're let go due to a sale.

What's her severance in proportion to her annual salary along with tenure? The norm for my area/role, as an engineer, is 4 weeks per year of service. So 6 years would get me half a years salary, but you know what - it's only two weeks per year for "lesser" roles in my company such as support.

Skin in the game, lack of it being the biggest problem in modern society--at least according to Nassim Taleb.

Responsibility is nothing in this context without accountability. Accountability is usually pushed down the chain.

This is the reward for ensuring that the ship sinks.

Joking or not - it would be a great move by Google to install her as Yahoo's CEO, drive down the worth of the company, and gather up the ashes for a cheap price.

You mean like Microsoft did with Elop and Nokia?

Nokia did that to themselves, why do people keep blaming Microsoft?

It was the Nokia board that made a bonus clause in Elop's contract if he managed to sell the company.

"Now We Know Why - Nokia's Elop had a $25M personal bonus clause from the Nokia Board if he was able to sell the handset unit to Microsoft"

http://communities-dominate.blogs.com/brands/2013/09/now-we-...

Blame Nokia board, not Microsoft!

If you look at the composition of that board, they were actually the same people on both. So I guess blame Microsoft board/blame Nokia board are both accurate as it's one and the same.

There's enough blame to go around, and ultimately the most to blame was the board. However, Microsoft did play a big role in trying to convince Nokia to get their former VP as their CEO, which was their long con into getting Nokia to adopt Windows Phone, because Microsoft thought a company such as Nokia could surely turn WP's fortunes around.

But yes, Nokia itself was most to blame for its failure to "pee in its pants" and adopt Android when it still had 2x Samsung's market share in phones.

I have my share of insider info as former employee, internal politics played a big role.

Check the The Register articles about the whole Symbian vs Maemo.

The blame for Nokia is complex, but as others have pointed out, there's no lack of blame to assign. Plenty of villains, and some super-villains. Tomi Ahonen's blog has a point of view, but it also goes into greater depth than most coverage of the tragedy at Nokia. I'd recommend it if you want to know what a former insider from the glory days of Nokia thinks.

I am also a former employee, just not one willing to break my NDAs from those days.

I did not read jedmeyers comment as blaming Microsoft for the collapse of Nokia, I read it as pointing out how little value that corpse has to them, murder or not.

Nokia was speeding toward an iceberg before Elop was involved.

The prior Nokia leadership openly mocked the iPhone as a non-threat, and then the company got destroyed by what it represented. Their arrogance was integral in Nokia's suicide.

The only thing you'd ever need to know about Nokia's downfall is represented in this graphic:

http://i.imgur.com/m2pSsHk.png

And this article [2008]:

"Shares of Nokia Corp. fell as much as 10%" ... "Nokia Chief Executive Olli-Pekka Kallasvuo on Thursday brushed off suggestions that Nokia needs to do more to fight back the foray of iPhone onto its home turf, calling it a ‘niche product."

http://macdailynews.com/2008/04/17/nokia_shares_slammed_in_w...

Why would Google want ashes?

So no one plants a new seed

You are not qualified to judge what others deserve. Steph Curry's net worth is $44M and I don't think anybody deserves $44networth for being good at throwing balls through hoops.

But it is market that often determines these numbers and we simply do not possess the information to look at all those variables.

Someone's opinion on what someone deserves in relation to someone else has nothing to do with market value quite often. It's not a hard distinction.

His net worth isn't based on being able to throw balls through hoops; it's based on his ability to attract and retain a huge audience for advertisers.

Yep. To be one of the best at throwing balls through hoops is no small feat, and the market has shown that lots of people will buy tickets and merchandise as a result. Therefore he's worth the $.

It's also a very risky and short lived career.

Doesn't matter. I dont think advertisers should pay that much money to him.

Case in point is that worth of Mayers might depend on far too many factors which we cant comprehend and we must not judge her.

Advertisers are notoriously poor at proving ROI, so you could be right in your assessment of his worth to them. Anyway, if putting a ball through a hoop was a bankable skill, this guy would be a billionaire: https://www.youtube.com/watch?v=oG_DQXEK764

Corporations constantly decide what people deserve. They also have mechanisms for deciding if a high value deal is risky, unnecessary, or poor value for money. Because those rules are flouted when hiring CEO's a huge amount of risk is created. That threat (of a bad CEO) is mitigated by trying to hire and retain "the best", and consequentially the most expensive. It all makes sense because they have you over a barrel.

The problem is that companies are over reliant on a single leadership figure. This makes little sense in large companies with lots of complex divisions and interests. Does it really make sense to rely on a single person to guide the company?

You are not qualified to tell others to not to judge what yet others deserve. Everybody is entitled to (and must) have a opinion and judgment on such issues. Having an opinion is an important function of education and it's an indicator too.

It's altogether different point what market gives to that person. Market generally rewards anyone irrespective of their actual merits, because market works on apparent merits and anyone good at selling themselves succeed.

Ponzi was a very good example of how markets work. [1]

Yahoo as well might have allowed itself to get "ponzied". That's their foolishness and they are paying its price.

[1] https://en.wikipedia.org/wiki/Ponzi_scheme

Edit: typo and added link

Yes, but what happens to his salary if he stops performing individually? Does he get a huge bonus if he blows his ACL? Does he get a huge bonus if the team loses in the first round?

The downside protection afforded to CEOs is ridiculous - heads I win, tails you lose.

I'd love to know who is qualified to judge what others deserve...

I don't see it as direct payment for the job that she's doing, but rather paying to cover her downside risk. An engineer at Yahoo, if they're sufficiently good (and they do exist), can make it to a life raft and continue their career elsewhere.

Marissa likely has no post-Yahoo career. I doubt she will ever have another regular job after Yahoo, and instead after a little while she'll be a board member and have advisory roles at some places. I don't see how there is another CEO role in her future after Yahoo gets ripped apart by an acquiring iceberg.

The money she stands to make is meant to compensate her for that scenario. It's also meant to be a deterrent to proceeding with a sale in the first place, although I think it will prove to be insufficient.

55M is an absurdly big life raft.

OK. The takeaway from this:

As a CEO, you can screw up a company -- as a result, the employees and shareholders. However, the CEO's future must be secured.

Not bad.

There aren't daily HN threads with hundreds of people bashing the employees. The employees aren't walking into every job interview as "the person that killed Yahoo."

We like to hold CEOs accountable for failures (i.e. they may never work again). Nobody who can help it is going to take that gig unless they know they're set for life in case of failure.

What downside risk is worth 55M ? She don't risk her life. Why couldn't she have a regular job and a normal life after being yahoo CEO ?

55M is the price for not realizing the (in)competence upfront.

I see it as she negotiated it into her compensation package, so she gets it. They wanted her, that was the price to get her.

Let's say you are 30 and you earn quarter of a million a year. I think that's pretty good. You will likely end your career, if you do well, on half a million a year.

If you were given $55 million and left tomorrow, then never worked again, by the time you hit 60 you won't have spent even half of it.

Frankly, $55 million is an obscene amount of money.

But Yahoo was going to be an albatross for any big name that took it. She was a big and rising name in SV for a long time. I think she knew that she was likely selling all of her potential future for this so she took the gamble with her reputation by not gambling with her finances.

That being said I still don't think she did a particularly good job even given where she started, but you never know that about a person until they get to sit in the big chair.

> Yahoo was going to be an albatross for any big name that took it.

No, that is the 55,000,000.00 question.

I don't understand what point you're trying to make with this comment. I don't see anyone here attacking her, in fact only in the article does anyone bring up her specific performance.

In fact you seem to be saying she did not do a good job yourself as you put this defense of "ceo can't do much and this ceo had bad luck"

So what has she done to earn $55 million dollars? Without attacking anything about her personally, in the role of her job, did she do a good or bad job? I think a bad job or at most neutral job. In fact in writing this comment I looked at her bio and I came away really impressed, but at the same time Yahoos stack ranking wasn't popular, Tumblr I think was a fail move. Do I think anyone could have done a better job then her? I don't know...digital ad sales is huge but as a single person I don't know how much impact you can have.

Could they not have found someone else to go down with the ship for less then $55 million (say $5 million) or is 50 million just so little money for a large company like Yahoo that people who offer hire ceo just don't give a fuck about the difference between the two numbers.

> Could they not have found someone else to go down with the ship for less then $55 million

I'm available. I'd do it for $54m.

Edit: Oh, who am I kidding. I'd do it for $50m.

Unless they've publicly choked a puppy to death or donated to right-wingers exclusively, anyone who advances the current Zeitgeist is not going to be judged too harshly, especially since Yahoo was already in deep trouble and her only sin appears to be she isn't their savior.

No. Yahoo has been a company on a downward trajectory for s long time. It's not easy to find a CEO who wants to take that on

But I bet she's far more competent than most of us.

Pretty sure that anyone could sit on a pile of Alibaba stock and just do nothing, and come out ahead of where Yahoo is today.

This payout actually incentivizes her to want to be ousted, and that doesn't bode well for any of the rank-and-file.

> Pretty sure that anyone could sit on a pile of Alibaba stock and just do nothing, and come out ahead of where Yahoo is today.

I'm willing to stipulate this. It's worth pointing out that it's usually very difficult for people in highly politicized roles to just sit and do nothing, even when that's obviously the right thing to do and they would personally like nothing more.

Also, it wouldn't have been at all obvious at the time that doing nothing had a mentionable chance of ending better than sincere efforts to guide the company.

Ehhh... when over 100% of your company's value is in cashlike financial instruments that it owns, it should be obvious that there's a chance doing nothing will pay better than trying to do something. The size of that chance may not be obvious, but the presence should be.

I wish there were an update to https://en.wikipedia.org/wiki/Peter_principle

I've said in other threads that Marissa is the highest profile example of this principle.

When they published the new logo design of Yahoo I came to the same conclusion. A stunningly professional answer to the wrong question. Mayer might be - and I emphasise "might", as I don't know enough about her - the archetype of the engineer who executes the wrong programme without flaw.

http://i.imgur.com/3Cq2bGP.png

By the same token, she could have fired all the rank and file on day one and sat on that pile of stock all by herself.

Quite; she seems to have chosen the worst course of action for everyone but herself.

No writes "expert in converting investors money into my own" on their CV but it is the main skill of most CEOs these days.

> Pretty sure that anyone could sit on a pile of Alibaba stock and just do nothing, and come out ahead of where Yahoo is today.

No. You're not privy to the details. Neither am I. It's easy to discount someone for a public failing, but imagine yourself in her shoes. Unless you're a bored corporate exec of a Fortune 500 company, I highly doubt you have the management and financial acumen to keep Yahoo! afloat.

Neither did she, that's the point.

Would many investors preferred this course of action at the time that she was hired?

Personally, I have been thinking for a very long time that any investment in Yahoo was an indication of a very special mindset. A dotcom bubble reenactment society that part-times as a real company. In that light, the weirdest things can make sense.

> Mayer wasn't lucky. But I bet she's far more competent than most of us.

Quoting from http://www.businessinsider.in/Marissa-Mayer-will-make-365-mi... :

> Only about 3.3% of her projected $365 million compensation package is tied to Yahoo performance, and that's the company's annual target bonus of $2 million.

That would make one say that she is way too smart. Competence is another thing.

I think they fucked around too long in hiring her, to the point where even people who initially supported Product-Led-Yahoo would have preferred to keep the Media-Led-Yahoo of Ross Levinsohn.

Personally, I think it was obvious what Yahoo! should have done, at least from ~2005 onward: become a brand/site for a specific cohort of people as they moved through life. No young people use Yahoo!, nor should they be pursued; just have Yahoo! provide an evolving set of products for their existing userbase. Yahoo! might have gone back even more and taken the even-older-people market who were on AOL still, or found other sites targeting 50-80 year olds vs. Yahoo!'s core 40-50 market.

Buying Tumblr (which I dislike, personally; maybe too "young" for me?) was Mayer's dumb move. Everything else was either good or benign.

Building decent mobile apps, maybe a mobile platform or other platform, etc. around existing Yahoo! services to support old Yahoo! users would make sense.

My other strategy would be: Yahoo! for rural/small-town/etc. people in the US, and Yahoo! for black (older; not youth culture/urban culture, but middle class older black people), hispanic middle aged/family/etc., or other minority groups outside the mainstream. Yahoo! for black people, with an HQ in Detroit, Atlanta, New Orleans, Houston, etc., and Yahoo! Lat Am in South/Central America (and/or Miami) would be a way to move forward with new-to-Yahoo! people. Don't go after the silicon valley tech crowd (hyper competitive, tech based); a media strategy around other groups would have been viable. (and still might be)

Mayer was totally the wrong person for that strategy. Oprah Winfrey would be the ideal "Yahoo! for black middle-aged people" leader; I'm sure there were other people.

(My first move if I bought Yahoo! today would be to relocate the headquarters to either the midwest or Atlanta; anywhere but SFBA. Las Vegas might even work, but somewhere like Branson or St. Louis would make sense. Also makes it easier to do the mass layoffs. The Bay would be full of purple blood, unfortunately.)

Being a brand for a specific cohort is a slow-death strategy, not a growth strategy. I don't think many people invested in Yahoo would prefer that to a high-risk strategy with a plausible upside.

That age cohort doesn't have the same Internet penetration as 20-30 year olds today. Even if boomers are declining in numbers now due to death, you can get a larger percentage of boomers on the Internet, and they can make more use of it.

(The racial/ethnic minority markets, especially older people, are also dramatically under-saturated, so there's a huge amount of growth opportunity there.)

And at some point slow-death while maximizing profits from each user actually is the right strategy for a business. I suspect Netflix DVD-by-mail business is largely operating on that model now.

I am a very happy customer of Netflix's DVD service, because I can get movies and shows that aren't easily available any other way.

> Personally, I think it was obvious what Yahoo! should have done, at least from ~2005 onward

> No young people use Yahoo!

No one here used Geocities when they were younger? Yahoo! Chess? Yahoo Games?

Yahoo was incredibly relevant with the young crowd in 2005. Indeed, Yahoo still owns the young crowd as the steward of Tumblr and Flickr.

Internet comments these days. I can't even...

Geocities was shuttered before "young people" today started using the Internet (and was dying for years before that). I also doubt most 0-22 year olds today ever played Yahoo! Chess or Yahoo! games -- they were popular with people my age and slightly younger, about a decade ago.

Tumblr was an acquisition, and a very expensive one, which would not have been made by non-Mayer person following my strategy. Young people do not, generally, use Flickr (at least in the US); they use Instagram or Vine/etc.

(In 2005, what Yahoo! should have done was different than what Yahoo! should have done in 2013 -- in 2005, it still had a reasonable array of options. By 2013, the olds strategy was probably the most viable operating strategy, although even then, massive cost cutting and redistribution of Alibaba winnings to shareholders might have been the most preferred outcome.)

> Geocities was shuttered before "young people" today started using the Internet (and was dying for years before that).

Yeah. Because young people in 2005 are now like 20 to 30 somethings today. That was 11 years ago man. A 35 year old today who was really into Geocities back in its prime was a 24-year old young person (although Geocities prime was really closer to early 2001 or 2002).

In any case, I fondly remember the awful Neopet communities with awful gifs and everything that I used to browse on Geocities. Anyone remember "Webrings" ??

Now I admit, 2005ish was when Xanga and MySpace started to take over (Facebook was a "college" thing, and not really relevant to high-schoolers at that time). But Geocities was still relevant at that time.

> Yahoo was incredibly relevant with the young crowd in 2005.

As a college freshman in 04-05, I have no idea what you're talking about.

It could be true, but it certainly isn't obvious.

Yahoo! Chess was really fun back in 2005. Lots of blitz games and trolling sore losers who lost won positions on time. These days chess sites are too civilized to be fun.

For the money they paid her she should have been much more lucky. Race horses aren't applauded for their competence, elegant walks and good looks. They need to win.

If one has great success once, it's possibly luck. When it's 3 times, there's something else going on. Jobs did it 3 times (Apple, Pixar, Apple again). Gates also did it 3 times (microcomputer BASIC, DOS, and 32 bit Windows).

Is Amazon's success due to Bezos or luck? I prefer to bet on Bezos rather than luck.

I don't understand why this had been downvoted. I support this.

Amazon has been successful far more than 3 times, all under Bezos, so it's pretty clearly not luck.

Aws was an absurd success, no one saw it coming except bezos

There are so many companies out there that the chances of a few of them being lucky 3 or more times in a row are very high.

People are bad at statistical reasoning.

Early in her tenure Mayer spent days tweaking the Yahoo! logo. A bad "sign" to be sure.

In retrospect I'm not sure she placed the exclamation mark at the right degree of whimsy at all. 3 degrees left and Yahoo would be in a very different place right now

Isn't that a very long-winded way of saying that the quality of "managerial practices" are essentially irrelevant to outcomes?

I don't disregard the "Luck" Factor but in that case I think it boils down to how many steps you take to fix the situation. I think in the timeframe, it should have been possible to take more steps to make Yahoo a focused business. It does seem Tumblr acquisition was step in that direction but sadly, it lost its charm similar to Yahoo's past acquisitions.

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