Remember the original TV commercials for Yahoo? “Yahooooo,” a disembodied voice would sing out in a campy old-world pseudo yodel. How cute. High-tech swagger with humor.
No one in corporate Yahoo land is swaggering anymore. Media hotshots see the 20-year-old company in “increasingly public free fall.” Yahoo’s revenue has dropped 18 percent from a year ago. In February, the company announced 1,700 job cuts.
More cuts are coming. By year’s end, the Yahoo workforce figures to be down 42 percent from 2012 levels.
Earlier this week, meanwhile, a New York hedge fund that holds a small stash of Yahoo shares bullied its way onto the Yahoo board of directors. The hedgies want Yahoo to sell off its “core business.”
Yahoo as we have known it will soon, the experts seem to agree, be no more. What, they’re asking, went wrong?
Well, actually, Yahoo has done quite well. In fact, spectacularly well. This Silicon Valley giant has succeeded royally at what our contemporary corporations do best: enrich executives.
Yahoo’s current CEO, former Google honcho Marissa Mayer, came on board at the company in 2012, the company’s fourth CEO in four years. She replaced Scott Thompson, who stood to make $26 million his first year, but only lasted four months.
Thompson’s predecessor, Carol Bartz, signed on for $32 million. She followed Yahoo founder Jerry Yang, who put in a brief stint after his hand-picked successor Terry Semel flamed out, but not before collecting an astounding $489.6 million for a half-dozen years in the Yahoo chief executive suite.
Mayer early on in her Yahoo tenure figured she needed help to right her foundering corporate ship. But the former Google colleague, Henrique de Castro, she brought in didn’t quite work out and Mayer had to give him the heave-ho. His severance package: $58 million for 15 months of executive labor.
Shareholders seemed none too happy about that. Mayer’s answer? To calm down the unease over Yahoo’s executive pay giveaways, she brought onto the Yahoo board H. Lee Scott Jr., the retired Wal-Mart CEO. In his last year as Wal-Mart’s chief, Scott took home $30.2 million, over 1,500 times average Wal-Mart worker pay.[pullquote]Yahoo has succeeded at what our corporations do best: enrich executives.[/pullquote]
Walmart’s Scott helped work wonders — for Mayer’s personal compensation. In 2013, she made only $24.9 million. In 2014, her take-home bumped up nicely to $42 million, with nearly another $36 million last year. This past December, one analyst calculated that Mayer’s total Yahoo compensation would hit $365 million if she made it to 2017 and completed five years as CEO.
That five-year tenure now appears to be unlikely. The hedgies now powering the Yahoo board want Mayer out. Estimates of what her own personal severance will total have ranged from $45 million to $158 million.
So what does all this leave us with? Yahoo, just another incredible American corporate success story. At least for our incredible American corporate executives.
Sam Pizzigati, an Institute for Policy Studies associate fellow, co-edits Inequality.org. His most recent book: The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900–1970 (Seven Stories Press). Follow him on Twitter @Too_Much_Online.