eBay Inc. CEO to bag $23m departure pay out
According to Reuters, outgoing eBay Inc. CEO John Donahoe will trouser $23m when he steps down in 2015 after the eBay PayPal divorce. This is presumably on top of the package of salary, perks and stock options he already enjoys as the head of the currently united company.
The terms were approved by eBay’s board on December 15th according to company documents and other executives will also enjoy tasty farewell packages. CFO Bob Swan will walk out with a predicted $12m stack.
“John’s transition package is closely tied to the performance of the company during the separation period and the company’s stock price at the time of separation” according to eBay spokeswoman Amanda Miller.
It just goes to show what’s uppermost on the minds of eBay execs as the terms of the PayPal and eBay split are considered. Serious concerns about how the new companies will co-exist are vital but the bunce pile for outgoing senior staff is already the key concern. It’s rather depressing.
Not surprising really.
We’ve realised most of the problems on Ebay are engineered to make the company money.
Every error results in a trickle of pennies or cents to Ebay through fees they shouldn’t be getting.
It also explains the reluctance to fix these “minor” glitsches.
This adds up to millions of pounds / dollars a day across Ebay worldwide.
So, hey, Merry Christmas, Mr. Donahoe and your £23 million pay out.
Because you’re worth it.
In fact this determined procession pushing sellers towards free shipping is purely a method of improving the figures that are reported to SEC.
If you read the statement/claim made by eBay that your sales will increase by 11% purely by offering free shipping it sounds like a no-brainer but, if your sales are only increasing by 11% and for many items the cost of shipping can be as much as 40% or even the majority of the total sale price of shipping and item sale price combined.
This means that regardless of how eBay try and spin this increase you are not really gaining sales, you are losing sales but eBay can, because they are not allowed to include shipping charges on transactions as part of the turnover of product on the site i.e. sales (which is where they get the sales figure they like to quote) they will happily sacrifice a sellers net sales to allow them to inflate their SEC quoted sales figure by that 11%.
I ran free shipping for most of the year, doing as all sellers are told to do, include the cost of shipping in the price of the item because people see free shipping and think they are getting a better deal.
My net income dropped by 25% at it’s best and in some months dropped by 50% compared to years that I had charged shipping separate. Meanwhile fellow eBay sellers locally continued to sell with separate shipping charges and comparatively speaking, my prices including shipping were consistently lower but my sales of these items with free shipping were lower and when it came to bidding on purchases these same sellers did equally well with their price excluding shipping compared to my price including shipping i.e. it makes no difference to the purchaser.
The last week of November I started the slow switch to charging separately for shipping, followed by the daily assault from eBay with emails and phone calls telling me that I will do far better with free shipping. My net sales for this month which I compared to a similar month’s sales how shown a marked improvement in margins. Many items that had stagnated from our product range have started selling again and with separate shipping my prices look far more attractive.
Compared to a similar month with number of items sold and similar mix of products and pricing ranges I am showing a return back to profit.
It is also interesting that the 20% discount on fee’s that I was so worried about had dropped over the course of the year from $60-80 each month down to a paltry $28 during the past few months even though sales had been higher in those months and eBay’s claim that all my transactions had qualified for this discount. I guess eBay are trying to claw money back from somewhere and I guess this coming year this top rated seller discount will be abandoned. I know that I won’t miss that discount if it goes away completely.
So yeah, You are right, eBay spend more time using doubletalk, not fixing errors, they still lose listings and they claim that people with stores are getting free listings when they have a subscription for a store but eBay doesn’t grasp that we know we are paying a minimum of 7 cents per listing (if they have agreed to a yearly subscription for Anchor store). The store really means nothing, people don’t, and never really have, searched eBay through a store holders listings. When stores fixed price listings were omitted from search sellers tended to sell from people using google search to discover them and those lost listings not only cost sellers money but the time they spent creating the listing is lost.
I spent several months arguing with eBay over them deleting images from listings shortly after they had launched and they tried to tell me that I had forgotten to add them. I pointed out consistently that their website and ALL listing tools will not let you move off the first screen unless you add the pictures and since there were place holders on the listing where the images had been it was eBay deleting images. It took me that 7 months to be reimbursed for cost of listings where the missing images were only found when the items had not sold or a customer had asked for the pictures.
eBay is now operated by a bunch of incompetent moron’s that are too full of themselves to bother fixing blatant errors and you are right, they don’t want to because most of those errors makes them more money!
How much did his reign add to the eBay net worth?
Well I don’t think he added anything to growth that another CEO would not have added.
He may have stifled growth with some of his changes, if anything
Sorry, I wasn’t suggesting he had, it was a genuine question. Obviously the board felt that he’d created enough shareholder value to warrant the bonus.
I always wondered where my ever increasing and excessive fees were going – now I know! But i’m really happy as I know we all get great value from those that run the show and of course with eBay being such a nice “community” I expect JD will do the decent thing and share it with all the members.
Long live the Revolution!! 🙂
Don’t care how much he makes just as long as he is gone!
Turned ebay from a tool of empowerment into a machine that squeezes and starves you until are dead. Has it been worth it? How has the share price performed compared to Amazon?
lots of love,
small uk businesses
Lets not dance round the subject here. They are planning to cull thousands of jobs and at the same time dish out this kind of money to JD. It stinks, morally repugnant. I remember having a conversation by a stonewalling CS rep about the unfairness of the defect system; they were adamant it was fair and were cheerleading away for this company. I politely told them their jobs would be on the line as is our small business if this slippery slope continued; well here you have it; lovely ethics…. Getting trimmed up and prepped for sale to to the lowest bidder come the paypal split (they need to be careful not to load it with too much rotten wood or even allibaba will not touch it).
2014 has given us massively flawed defect system, massive hack(s?) which took over two months to let us know (just after AGM…), continual site crashes and down times, lower profits than expected, google search demotion, lower sales, fee increases, managed returns. Yep, job well done JD, you earned that bonus.
Shall be an interesting 2015
Ebay has gone from the easily accessable, profitable and “fun” place to sell to the disaster of feebay/evilbay – which is starting the journey to being just ONE of the various sales sites, making buying and selling more challenging (harder). The only way back is to welcome the banned sellers back and never ban anyone again for piddling dsr/ feedback offences.