<story><title>Yahoo spends $58 million to fire its chief operating officer</title><url>http://www.washingtonpost.com/news/morning-mix/wp/2014/04/17/yahoo-spends-58-million-to-fire-its-chief-operating-officer/?tid=hp_mm</url></story><parent_chain><item><author>bedhead</author><text>It&amp;#x27;s really sad how wildly distorted executive compensation has gotten. The best phrase I heard was &amp;quot;entrepreneurial reward for managerial duty&amp;quot;, and I fear it&amp;#x27;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&amp;#x27;s done just fine for over a hundred years and whose organic growth rate &lt;i&gt;might&lt;/i&gt; be 1% if they&amp;#x27;re lucky) was trying to give management $13 BILLION over the next four years. It&amp;#x27;s insanity. And when it&amp;#x27;s not simple pay, it&amp;#x27;s severance packages that give Fuck-You money to people whose performance provably dreadful. Leo Apotheker made $25 million on his way out the door from HP, after vaporizing over $6 billion in buying a fraudulent company and doing virtually no due diligence. It&amp;#x27;s madness, pure madness. Executive comp is a bubble, these people aren&amp;#x27;t worth anything near this much, but I have no idea when it will pop.</text></item></parent_chain><comment><author>ChuckMcM</author><text>Let me play devil&amp;#x27;s advocate for a minute.&lt;p&gt;The guy&amp;#x27;s &lt;i&gt;cash&lt;/i&gt; compensation, $500k. That is a about 2x what Google pays their top engineers (about $250k) The rest of his package was stock. [1]&lt;p&gt;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 &amp;quot;RSUs&amp;quot; (a restricted stock grant with performance tuners tweaked to company performance)&lt;p&gt;de Castro&amp;#x27;s stock did well because of the Alibaba thing &lt;i&gt;not&lt;/i&gt; because of what he did. So that left him with a chunk of stock. Had the company done poorly that would have been worthless. It could still become worthless. The filing indicates he got 1.5M shares in restricted stock, he no doubt will have to sell a chunk of that to pay the taxes on those shares (it will be treated as ordinary income by the IRS) and California.&lt;p&gt;When these stories are reported they pick the biggest cash number they can, but the actual value may be significantly less. Large stock grants are a tool to keep executives interests aligned with the company interests, they are given a lot of stock and huge restrictions are placed on their ability to sell that stock.&lt;p&gt;Had he stayed at the company, the restrictions on selling would have prevented him from realizing that stock value immediately.&lt;p&gt;[1] &lt;a href=&quot;http://www.sec.gov/Archives/edgar/data/1011006/000119312514146035/d710905dpre14a.htm#toc710905_32&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.sec.gov&amp;#x2F;Archives&amp;#x2F;edgar&amp;#x2F;data&amp;#x2F;1011006&amp;#x2F;0001193125141...&lt;/a&gt;</text></comment>
<story><title>Yahoo spends $58 million to fire its chief operating officer</title><url>http://www.washingtonpost.com/news/morning-mix/wp/2014/04/17/yahoo-spends-58-million-to-fire-its-chief-operating-officer/?tid=hp_mm</url></story><parent_chain><item><author>bedhead</author><text>It&amp;#x27;s really sad how wildly distorted executive compensation has gotten. The best phrase I heard was &amp;quot;entrepreneurial reward for managerial duty&amp;quot;, and I fear it&amp;#x27;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&amp;#x27;s done just fine for over a hundred years and whose organic growth rate &lt;i&gt;might&lt;/i&gt; be 1% if they&amp;#x27;re lucky) was trying to give management $13 BILLION over the next four years. It&amp;#x27;s insanity. And when it&amp;#x27;s not simple pay, it&amp;#x27;s severance packages that give Fuck-You money to people whose performance provably dreadful. Leo Apotheker made $25 million on his way out the door from HP, after vaporizing over $6 billion in buying a fraudulent company and doing virtually no due diligence. It&amp;#x27;s madness, pure madness. Executive comp is a bubble, these people aren&amp;#x27;t worth anything near this much, but I have no idea when it will pop.</text></item></parent_chain><comment><author>chrisgd</author><text>God that is the truth. And the push for stock buybacks just continues to gloss over the issue. Stock outstanding continues to decline, but the amount of money spent on buybacks should be pushing shares out down twice as fast. Instead ridiculous stock options (executives need to be invested in the Company!) continue to dilute the impact of buybacks.</text></comment>