Skype Execs Purged On Eve of MS Takeover

jfruhlinger writes "You might think that the executive team that engineered a lucrative buyout for their company would be rewarded. But eight execs from Skype instead found themselves fired just before their company was formally taken over by Microsoft. It appears that this move isn't meddling from Redmond; rather, the private equity firm that owns a 70 percent stake in Skype wanted to cut back on the payout to company execs that would normally accompany this kind of transaction."

Comments

The invisible hand of captialism

[Pope]

Always seems to be carrying a very sharp sword.

Re:The invisible hand of captialism

[s73v3r]

Yeah, this argument is retarded, as everyone else in the sector enjoys the same protections on their software. Basically, it says, "If I could compete with Microsoft by selling their OS, Microsoft Windows, then they wouldn't be a monopoly." Basically saying that, if you could just clone their software and compete with them by selling the same thing, yet you without all the R&D costs that Microsoft put into it, then there'd be "competition".

This also completely ignores the fact that Microsoft forced a bunch of OEMs to pay them royalties on all computers, even those without Windows, in blatant violation of all anti-trust laws and anti-competition laws. Face it, Microsoft became a monopoly of their own doing, not by being propped up by "government."

Re:The invisible hand of captialism

[Dorkmaster Flek]

Because physical property is naturally scarce. If I'm using a plot of land, you can't use the same plot of land. Hence, we have a conflict that physical property law resolves. Intellectual property has no built-in scarcity. In fact, IP laws actually create artificial scarcity where none exists.

when the victims of corporate psychopaths

[circletimessquare]

are other corporate psychopaths, it's hard to feel sympathy

Re:when the victims of corporate psychopaths

[twidarkling]

Why? At least VCs actually do something with the cash. Invest it in other places to make more money. C*Os tend to simply sit in a company and get rich. Sometimes they move to other companies that are already established and get rich. Very rarely do they take that money and knowledge and make something new to make money with.

Re:when the victims of corporate psychopaths

[DontBlameCanada]

C*O's of start ups or young companies typically aren't fat cats who siphon cash while contributing zero. A small corp will quickly die off as all jobs, from ground floor peons to the CEO are important.

C*Os of established corps can indeed be fat cats. Established revenue streams, customers, large enough assert hoards to give a company viability via inertia for more than 4 quarters. Inattention and self-serving proclamations that don't result in immediate corporate implosion, can thrive in that environment.

VC's exist to generate return on investment for their major partners. Some act as angels, but most promise x% return on investment to their patrons. If the VC is short on promise #s, they will take the short term personal gain over the long term health of the entity they are selling.

Corporate Sleeze

[DaMattster]

That is a really slimy thing to do. However, usually the little guy gets hurt in mergers and aquisitions so I, in some ways, am happy to have the upper echelon get a taste of it. I think these executives that got affected might consider the smaller guys in their future roles, perish the thought.

Don't feel bad, dear managers

[Opportunist]

You know, every time a takeover happens some people get fired.

I am delighted to see that for a change it happens to you.

Re:Fired?

[eln]

At the executive level, "fired", "resigned", and "laid off" all mean the same thing. At any rate, even if they didn't have golden parachutes as part of their employment contracts (and they're idiots if they didn't), I'm sure they have plenty of stock and stock options to dry their tears with.

Reading into it?

[DaScribbler]

This submission, and the article referenced to, read entirely differently.

Where exactly does it say they were fired?

mergers are statistically bad for everyone

[smoothnorman]

A wise old CEO wheezed unto me: "A merger is a risk to everyone except one of the two CEOs - to everyone else it is a danger". Mergers reduce competition, so the market loses; mergers cost stockholders, at least in the short-run; mergers are engines of redundancy so it's a threat to all the employees. The only possible virtual gain is an investors' promise of less competition in the marketplace. Almost everyone loses. So the next time you read: "Massive-corp to buy out Macro-corp!" try not to cheer for the two original owners who get their one-time lottery prize, but instead pause in lament for the majority and progress in general.

Re:Ah, but I wanted to blame Microsoft

[captain_sweatpants]

You must not have noticed the reference to them being executives.

Re:Ah, but I wanted to blame Microsoft

[s73v3r]

So some other overpaid freeloading bastards (The VCs) fired some other overpaid, freeloading bastards (The Execs)?

Re:Ah, but I wanted to blame Microsoft

[toppavak]

Yes, but it would have been possible for them to make a lot more money out of the process if they were fired afterwards. Typically stock paid to execs have to vest over a period for ex. every year 20% of your stock vests over 5 years. If the execs were not fully vested, the acquisition event would have triggered an instant vest clause and they could have cashed out on their entire package. If they were fired before the acquisition, any stock that had not yet vested would simply be lost, reducing the total amount of stock Skype had issued and increasing the value of the stock held by the equity firms. They were stabbed in the back by their own financiers- not an uncommon occurrence. It serves you well to vette the VCs you work with every bit as much as they're going to vette you.