Can this be anything but positive news? Despite some naysayers I've heard saying it is, I can't agree. This news suggests that high-level talent from elsewhere is migrating to Yahoo! from other opportunities.
And why wouldn't they? Not everyone made it on the Google operating committee last year when Larry Page did his reorganization. Mayer is well-liked and respected. Why wouldn't they want to take a chance of going somewhere else for more responsibility and a chance to leave their mark?
I heard some folks complaining that going to Yahoo! is a big risk. But is it? The company has a baseline of earnings coming in if they just remain asleep at the switch -- just as they have been for the last seven years. The chances are good that Mayer is not going to let that happen. Just a few solid moves will help get this company growing again. Even AOL (AOL) was able to accomplish that recently, so why not Yahoo!?
The one story that seemed to get a lot of attention yesterday afternoon after De Castro's hiring was his compensation. Various media reports said that it was worth something like $60 million and lots of folks then tweeted comments like: "Why should he get that much money when he hasn't created any value for long-suffering Yahoo shareholders yet?"
First off, these executive compensation packages for new execs always draw scrutiny and almost always are meaningless. There are so many variables at play that it's impossible to say it's worth $60 million or $100 million. It all depends on the time period that you're looking at and where the stock price goes. Obviously, Yahoo! shareholders want the stock price to go up as much as possible -- and they probably couldn't care less if accomplishing that goal meant an extra $30 million in De Castro's pocket.
Would I like De Castro to get paid $1 and only be paid a bonus based on performance? Would I like him to walk away from the stock he's already amassed at Google and start anew at Yahoo!? Sure. But there's no way that's ever going to happen.
Job No. 1 for Yahoo!'s board was to hire a great CEO a few months ago. They did that. She then wanted to provide more things like phones and food to employees but raise the expectations for performance. She got that. Now she wants to stockpile more talent around her. And, again, the board is supporting her.
Whether you're talking about Mayer's comp, De Castro's or the cost of iPhones for all, these are drops in the bucket compared to finally getting Yahoo! unstuck out of neutral.
Critics ask: But what if it doesn't work? Has Yahoo! ever had a better shot at success in the last seven years? Not even close. This announcement is unquestionably positive for Yahoo!'s stock and its shareholders.