Thursday, April 27, 2017

Nice Work

Marissa Mayer probably has gotten more than her share of media attention in part because she was a relatively young woman (such attention can be good and bad, but still reflects something Bad about the way women are treated), but she is still up there with the best (worst) of them in the incompetent people fail up, destroying everything around them, and get rewarded unimaginably well for it group.

Corporate America prides itself on rewarding success and punishing failure. Yahoo CEO Marissa Mayer does not fit comfortably into that narrative. During her five-year tenure at the once-proud tech firm, user levels stagnated, ad revenue dropped, acquisitions cratered, layoffs accelerated, product quality floundered, and hackers stole the personal information of more than one billion users.

But when Yahoo’s sale to Verizon becomes official in June, with the restructured company renamed Oath, Mayer will walk away with $186 million, according to a regulatory filing released this week. That includes shares of Yahoo stock Mayer owned, stock options, and a $23 million “golden parachute” of cash, restricted stock units, and medical benefits. Mayer did relinquish $14 million while taking responsibility for the Yahoo Mail data breach, but she’ll get 13 times that amount just to no longer remain part of the company.

Under current practices, CEOs have a deep financial interest in merging their companies.
Mayer’s award is not merely an indictment of short-term thinking in executive boardrooms, which prioritizes increasing stock prices (the one thing Yahoo achieved) over creating a decent company. It reflects a real problem with executive compensation, which favors the very kind of corporate consolidation that is distorting our economy. Under current practices, CEOs have a deep financial interest in merging their companies. Their spectacular bonuses serve as a kickback for concentrating power in fewer and fewer hands.

Obviously there's a kind of competence involved, just not the one we're supposed to believe in.