Woah, holy shit, a $90M exit package? It's like Bighead in the Silicon Valley TV show, except 4.5x more. The writers for that show picked a crazy number and reality comes along and over-quadruples it. Granted, Bighead did not create Android, or anything, in the TV show. But an severance package of that size is still absolutely ridiculous.
https://money.cnn.com/2017/06/13/investing/yahoo-marissa-may...
I have a suspicion that corporate executives are Veblen goods [1], which makes their price/wage behavior somewhat economically counterintuitive. When a company's board hires a new CEO, the primary return to the individual director who puts forth the candidate is in social status. They want to be seen as having made a bold, risky move, and having the social connections to pull it off and get their candidate approved. (The idea that the board acts to maximize shareholder value is a legal fiction only; people make decisions, not laws, and unless the shareholders can bring a successful shareholder lawsuit the individual people will make the decision that maximizes their own personal utility.) That means that the more a candidate already makes, and the higher their profile in the business world, the more they can command in compensation. On the way out, all participants are again motivated by status - a lengthy wrongful termination lawsuit damages the reputations of everyone involved, and so all parties have an incentive to spend more shareholder money to avoid it.
Uh, so which is it? Did Mayer:
A) Change yahoo’s trajectory from positive to negative, thus “running it into the ground”
B) Yahoo was running into the ground when she took over
For the crime of failing to turn around the cluster fuck that was 2012 yahoo, I guess Mayer is forever destined to be HN’s punching bag.
I believe Yahoo was in real trouble when Marissa Mayer was hired and there are some decisions she made that were clearly wrong in hindsight. I don't feel qualified to judge her performance in detail but 260M$ is a glowing endorsement which seems entirely disconnected from the reality of what happened during her tenure.
If the article is factual she was compensated $260M for turning in a performance that could have gotten a minimum wage grocery bagger fired several times each month.
C) getting paid $260M to take over Yahoo as it was "running into the ground" despite her not turning it around from "running into the ground".
Why should they pay her $260M for not changing the overall outcome of the company? They could have hired just about anyone for a miniscule fraction of the price and seen the same outcome.
However, as Steve Jobs once said [1], somewhere between janitor and VP reasons cease to matter, and results are all that matter. And the fact is that she was hired to turn around Yahoo as an operating web property, but by the time Verizon bought it, Wall Street was valuing Yahoo's operations (less its Alibaba holdings, which Jerry Yang bought in 2005) as negative.
I'm pointing out that there's a certain irony that even when executives get fired for not doing the job that they're supposed to do, they still get paid nearly as much as if they had actually done that job. A board that's actually trying to maximize shareholder value might pay a lot for an executive, but would structure their compensation deal so they only get that payout if they actually succeed at the job they're hired to do.
[1] https://www.businessinsider.com/steve-jobs-on-the-difference...
I completely agree with what you're saying, but also in her case those shares might be worthless given the circumstances.
If you receive a large pile of stock/options which you can immediately begin selling off then the long term prospects for the company are largely irrelevant to you.
Also, IIRC the Yahoo purchase was a stock swap for Verizon shares. Those are publicly traded, so she can always liquidate her holdings at whatever the current VZ price is.
Imagine how much wealth Android has generated for Google.
This assumes that, for example, when he became an SVP, he was still on any sort of standard employee agreement.
That is highly unlikely.
Almost all execs at that level in that large a company would have a specially negotiated agreement. Most still end up with something even if terminated for cause.
Almost all their exits would be specifically negotiated mutual separation agreements.
(I'm not defending the above, obviously, just explaining what i expect is the case based on experience)
Also worth pointing out: don't know when he was made SVP/etc, but it probably predates any pushes to change any of this in tech. :(
> Google could have fired Mr. Rubin and paid him little to nothing on the way out. Instead, the company handed him a $90 million exit package, paid in installments of about $2 million a month for four years, said two people with knowledge of the terms.
However I don't know if that's just opinion or based on some set of facts about his situation.
My wife works in HR (not at Google, but in tech and other industries), and has handled things like executive compensation/retention/etc. She has done many of these types of situations over the years.
She was doubtful they would have been able to pay him nothing.
I've also seen a bunch fly by on the legal side over the years, and most (but not all) that i've seen would have paid out something in a case like this.
Best guess as to the 90 million was that it was not about this, but stock payout in exchange for not competing with google for a while or something.
You know more about the market in the Valley than I do, but I am surprised to hear the suggestion that anyone at the SVP level would have negotiated severance on for-cause termination.
(The point you made subsequently, about him maybe having locked in some amount of comp in exchange for non-compete, makes more sense.)
Again you know this stuff way more than I do. I'm just sort of probing here.
The causes in for-cause termination generally have to be listed.
Here's a sample clause: http://www.elinfonet.com/prov/14
You will see that for example, these sample clauses (which are not uncommon) say nothing about morals except conviction of a crime of moral turpitude.
Sometimes they say stuff about code of conduct violations, etc. But that's a fuzzier area (particularly since most companies revise their codes of conduct constantly).
But Rubin probably wasn't terminated for cause, but nudged to resign.
> The $90 million was for Google to keep the story quiet and to keep Rubin from working for a competitor.
The $90 million was probably to prevent a protracted legal battle Google wasn't guaranteed to win; senior executives typically have fairly strong exit guarantees in individual contracts; people talk about it being hard to fire people under union contracts, but doing so under executive contracts (without paying the pre-negotiated severance and adhering to the likely-present mutual non-disparagement clause) is at least as difficult.
I disagree. It all depends on what the cause is. Regarding sexual harassment which today means any woman can accuse you of that and no questions is asked and you'll get sacked is not a valid reason for not getting any money imo.
This is kind of like figuring out that coal provides good energy output and then someone saying you "created the industrial revolution".