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Comment by compiler-guy | Hacker News Reader

The value of the company jumped sixty-billion dollars after her first earnings report. So, roughly, in her first quarter at the company, she paid her entire compensation package back to the shareholders almost 900x over.

Anyone with any stock in Google at that point would have been thrilled even if she never accomplished anything else.

Seventy million was a steal.

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You have fallen victim to the outcome bias. It is a mistake to attribute the quality of a decision to a specific outcome when the correlation between their determinants is low or unknown. In layman's terms, you don't know that it was her joining Google that led to this particular rise in Google's market cap. It could have been any other number of factors. Even simpler, what you said can be analogized to "I won the lottery while wearing this particular shirt, so it must be my lucky shirt".

Furthermore, statistics show that there is a positive correlation between companies rewarding executives in a bull market, and punishing executives holding the exact same positions in a declining market, thereby making luck and timing, not skill, a main determinant of who eventually makes money (the correlation between how well a company performs and the perceived skill of its executives was determined to be around 10-20%).

One of the big questions when Pichette announced he was retiring was whether or not Google would be able to find someone who had his level of skill. This was factored into the stock price, which remained flatish or slightly down from March of 2015 until Porat's first earnings report.

The market hates uncertainty, and priced that in. Google is famous for being undisciplined and Porat's hiring dramatically reduced the uncertainty around Google's discipline.

I don't pretend that it was all Porat that caused the jump (and you are misreading--rather ungenerously--me by saying that I'm treating this like a lucky shirt). But Google had no other step-wise jump like that in its history, and no other tech company had a similar rise in roughly the same couple of weeks.

The market was waiting to see what Google would do without Pichette. Porat answered the question.

Compare GOOG to FB and APPL, and look at the five-year charts.

http://finance.yahoo.com/quote/FB?p=FB http://finance.yahoo.com/quote/GOOG?p=GOOG http://finance.yahoo.com/quote/AAPL?p=AAPL

Attributing that gain solely to senior management in ridiculous.

That's pretty ridiculous. The company's leverage is not any individual's leverage for compensation purposes. We don't all expect to get paid for the net present value of our contributions to the company.

That's assuming no one else could have accomplished that for 69M$ though :)

The point isn't that no one else could have. The point is that no one else did.

And I don't attribute it solely to her. Certainly the company's performance was the major factor. But the market was largely reacting to the change in certainty around Google's financial discipline.

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