I just checked and we've been making fun of Zucker since 2010.

Sometimes you come up with an example so good you just have to keep revisiting it. When it comes to executive compensation, that example is Jeff Zucker.

The standard defense of exorbitant CEO salaries and bonuses is that they are worth it, that they more than pay for themselves in terms of corporate performance. 

The problem with that argument is that there doesn't seem to be that strong a correlation between how well these people do and how well they are paid or how they are able to get and hold on to incredibly sweet jobs.

As you can see from our earlier post below, Zucker is a strong competitor for worst network executive executive ever, taking NBC from first to fourth with remarkable speed. You might have thought this would have been a bit of a black mark on the resume. Fred Silverman had spectacular runs at CBS and ABC, then stumbled at NBC and though he later re-established himself as a successful producer and many of his NBC decisions look pretty good in retrospect (such as greenlighting and developing David Letterman's first show), he remained an industry punchline for years.

At NBC/Universal, Zucker just kept failing up. Even after being forced out there, he landed the top job at CNN because he had "experience" running a network. All of which makes it all the more fitting that he left on this note.  

Wow. Streaming service CNN+ will shut down on April 30, only one month after it launched. Previous management at CNN had placed a huge bet on it. https://t.co/wnNiZhmlsQ

— Jay Rosen (@jayrosen_nyu) April 21, 2022

Before we give ourselves over to schadenfreude, it's important to remember that when executives screw up, it's the people way down the food chain who pay the price.

Here's a very pensive and uncharacteristically unpolished Bob Chipman on the subject.

"It's really unfortunate that all the people at CNN+ got caught in the middle of what is essentially a corporate tug of war here."

–@MattBelloni pic.twitter.com/qu67lUZd0q

— Brian Stelter (@brianstelter) April 22, 2022

From Business Insider:

CNN+'s demise came fast, and so have the blame and recriminations. 

Warner Bros. Discovery pulled the plug on the costly project less than a month after launch, with new CNN CEO Chris Licht saying in a statement that "CNN will be strongest as part of WBD's streaming strategy which envisions news as an important part of a compelling broader offering along with sports, entertainment, and nonfiction content."

...

Blame for the destruction doesn't seem to be falling on new owner WBD or its emissary Licht. Instead, company insiders and industry observers are largely laying responsibility on the shoulders of former CNN president Jeff Zucker and departed WarnerMedia CEO Jason Kilar.

"This was all ego. All a power play for a bigger job or independence. Hubris. Nothing more," said one former WarnerMedia exec of Zucker. "The only people who ever thought this was a good idea either worked at CNN or were trying to get CNN + to hire them. Nobody else."

...

"It was a vanity project for [Kilar] and Zucker," an insider familiar with CNN's plans said in early April. "They wanted to launch it." 

After Zucker resigned from his role in February — over his failure to disclose a relationship with a colleague — industry observers wondered if the company might hit pause on CNN+. But Kilar stayed the course. 

"Frankly, I think Jason Kilar knew it was going to fail," the former WarnerMedia executive said, "and was happy to let Zucker push it out there so his last final thing at CNN was a failure."

Saturday, September 25, 2010

Forget teachers-- hell, forget employees, what does it take to fire a CEO?

One of the fundamental tenets of the modern educational reform movement is faith in the private sector. In the last post, I discussed the contradictions in using that faith to justify attrition policies that are pretty much unheard of in the corporate world.

There's a second potential danger in looking to the private sector for answers. Companies are not very transparent. Most go to great lengths to hide incompetence and depict every effort as a success. There's nothing illegal or even unethical about this. If anything, the people who run a company have an obligation to present it in the best possible light.

Though you can't blame businesses for spinning their results, you can get into a great deal of trouble by imitating them. For example, a school system might adopt an innovative system of project management and never know that it was responsible for hundreds of millions in cost overruns.

Occasionally, however, you will run into a corporate screw-up so massive that no degree of opacity, no amount of spin can obscure it. When you encounter one of these, you should take a moment to remind yourself that the snafus that break the surface represent a minute share of the general population.

Which brings us to Jeff Zucker.

Zucker was brought in as president of NBC Entertainment in 2000 after a stint at the Today Show where his most notable accomplishments were moving the studio and introducing the Today Show's outdoor rock concert series.*

His tenure on the Today Show represented one of Zucker's two specialities: making tiny tweaks to a hit then claiming credit for its success and screwing up on an almost biblical scale. Under Zucker, NBC was the first network to ever go from first to fourth place and he came very close to destroying their lucrative late-night slate. According to an executive for another network (quoted by Maureen Dowd), "Zucker is a case study in the most destructive media executive ever to exist... You’d have to tell me who else has taken a once-great network and literally destroyed it."

Zucker was grossly incompetent. The cost to shareholders is difficult to estimate but it's probably in the hundreds of millions (possibly billions**). His poor performance was widely discussed in the industry.

And yet it took a change of ownership to force him out and he still gets terms like these:

Zucker's contract had been renewed last year to run through January 2013 with an annual salary of $6.3 million and a guaranteed annual bonus*** of $1.5 million. If he leaves by January, he can expect at least a $15.6 million check.

The moral of this story is: next time people tell you that schools should be run like a business, make sure to ask them which business they have in mind.


* Apparently the Today Show has an outdoor rock concert series.

** Here are some numbers from Wikipedia to put things in context:

On December 1, 2009, CNBC reported that a tentative agreement had been reached between Comcast and GE.^[26] The deal was formally announced on December 3, 2009.^[7] Under the agreement, NBC Universal would be 51% owned by Comcast and 49% by GE. Comcast is to pay $6.5 billion cash to GE. Comcast will also contribute $7.5 billion in programming including regional sports networks and cable channels such as Golf Channel and E! Entertainment Television. GE plans to use some of the funds, $5.8 billion, to buy out Vivendi's 20% minority stake in NBC Universal.^[7] After the transaction completes, Comcast will reserve the right to buy out GE's share at certain times. GE will also reserve the right to force the sale of their stake within the first seven years. The deal is subject to regulatory approval.^[7]

Vivendi will sell 7.66% of NBC Universal to GE for US$2 billion if the GE/Comcast deal is not completed by September 2010 and then sell the remaining 12.34% stake of NBC Universal to GE for US$3.8 billion when the deal is completed or to the public via an IPO if the deal is not completed.^[27][28]

*** I just love the idea of a "guaranteed annual bonus."

Wednesday, December 12, 2012

Peter Principle or Dilbert Principle*

In case you haven't heard, Jeff Zucker has just been named president of CNN. Since we've been discussing incompetent executives lately, this seems like a good time to ask how, despite huge stakes, fierce competition and multiple layers of screening, incompetents still sometimes manage to make it to the top of large corporations.

At first glance, Zucker would appear ot be a perfect example of the Peter Principle, an effective producer promoted past his talents, but when you look closer at Zucker's one big accomplishment, the resurgence of the Today Show, you see less proof of competence and and more evidence that corporate reputations are often built on unrepresentative baselines, delayed effects, external factors and the tendency to embrace appealing and established narratives.

First some background via Wikipedia (as are all block quotes unless otherwise noted).

In 1989, [Zucker] was a field producer for Today, and at 26 he became its executive producer in 1992. He introduced the program's trademark outdoor rock concert series and was in charge as Today moved to the "window on the world" Studio 1A in Rockefeller Plaza in 1994. Under his leadership, Today was the nation’s most-watched morning news program, with viewership during the 2000-01 season reaching the highest point in the show’s history. ... In 2000, he was named NBC Entertainment's president.

Sounds pretty good, but remember two things that happened at the Today Show in 1990 an 1991. The first was a disastrous transition from Jane Pauley to Deborah Norville. You could make the case that Norville was actually better qualified for the job, but that did nothing to soften the viewer reaction. The younger Norville was seen as taking advantage of looks and youth to steal Pauley's position. Saturday Night Live even did a sketch entitled "All About Deborah Norville."

The ratings took a hit from the debacle, but Norville was soon gone, setting the stage for an upturn. That recovery was all but guaranteed by the hiring in 1991 of Katie Couric, a journalist who could have been genetically engineered to host a morning show.

Whoever got the producer's gig in 1992 was almost certain to oversee a substantial rise om ratings as the memory of the debacle faded and Couric started bringing in viewers. Now add in what was going on at Today's significant competitor.

Good Morning America entered the 1990s with its overwhelming ratings success. Gibson and Lunden were a hard team to beat. But Good Morning America stumbled from its top spot in late 1995. Lunden began to discuss working less, and mentioned to network executives that the morning schedule is the hardest in the business. ABC executives promised Lunden a prime time program; Behind Closed Doors would be on the network schedule. On September 5, 1997, Lunden decided to step down after seventeen years on Good Morning America and was replaced by Lisa McRee. Gibson and McRee did well in the ratings. However, ratings sharply declined when Gibson also left the show to make way for Kevin Newman in 1998. With McRee and Newman as anchors of Good Morning America, long-time viewers switched to Today, whose ratings skyrocketed and have remained at the top spot since the week of December 11, 1995.

In other words, Zucker started with an artificially low baseline, was handed a major TV personality on the verge, and saw his competition fall apart at exactly the right time. All of the important drivers of the show's success were things he had nothing to do with.

Just to be clear, many, probably most CEOs get their jobs because they are smart and capable and add value to the company, but there are other ways to  succeed in business. You can:


Fit in with the culture;

Make the right friends;

Couple your career with rising leaders and initiatives;

Fashion a persona that complements the favored narratives;

As for that last one, the legend of the studio boy wonder runs deep in the entertainment industry, from Thalberg to Silverman. When Zucker was put in charge of Today in his twenties and NBC in his thirties, he tapped into something both familiar and resonant.

But Thalberg and Silverman really were boy wonders who had laid down impressive resumes before they were put in charge. Zucker only had the perception of success. Sometimes, though, that's enough.



* Technically not the Dilbert Principle, but close.