Yahoo's Marissa Mayer could get $55M in severance pay
It&#x27;s easy to criticize Mayer but I think the expectations of what she could have achieved were pretty wildly out of whack.  I&#x27;m reminded of Daniel Kahneman&#x27;s dissection of CEO performance and the book &quot;Built to Last&quot;, in his book, &quot;Thinking Fast and Slow&quot;:<p>&gt; The basic message of Built to Last and other similar books is that good managerial practices can be identified and that good practices will be rewarded by good results. Both messages are overstated. The comparison of firms that have been more or less successful is to a significant extent a comparison between firms that have been more or less lucky.<p>&gt; Because luck plays a large role, the quality of leadership and management practices cannot be inferred reliably from observations of success. And even if you had perfect foreknowledge that a CEO has brilliant vision and extraordinary competence, you still would be unable to predict how the company will perform with much better accuracy than the flip of a coin. On average, the gap in corporate profitability and stock returns between the outstanding firms and the less successful firms studied in Built to Last shrank to almost nothing in the period following the study. The average profitability of the companies identified in the famous In Search of Excellence dropped sharply as well within a short time. A study of Fortune’s “Most Admired Companies” finds that over a twenty-year period, the firms with the worst ratings went on to earn much higher stock returns than the most admired firms.<p>Mayer wasn&#x27;t lucky.  But I bet she&#x27;s far more competent than most of us.