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WHERE'S MY FAILURE MILLIONS?
An occasional feature highlighting Silicon Valley's Guanxi-style
cult of personality, excessive unjustified compensation,
ridiculous management skills, and sad sad squandering of capital
By Kevin Salveson
Where's my failure millions?
Why do so many business people, glorified as smarter and more deserving than the rest of us, bungle their corporate stewardship so spectacularly and yet get massive piles of money thrown at ther feet rather than fired for doing a poor job? The answer is always: it's who you know; capitalism suffers from a cult of personality; boards that are too complicit and fearful about inflated compensation issues; and excessive priviledge which leads to lack of vision.
Here's today's head-shakingly bad "failure millions" payout. From a New York Times article on Marissa Mayer:
"Within weeks of becoming C.E.O., she received an email from Henrique de Castro, the fashionable Portuguese president of Google’s media, mobile and platforms businesses. De Castro asked if she was available for a dinner...
"Over dinner, de Castro impressed Mayer with his knowledge of Yahoo’s business and his specific proposals for building it. For several mornings in a row, the two exchanged emails to negotiate de Castro’s salary. Every night, Mayer would make an offer, only to wake up to a reply with a list of more conditions. Eventually de Castro negotiated himself a contract worth around $60 million, depending on the value of Yahoo stock.... The Yahoo board was aghast, but Mayer argued that de Castro had to be compensated for the unvested Google stock he was abandoning. Anyway, she said, his talent ensured that Yahoo would reap many multiples of his salary in return. Henrique de Castro would pay for himself.
"...Despite the board’s urging, Mayer opted against vetting Henrique de Castro....As Yahoo’s ad revenues continued to decline, de Castro began to alienate his staff and fellow executives. ... Advertising revenue declined in every quarter since he was hired. Within a year, Mayer had personally taken control of Yahoo’s ad team. De Castro would leave the company in January 2014. For about 15 months of work, he would be paid $109 million."
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Nice failure millions! Can't blame De Castro, he proved one thing-- he can play people like a violin, so he certainly has some skill. My guess is he will be CEO somewhere soon. But, hey, Yaho, I can save you some money! I think I could screw the pooch just as badly for only half the amount De Castro received. Whatta bargain! So... ok, Silicon Valley douchebags of all types, go ahead and call me in the morning to negotiate my compensation package, I've got great bs I can throw out at a dinner party for you too! Such as, did you ever hear the one about the guy with the ridiculous golden parachute?
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