Do you think it's even possible to say that those gains, if they occur, are a direct result of the CEO's actions? Is it even /possible/ for Marissa to provide /that much/ value to the company? I feel as though the collective actions of everyone other than the CEO have a much greater impact on the company's success in a given year.
In your car, when you push the gas pedal and turn the wheel, you are not moving the car. You are directing the car how and where to move. Lately, Yahoo has been ramming into the back end of a slow moving bus.
If she gets Yahoo back onto the expressway, she will be responsible for the success, although all the employees working together will be implementing the success.
Your analogy makes all other employees look like mind less cogs,who can have no idea's of their own.No CEO can succeed without a good team. Which begs the question , if yahoo makes 150M more, does she deserve 2/3rd's of that new money? Is Marissa the only person who has a winning perspective or a sense of direction in a firm of more than 10000 people? What we see here is the trickle down effect and people closer to the money paying themselves first. It is also true that a bad ceo ( thompson, bartz) can do more damage to a large company like yahoo than the benefits a good ceo can bring. The board has swung for the fences cause it has shot itself in the foot many times. A lot of this money , is for Marissa to NOT screw up yahoo like her predecessors. Even if she just keeps the engine chugging along at an average pace, the board will be relieved.
edit: Grammar
Somehow I think that if the ordinary employees weren't told they'd be fired for doing what they think is right instead of what their bosses order them to do, they could run things just fine themselves. Only the rulers think you need rulers.
I'm always surprised at this sort of feeling. The collective actions of everyone else at the company, if the company is not run pathologically, exist solely to pursue the goals of the CEO. The CEO sets the goals: describes what it is that this group of people does, what value they offer to the world at large.
You may not like that that's the way it works, but I think it's impossible for the CEO to fail to have a huge impact unless the company's run terribly. I also think it should be trivial to see that, given that the CEO has such a huge impact on the direction the output of this large number of employees takes, that the CEO's actions have an enormous impact on the value the company provides, and consequently the profit the company derives.
If the CEO of Yahoo decided that their best move was to pursue 1990s era AltaVista style search, combined with the idea of 'being a homepage' (which afaict is their current strategy, plus destroying good products), I think it'd be hard for you to NOT recognize that they would be destroying value in the company at a much higher rate than $150M/year. The CEO, personally, would have that impact. If the employees were more efficient at their jobs, or less efficient, it would have little impact (rounding error) in the overall impact of this policy pursuit.
CEOs are the company, for many purposes. Why shouldn't they be paid accordingly?
What if all the great ideas in a company are coming from the non-CEOs? If these ideas are instrumental in the company's success, then wouldn't the CEO be receiving wildly disproportionate credit for said success? (Regardless of the fact that the CEO is the one who allows the ideas to come to pass, the fact remains that the people with the ideas/talent are the ones providing the real value.)
I think that your point is legitimate but that you overvalue the value of it. Yes, in that hypothetical situation, the CEO would be receiving disproportionate credit for the success. I even think this might happen quite a bit. But things don't happen in a vacuum. I think that Meego was a fantastic product, the N9 a brilliant piece of hardware, and I think that no matter how much that's true Stephen Elop truly and royally ruined any value Nokia had a chance of creating by pulling a helluvan "Osborne Computer." The ideas and talent were all there in spades, and the execution by the guy responsible for handling the organization's execution COMPLETELY trumped all of that.
