Judging De Castro and Marissa Mayer

NEW YORK (TheStreet) -- Following Marissa Mayer's keynote at the CES show earlier this month, the Yahoo! (YHOO) CEO was basking in positive press and tweet coverage.

Mayer's keynote generated more tweets per second than any other person, or part, of the entire show.

That's not really a surprise. Mayer has been a magnet for attention since she arrived at Yahoo!. This was just the latest example of her basking in the favorable press light.

Yet, shortly after the keynote, Yahoo! announced that its COO Henrique De Castro was leaving after 13 months on the job. Later, Mayer released a note to employees saying she'd thought about it over the holidays and decided to fire De Castro. What's more, within 24 hours of this, many reports surfaced that De Castro would get to keep a large chunk of the compensation package he negotiated for when he came over from Google to take the job a year ago. Some estimated this would amount to $109 million.

Anytime there's a story in the news about some executive -- especially a flunky executive -- getting to walk out the door with a big bag of money, we hear an outcry of protests.

Just this past week, we heard a lot of bellyaching about Jamie Dimon getting a big pay raise from his board at JPMorgan (JPM). There was also another story about how the top 85 people in the world have as much money as the bottom 50% of the world (3.5 billion people).

De Castro was just another guy in this meme of populist outrage against fat cats getting something for nothing, especially while the guy on the street busts his hump trying to put food on the table.

But, the vitriol against De Castro and Mayer was also something else. You can sense a lot of people want Marissa Mayer to go through a little schadenfreude, a little come-uppance.

I get it. This is America. We love to build people up as heroes, then tear them down, and then build them right back up again.

Marissa has gone through the "honeymoon phase" -- as many have taken to calling it -- for 2.5 years now since she was hired at Yahoo! from Google (GOOG). These same people like to point out that the increase in Yahoo!'s stock price is not due to her, but to Alibaba. And, if I've seen these kinds of blog posts once, I've seen them a thousand times, where they ominously end the post saying "the magic can't last forever."

If Mayer -- and Yahoo! -- ever fell flat on their faces, there would be hundreds of talking heads and tweeters coming out of the woodwork to say, "I told you so!" and "I knew it all along!"

This De Castro was their first opportunity to say "Gotcha!" And they made hay with it!

So, I'll give you my take. I thought De Castro was a busted hire from the start. And -- unlike the know-it-alls prancing around the last couple of weeks on this -- I said so last March here and last July in TheStreet here.

He was full of himself, unliked, and really had little relevant sales experience, let alone turning around a sales organization that was slumping like Yahoo! has been.

And the busted hire is totally on Mayer. He was her pick.

Everyone knew Mayer didn't know sales going into this job. Mayer herself told the board that. So, how did the board respond? By letting her hire the guy to be responsible for sales. Of course, Mayer is going to botch that hire. She didn't know the type of person she should hire because she knew nothing about sales in the first place.

It seems like the board was so enamored with their star CEO hire at the time that they decided to give her carte blanche. If she told them she wanted the Get R Done guy from the Prilosec OTC ads to be her COO, they would have said yes.

So was it a flop? Yes. Was it an expensive flop? Of course.

But let's put it in perspective. We all screw up and I can assure you that we will again in the future.

It sucked that Tim Cook hired a terrible replacement for Ron Johnson as head of Apple (AAPL) retail. But he did.

Do we judge Cook and Mayer by one bad hire? Of course not.

While as a Yahoo! shareholder, I'd love to get back the $109 million going to De Castro for his 13 months in the wilderness, I take a look at the stock price of my investment and notice that it is up 140% since Mayer was hired.

I guess $109 million in severance is OK, considering Mayer's created almost $24 billion in market capitalization since she came aboard. I'm no doctorate in mathematics and computer science, but I'd say Yahoo! investors are still ahead of the game with Marissa in charge.

At least she recognized a bad decision and fixed it, rather than doubling down on stupid.

Ned Brody's an excellent sales exec. I saw someone from an agency who dealt with him when he was at AOL (AOL) say something in the press like: "I like Ned, because he comes from AOL, where they don't just give you the order because you work for AOL." I think that's right on the money.

The schadenfreude folks will continue to lurk in the bushes waiting for Mayer (and by extension all Yahoo! employees) to stumble. I guess that's human -- as is making mistakes.


 

At the time of publication the author was lon YHOO and AOL.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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