Regardless, objectively Yahoo failed and she bears a large share of the responsibility. Absurd reward for botching a lot of the sale, operations and core of that company. I think she tried hard but man I wish I got 9 figures for effort.
Frankly, she did what she was supposed to do: sold the company, satisfied Carl Icahn, and improved internal morale. From what I heard anecdotally, she took an internal culture of rot and at least made it a place where people didn't dread going into work every morning. It's kinda like she pulled the teams out of the swamp, and rested them on a muddy, cold bank of the river. At least they weren't drowning anymore.
The pivot to mobile-first was a big deal, internally. They really lived and breathed that change, as is evidenced by the tremendous amount of engineering they put into simple things like their mobile weather app. It didn't ultimately work, but it was the right direction to be going, honestly.
Was it all misguided and doomed from the start? Sure! Yahoo! was the new AOL, and it was a miracle the company didn't get sold off to a media firm. But then, Verizon is kind of building its own media arm, and it already owns AOL. The fact that anyone bought Yahoo is a testament to Marissa's leadership. Would you have bought it, given the opportunity? I probably wouldn't have either. But she made the sale. If nothing else, that golden parachute is a commission just for ending the damn place as a going concern.
One of the things that really killed Yahoo, that no one talks about, is that they had these security people called Paranoids. They were great, super smart, always available, BUT, they held sway over everything and it was very very easy to just say, "naw, forget that 6 months of work, throw it all away, the Paranoids say we can't put it on production machines."
This was evidently an entirely acceptable thing to happen, internally, and it's why so many things were killed. It's also why you don't hear about constant data breaches at Yahoo! anymore, though.
I'm pretty surprised to hear that Yahoo had a security team with that much influence, given their leak of over 1bn accounts and subsequent failure to disclose that information for 3 years.
https://www.theguardian.com/technology/2016/dec/14/yahoo-hac...
I'm surprised Yahoo cared that deeply, but blaming that team for its failure is completely missing the point.
Did this group of Paranoids hold product-blocking sway after or before the highly publicized Yahoo! hacks? Lose-lose no matter which branch of the analysis tree we traverse.
https://www.cnet.com/news/lord-of-the-paranoids-new-yahoo-se...
Curious to hear more on this. Yahoo! was a disaster before she came in, she tried some things to turn it around, it didn't work.
One of the arguments for this kind of compensation in this situation is that you want the CEO to take a risk to try to turn around the company. A high profile "failure" like this also means she won't be able to get a job for awhile so you're compensating her for that.
The problem is that we don't know what the alternate universe holds, where a different CEO was brought in. It might be that that most likely scenario was that Yahoo! drops to $0 and Marissa actually made $5B for investors that an average CEO would not have made (in baseball terms her VORC [value over replacement CEO] was $5B).
A high profile "failure" like this also means she won't be able to get a job for awhile so you're compensating her for that.
Edit: I'm not angry at Mayer at all, I just don't understand why companies agree to golden parachute deals like this for failure. She took a career-ending risk, that's worth some compensation, but the scale seems disproportionate.
Because "the company" that decides is the board -- and these people rub each other's backs...
$180 million for "not being able to get a job for a while"?
Pure speculation, but I highly doubt that someone as highly touted as Marissa Mayer will be out of job offers for quite some time. A lot of people will attribute the failure to turnaround Yahoo on Yahoo itself rather than on any of the reported shortcomings of the CEO.
Certainly, I think the odds were stacked against her, but if the stories from various reports from inside sources and journalists over the last few years are true, I'd be cautious about absolving her responsibility from the eventual outcome.
- making a personalized/customizable search engine.
- making a browser, in hindsight maybe they could've worked with Brendan Eich on brave.
- structure like Google with subsidiaries (even if not formally) and have technology and entertainment as 2 businesses.
- really tighten up security on the tech side; damn.
Then see what works and iterate. Selling Alibaba and Yahoo Japan at the end of this; Yahoo basically had negative value.
IDK, selling to Verizon and then having your value slashd-- Twice, when multi hundred million accounts are breached and getting raked over the coals on valuation was a sad finish. To her credit; I like to believe the sale was poor because she wanted to keep going and didnt expect to have to firesale the firm, but I don't know. Obv. Yahoo wasn't "just her" but they were in a poor state so she probably had a lot of operational latitude. It's super rare; if it even ever has happened; that a company is so desperate but still so powerful-- that they give up that much control. Being a total outsider and having those resources and a canvas not blank, but so f*Ed that you can really try anything; that's once a decade maybe.
A browser like Brave would have been a good move, particularly in junction with tightening up security on the tech side. It would be like doing community service to try and right the wrongs of the past, or something, ha!
The problem I saw with Yahoo! was that it was a business with no focus. They acquired Tumblr... and then did nothing with it, which was perplexing. Tumblr has a youth market, and if Yahoo! had actually done stuff to improve the Tumblr experience, they really could have put that $1 billion they wasted in acquisition to use via marketing/ads. Hell, maybe they could have somehow capitalized on Vine folding and turning Tumblr into a bigger video platform (the layout loans itself well to it.)
I also think we agree that there was a lot of verticals to explore and strategies to employ but hers turned out to not be a good one. I think it was possible
Tumblr acquisition was great theoretically, but the social interaction has changed to more rapid social platform like Instagram and Snapchat by the time the acquisition went through (I used to use Tumblr daily with my ex-girlfriend and it was our preferred social platform).
I believe those series of acquisitions were made just to bring on multiple mobile-experienced teams into Yahoo. The product didn't matter, but hiring teams of proven Mobile-UI/UX/Devs did.
What exactly did she try? Because I haven't seen any effort but BS from Yahoo all this period.
EDIT: Haters out in force I see. The share price was $16 when she started. It's now $48. It's irrelevant what she did or didn't do to get that. That's the fact, and that's what matters to her employers, the shareholders.
Why shouldn't she be compensated for a 200% increase? The company's long term survival is a goal that may have never been shared by the actual owners.
Here's one of many Matt Levine pieces that explained the Yahoo/Alibaba situation, although it's now dated: https://www.bloomberg.com/view/articles/2015-01-28/yahoo-wou...
I hadn't been following Yahoo that closely, but was vaguely curious about the whole Alibaba angle, thanks for linking that article
By allowing those shares to accrue and not doing anything stupid at the wheel, she did her job. Whether or not it's fair or worth her comp, is irrelevant.
The shareholders valued her work at a set amount and that's what she was paid.
Unless you're taking an economic stance on the issue, wherein you believe shareholders are messing up future incentives and economic prosperity by recognizing and rewarding CEO's that do the bare minimum of "just don't fuck it up," or something similar, this debate is impractical.
Just because she resorted to something other than organically growing the business to increase the value to her shareholders doesn't mean she's a failure. We're all assuming that her job was to "save" Yahoo. I don't think that was ever really on the table.
> she resorted to something other than organically growing the business to increase the value to her shareholders
Parent comment:
> and such stock was acquired before she became CEO
She didn't do "resort to" anything. Yahoo made that money from an action a previous CEO was ultimately responsible for. If you want to be really generous, you could praise her for not selling the stock—but if we're praising CEOs for every way they choose not to change the companies they come into, then my pet rock would make an awesome CEO indeed.
You have to give her credit where it's due: she saved the Alibaba partnership from that total fuckup, Carol Bartz. CB was such a fuckup, that she's the sun to Marissa's candle. She insulted Jack Ma in front of his underlings when he came calling to Sunnyvale. She refused/forgot to put someone on BABA's board and totally ignored Ma. As a result, Ma said 'fuck you' and took Alipay out of the group without even telling Bartz.
I wish more people looked at the period preceding Marissa (Bartz, Thompson) and they'd realize that Mayer was a Godsend compared to the cabal of clowns running Yahoo before her.
Her job, presumably, as the CEO was to convince all of the enterprise's employees and customers that Yahoo would be sticking around for the long run. At the same time, she had to prepare to wind down the business while returning capital to the shareholders. I would call that a difficult job.
My lesson from this is most companies with excess capital should make investments, not acquisitions. Most certainly a company with a long string of failed acquisitions should. Yahoo has been repeatedly given as an example, but others like Google don't have a particularly great record either. Berkshire Hathaway is a great example of a massive business centrally owned by a very barebones team (in Omaha.)
Haters out in force I see. The share price was $16 when she started. It's now $48. It's irrelevant what she did or didn't do to get that.
The goal of a resurgent Yahoo seems to only have been one shared by outside observers.
When does this ever end