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.
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.
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.
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.
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....
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.
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.
So you're talking elementary school teacher, then. An absolute world of difference away from high school teaching.
Another HN article mentioned that top AI researchers get offers comparable to NFL quarterbacks.
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!
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...
They have lots of opportunities for outside income on top of the peasant level $200k. Speaking and consulting and taking bribes from pharma.
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).
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.
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".
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.
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.
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.
> 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.
Please don't call my point bullshit because that's horseshit plus we aren't her, so everything here is simply personal perspective.
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.
Who's shortsighted, here?
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 $.
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.
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.
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.
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.
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.
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.
No, that is the 55,000,000.00 question.
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!
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.
Check the The Register articles about the whole Symbian vs Maemo.
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...
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?
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.
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.
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.
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.
Meanwhile the engineers who get fired walk away with nothing.
I don't know the details, as I'm not a Yahoo employee, but it's not uncommon for that to be the case.
But it is market that often determines these numbers and we simply do not possess the information to look at all those variables.
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
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.
It's also a very risky and short lived career.
The downside protection afforded to CEOs is ridiculous - heads I win, tails you lose.
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?