Should those in management positions be required to give money when they fuck up in a company?

Yahoo
>2008
nytimes.com/2008/02/01/technology/01cnd-subyahoo.html
>Microsoft said Friday that it had made an unsolicited offer to buy Yahoo for about $44.6 billion in a mix of cash and stock
>The offer of $31 a share represents a 62 percent premium over Yahoo’s closing stock price of $19.18
>Mr. Yang, in particular, was adamantly against selling the company to Microsoft and championed the view of remaining independent

>2013
>shares in Yahoo reach $29 with super hype that Marissa Mayer will save the day

>2017
>Mayer is praying that Verizon's $4.49b offer is accepted
>after paying $1.1b for tumblr
>after receiving $200m in salary
>hoping to get another $186m from stock

Clearly both are to blame. The board is to blame. Mayer's just looks terrible for the precipitous fall. Should Mayer have to give back, say, $380m for fucking up?

Should Yang have to give back the squillions he made from stock?

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The board is to blame for hiring Mayer. Mayer and everyone else in management is to blame for their poor business model.

But nothing is wrong with paying a CEO $200M/yr. There's a limited supply of qualified managers and hiring someone good is extremely valuable, therefore the going rate is quite high. Companies have to pay a competitive wage in order to attract the best talent.

Stock options are a very good way to align management and shareholder's interests. Because managers themselves are also shareholders. They mitigate the principal-agent conflict where managers focus on short-term profitability at the expense of long-term strategy, to the detriment of shareholder's wealth accumulation.

If you don't like the CEO's compensation package don't buy the stock.

Obviously, yeah.

These efforts to shield people from risk and consequences of their mistakes in this way is extremely degenerate.

>There's a limited supply of qualified managers and hiring someone good is extremely valuable, therefore the going rate is quite high.

This is a myth. CEOs, by-and-large, are not business geniuses. They are just in the right place at the right time. It's basically like winning the lottery. There are millions of people who could be CEO and do just as well of a job as the average CEO.

The long answer eventually gets to 'no' for complicated economic reasons having to do with risk, innovation, growth, and monopolies. Basically, it's better for everyone that people can get rich while the company they run tanks, as unfortunate as that sounds.

On the other hand, I'd love to see the employees stone them to death.

It would have to be in their contracts. And if such a thing existed, there would be some kind of insurance that they would buy that would protect them, similar to malpractice insurance for doctors, and then their salaries would go up to reflect the premiums so companies could remain competitive. So no, it wouldn't work.

But $200m had them lose money. Maybe $200m is unreasonable. Maybe $1m + a stock option based on long-term performance (maybe a tranche when the CEO leaves, then another tranche 5 years after that?)

How much should they be required to give up? The balance would be very fine, otherwise talent would avoid it due to risk.

This

I know someone who worked very closely with Marissa, was in her wedding even.

Marissa's main talent was arriving early at Google

>It's another women in leadership positions are awful episode

...

Alternatively, you know. Don't fall for the business women meme and your company won't put itself in high risk of fucking up.

You're literally wrong. This is what minimum wage Bernouts believe. "CEOs don't do anything! I could do that job! I should be paid $15/hr, just take it from the CEO's salary! My job is harder than the CEO's!"

People at all levels are paid what they're worth. Do you honestly think anyone would hire a CEO for $200M when there are "millions" of people who could do the job just as well? If that were true, they'd save $199M and find the guy who's willing to do it for $1M.

It's the same argument as with the pay gap myth. If women did the same job as men for cheaper, every company would hire women and save themselves some money. Similarly, if there are millions of people who can be as good a CEO as someone who commands a $200M salary, then companies would be hiring them.

It's this simple. She was a below average CEO put in charge of a sinking ship. But if they hired a $20M CEO, he would have been >10x worse.

Mayer successfully sold literally a non existent company for $4.49b just in exchange for a blowjob to Verizon's CEO

its not like you could have tanked yahoo any worse, hiring a 20m ceo would have saved the company 180m

Hey look another woman destroys a company.

You can't seriously be this naive, can you?

Okay, let's walk you through this.

First, who's doing the hiring? The company's directors. Who are, logically, in the same industry as the potential CEO at roughly the same level. They quite possibly have been CEOs of other companies in the same industry, and may well be after they leave their current job. Meaning they directly benefit if CEO pay is high. I'm not saying necessarily they make decisions based purely on mercenary self interest. But if they've been paid 150 million to be a CEO, it's psychologically very difficult for them to challenge the idea that CEOs are worth that much.

Secondly, reputation matters more than actual achievement. What the directors are looking for isn't a CEO who will be good for the company, because structural improvements in the company will take years to come into effect. What they want is a CEO with a good reputation, because that will give an immediate boost to the stock price as soon as the hiring is done. As said, Marissa Mayer's main talent was that she happened to be connected to an extremely successful company.

The fact that she had absolutely nothing to do with its success didn't matter - just the fact that the connection existed was enough to boost her reputation. And again, given that the people doing the hiring are the same sort of person as the CEO being hired, it's very difficult for them to say to themselves 'You know, I really shouldn't have gotten this job. I didn't actually do anything, I just happened to be working at x-company while this other guy who was an absolute genius was working there.'

In fact, given that reputation is so important the fact that a CEO comes with a high price-tag is a selling point in and of itself. Case in point, you yourself believe that if the company is paying 200 million it must be getting absolutely top-notch leadership.

Additionally, since reputation is based in no small part on what is reported in the press, the fact that a potential CEO is likely to garner a lot of publicity - because, for example, she's a woman in a traditionally male industry - becomes quite a big factor in how likely they are to be hired.

>$200M lost them money
Yes, every salary costs the company money numbnuts. They have positions they need filled in order to continue operating.

> Maybe $200m is unreasonable
I'm sure you're an expert on the market rate for fortune 500 CEOs.

>Maybe $1m + a stock option
Maybe any qualified candidate would get a job somewhere else that pays a lot more.

I'm not saying she's a good manager or that Yahoo is a good company. And I agree they shouldn't have hired her (and therefore paid her too much.) But this "CEOs make too much money" shit is just Bernie Sanders tier envy.

What the fuck do you care if someone else if overpaid anyway? That's not your problem. You don't see me complaining that Floyd Mayweather made too much money on his last fight or that Messi's job is too easy.

bloomberg.com/research/stocks/people/person.asp?personId=109121691&privcapId=377732

This guy is in charge of Volkswagen, which is considered a top 10 company (so bigger than 99% of the Fortune 500).

A CEO has influence, but also plenty of luck is involved. If the skill+luck give a huge stock increase, then they are rewarded with the stock. Why $200 milly cash for burning shareholder wealth?

John Stumpf of Wells Fargo returned $41m for being a dickhead.

>"CEOs make too much money" shit is just Bernie Sanders tier envy.

THIS.

The company cold pay a CEO 400 million as a leaving package, and it would be pennies compared to the 1.2 billion loss that would occur if the CEO stayed for another year.

Retiring packages are a good way to make bad CEO's leave

YHOO is at almost $50 now.
Why are you guys bitching?

>be me, own a couple of franchises
>new CEO is being a COMPLETE nigger
>gets fired
>company hires a fucking WOMAN

I'm honestly thinking about selling my businesses. I'm not even memeing. I know how fucked businesses are statistically with a woman CEO....

Fucking cunts. I swear to God.

Mega high paid CEOs are all part of the old boys clubs from wealthy families, they all hire and take care of each other and launder money through each other it's pure criminal concentrated kikery

It is strange to think there are people valued so much when even a loaf of bread is too much a luxury. I wish life was fair.