I found this comment on CNN particularly interesting:
“While CEO of eBay in 2008, John J. Donahoe earned a total compensation of $22,462,893” — http://en.wikipedia.org/wiki/John_Donahoe
This looks like another case of a hotshot MBA (yes, Mr. Donahoe holds an MBA from Stanford) wrecking a company without knowing or caring anything about its business. These folks’ primary competency seems to be convincing boards of directors to award them grotesquely bloated compensation packages. Once the company is thoroughly looted, they blithely move on to the next.
It remindes me of the way John Sculley destroyed Apple Computer and Paul Lego deep-sixed Westinghouse Electric. Each of these Wunderkinder worked his magic while pulling down the big bucks. Meanwhile, the little people (remember Ms. Helmsley, y’all?) who actually produce something useful are toiling away in the shadows for peanuts.
I guess the right thing to do is to recognize these characters early on and avoid investing in companies that hire them. Easier said than done.
Good points, I’m sure they can find folks who’d wreck the company for a lot less money!
The root of this problem lies in the wrong-headed thinking that elite education and the “right” experiences equip a person to be a great CEO. Or President, Senator, Governor, Federal Reserve chairman, etc.
Ebay made other changes to the feedback system and also changes in the way that members can communicate amongst themselves. Many of these changes actually reduced the ability of Ebay members to root out fraudulent practices.
For instance their have been numerous feedback exchange scams. Someone would auction hundreds of “recipes” or other information that would be emailed to the buyer for a penny or two. Then both the buyer and seller would leave positive feedback for each other. In this way people could generate large amounts of positive feedback in a very short time. Then they would begin selling expensive items such as cars or other high value items. An experienced Ebayer could look back through the feedback of the other party and see if their feedback was from real transactions or one of these scams. I learned about this one the hard way. Ebay now limits the amount of time that you can look back at what feedback was left for to a maximum of two months.
Ebay buyers and sellers used to be able to communicate during auctions so that if you spotted a fraudulent or inaccurate listing you could warn others if the seller refused to take action. This is gone now also. My wife and I collect military uniforms and memorabilia. Much of it is improperly described and it is maddening when you send a message to a seller that they have made a mistake and they take no action to correct the description. I have seen dozens of examples of scam artists selling nearly worthless items for hundreds of dollars by claiming the item was something valuable using false claims. The victim may not ever discover that he/she has been ripped off. I have made numerous complaints to Ebay but they generally take no action. This type of scam hurts both buyers and honest sellers.
We still use Ebay all of the time, but I do think some of the changes made things worse.