Yahoo spends $58 million to fire its chief operating officer • Hacker News Board

Re: Yahoo spends $58 million to fire its chief operating officer

#81

Post by sentientmachine » Thu, Apr 17, 2014, 4:17 PM UTC

kolbe wrote: post #45

bedhead wrote: post #34

It's really sad how wildly distorted executive compensation has gotten. The best phrase I heard was "entrepreneurial reward for managerial duty", and I fear it's become all-too-common. My eyes popped out of my head recently when I saw that Coca-Cola (yes, that same drink company that's done just fine for over a hundred years and whose organic growth rate might be 1% if they're lucky) was trying to give management $13…

Side note: asset bubbles pop. Executive pay is not an asset. I don't know where you work or what you do for a living, but I've heard a similar rant about executive pay from hundreds of people, whereas I've only ever seen a handfull of people trying to do something about it. So, I propose to you, if this hurts your sensibilities so much, what are you doing about it? Are you continuing to feed the machine by working as…

You say Executive pay is not an asset. So if an executive owns the deed to a house, you'd agree that's an asset, but if the executive maintains a skill to be hired for 200k/day, that this is not an asset?

Doesn't an executive's ability to convince a company to pay 200k/day fluctuate based on market forces just like how people price homes or tulip bulbs?

Re: Yahoo spends $58 million to fire its chief operating officer

#82

Post by stingraycharles » Thu, Apr 17, 2014, 4:17 PM UTC

smackfu wrote: post #50

If you're the COO, and most of your compensation is in stock or bonuses related to the stock price, and the stock nearly triples during your reign (15.92 to 41.07)... you're going to get a big payout. I also don't really buy that firing him cost this much, since much of it seems to have been a sunk cost. That stock was going to vest eventually whether he was fired or not, it just vested faster because he was fired.

This needs to be higher on top, because it appears to be a point many people are missing.

Re: Yahoo spends $58 million to fire its chief operating officer

#83

Post by Florin_Andrei » Thu, Apr 17, 2014, 4:20 PM UTC

kolbe wrote: post #45

bedhead wrote: post #34

It's really sad how wildly distorted executive compensation has gotten. The best phrase I heard was "entrepreneurial reward for managerial duty", and I fear it's become all-too-common. My eyes popped out of my head recently when I saw that Coca-Cola (yes, that same drink company that's done just fine for over a hundred years and whose organic growth rate might be 1% if they're lucky) was trying to give management $13…

Side note: asset bubbles pop. Executive pay is not an asset. I don't know where you work or what you do for a living, but I've heard a similar rant about executive pay from hundreds of people, whereas I've only ever seen a handfull of people trying to do something about it. So, I propose to you, if this hurts your sensibilities so much, what are you doing about it? Are you continuing to feed the machine by working as…

Historically, when too much power migrates towards the top, the only way to restore balance is via some sort of violent commotion. But perhaps things have changed now - at least I hope so.

> what are you doing about it? Are you continuing to feed the machine by working as one of their employees? Are you participating by trying to create an aqui-hirable startup? Or are you pushing to enact change?

The nature of this imbalance is a positive (self-reinforcing) feedback loop. Power begets power (and lack of it begets a deeper deficit). Again, we're back to square 1 - explosive social upheaval.

Human nature sucks.

Re: Yahoo spends $58 million to fire its chief operating officer

#84

Post by krjeidj87 » Thu, Apr 17, 2014, 4:21 PM UTC

smacktoward wrote: post #75

nrao123 wrote: post #66

Earlier quoted context omitted.

Here is Marc Andreeseen's interesting take on why exec compensation maybe high: Conventional theories of exec compensation being so high either (1) what market can bear or (2) board/mgmt agency problem out of control. Alternate theory is exec comp so high as insurance policy against catastrophic visible public failure; exec firings can be career ending. From this standpoint, top exec especially at highly visible and…

Or there is the simpler explanation that executive compensation is high because there's nothing to stop executives from looting their companies anymore. The traditional forces that would have restrained them (public shame, strong boards, shareholder conservatism, labor unions, tax consequences, etc.) are all at historically weak levels today, so there's nothing stopping executives from raiding the cookie jar. And eac…

Wrong. Board of directors, who are elected by company shareholders, can limit executive pay. They do this constantly. I'm assuming you're very new to this.

Re: Yahoo spends $58 million to fire its chief operating officer

#85

Post by Florin_Andrei » Thu, Apr 17, 2014, 4:24 PM UTC

wpietri wrote: post #67

kolbe wrote: post #45

Earlier quoted context omitted.

Side note: asset bubbles pop. Executive pay is not an asset. I don't know where you work or what you do for a living, but I've heard a similar rant about executive pay from hundreds of people, whereas I've only ever seen a handfull of people trying to do something about it. So, I propose to you, if this hurts your sensibilities so much, what are you doing about it? Are you continuing to feed the machine by working as…

Regarding the first bit, bubbles: executive pay isn't an asset. Executives are the asset. And given the enormous historical run-up in executive pay, it's not unreasonable to ask whether it will return to its earlier baseline. It's different than the typical asset bubble in that most of the people setting executive pay are also executives. But it could still just as well be a bubble.

> executive pay isn't an asset. Executives are the asset.

If so, it's a special kind of asset, that can dictate the conditions of its own "usage".

Re: Yahoo spends $58 million to fire its chief operating officer

#86

Post by mbreese » Thu, Apr 17, 2014, 4:26 PM UTC

krjeidj87 wrote: post #84

smacktoward wrote: post #75

Earlier quoted context omitted.

Or there is the simpler explanation that executive compensation is high because there's nothing to stop executives from looting their companies anymore. The traditional forces that would have restrained them (public shame, strong boards, shareholder conservatism, labor unions, tax consequences, etc.) are all at historically weak levels today, so there's nothing stopping executives from raiding the cookie jar. And eac…

Wrong. Board of directors, who are elected by company shareholders, can limit executive pay. They do this constantly. I'm assuming you're very new to this.

Just because they can doesn't mean that they do. Or that they are as effective at limiting pay as they were in the past.

Re: Yahoo spends $58 million to fire its chief operating officer

#87

Post by aqme28 » Thu, Apr 17, 2014, 4:29 PM UTC

ChuckMcM wrote: post #71

bedhead wrote: post #34

It's really sad how wildly distorted executive compensation has gotten. The best phrase I heard was "entrepreneurial reward for managerial duty", and I fear it's become all-too-common. My eyes popped out of my head recently when I saw that Coca-Cola (yes, that same drink company that's done just fine for over a hundred years and whose organic growth rate might be 1% if they're lucky) was trying to give management $13…

Let me play devil's advocate for a minute. The guy's cash compensation, $500k. That is a about 2x what Google pays their top engineers (about $250k) The rest of his package was stock. [1] The compensation theory goes that if you do well the stock will do well, if you do poorly the stock will do poorly. So most of your compensation is a chunk of stock, in this case about 2.5M shares as "RSUs" (a restricted stock grant…

I have no problem with stock compensation, but why so much equity compensation? 1.5M shares in restricted stock is mind-bogglingly unnecessary.

And even if you factor in taxes, he got a heck of a payday.

Re: Yahoo spends $58 million to fire its chief operating officer

#88

Post by waylandsmithers » Thu, Apr 17, 2014, 4:31 PM UTC

chengiz wrote: post #37

stackcollision wrote: post #23

Earlier quoted context omitted.

From what I've heard, this is because many Asian countries have a culture of information flashbang. The Yahoo homepage is extremely cluttered and busy, which fits in with what they expect. The Google homepage, in contrast, is just an empty abyss they can't get anything from. Here in the States we seem to value minimalism, which might be one of the reasons people go to Google (aside from it being a great search engine…

Why are you comparing homepages when the discussion is about email? This is completely wrong. Most of it is just history. Gmail doesnt value-add anything to people who are content with folders for their email. In fact the labels, conversations etc confuses them. Yahoo mail in other words has less clutter, not more. (And I'm not talking of the look of the page here, but the actual email functionality).

I think the assumption was that the users go to the homepage where they can access their email plus tons of news/traffic/weather/sports/etc.

That being said, the factors that lead to which service a person chooses for email are probably much more complex than just this.

Re: Yahoo spends $58 million to fire its chief operating officer

#89

Post by saraid216 » Thu, Apr 17, 2014, 4:35 PM UTC

RighteousFervor wrote: post #63

SandB0x wrote: post #61

Earlier quoted context omitted.

Can you point out three insightful comments from below the Washington Post piece? (Time of posting ~16:19 GMT.) I'm seeing the standard "1%" and Disgruntled of Tunbridge Wells type comments that you see under every newspaper article and not a great deal of insight.

Overall, the comments there are a more enjoyable read.

Did you seriously jump from "insightful and succinct" to "enjoyable" the moment someone challenged you?

Re: Yahoo spends $58 million to fire its chief operating officer

#90

Post by _delirium » Thu, Apr 17, 2014, 4:45 PM UTC

nrao123 wrote: post #66

bedhead wrote: post #34

It's really sad how wildly distorted executive compensation has gotten. The best phrase I heard was "entrepreneurial reward for managerial duty", and I fear it's become all-too-common. My eyes popped out of my head recently when I saw that Coca-Cola (yes, that same drink company that's done just fine for over a hundred years and whose organic growth rate might be 1% if they're lucky) was trying to give management $13…

Here is Marc Andreeseen's interesting take on why exec compensation maybe high: Conventional theories of exec compensation being so high either (1) what market can bear or (2) board/mgmt agency problem out of control. Alternate theory is exec comp so high as insurance policy against catastrophic visible public failure; exec firings can be career ending. From this standpoint, top exec especially at highly visible and…

Wouldn't the fourth theory only make sense if companies routinely hired executives internally? In the old model of "assembly-line worker eventually works his way up to Ford CEO" I could see high compensation at the top being used as a kind of carrot to keep people motivated about climbing the internal career ladder, instead of jumping elsewhere. But afaict most companies nowadays don't hire execs from internal candidates. The COO in question here, for example, was not a Yahoo employee prior to being brought in as COO (he was hired away from Google, not promoted from within Yahoo).