What value do founders have to any online business? According to Deadline Hollywood Daily, MySpace founders Chris DeWolfe and Tom Anderson are asking News Corp to hand over $50million over two years for both to stay at MySpace, a pay rate of $12.5million each per year. On top of that both are alleged to be asking for $15million to “invest in internet companies”.
To put that in perspective, IBM chairman and CEO Sam Palmisano took home US$17.9 million in compensation in 2006; Chip Goodyear, the CEO of BHP Billiton, the world’s largest mining company made $6.5million in the same year. Google co-founders Sergey Brin and Larry Page, CEO Eric Schmidt and Apple CEO Steve Jobs all have salaries of $1 per year, although all 4 benefit from dividends from stock held.
The report goes on to claim that News Corp has countered with a $15million offer, or $3.75 million each per year.
Are DeWolfe and Anderson worth the money? On the surface the request would seem absurd. This is not to belittle their contribution to the success of MySpace, but to ask for a pay rate that would make virtually everyone in Web 2.0 blush reeks of pure unadulterated greed. Both have already profited greatly from selling MySpace and are already wealthy as a result; if they no longer retain ownership so as to benefit on an ongoing basis directly from the site (like Jobs and the Google team) they have no one to blame other than themselves.
DeWolfe and Anderson didn’t even create MySpace, they were simply marketing guys who took all the credit.
Tom didn’t even know HTML when MySpace was created! http://freemyspace.com/?q=node/2
Wow … that’s a spicy salary to be asking after making a ton of cash on the sale!
I honestly believe they didn’t benefit that much from the sale of Myspace… not at least compared to the value they sold it for and especially for what its worth now. All the more power to them for playing hardball with Fox.
If Fox wants to pay them that, they’re complete tools. These guys are replaceable.
Stock and pension funds will make millions.
Yeah, I don’t think they got that much either. I kind of don’t think they’re worth what they’re asking, but you always have to start high if you want to walk away with anything, I guess. I don’t blame them, but I don’t know that MySpace users overall identify with them that much anymore where they’d care, and they seem kind of replacable from a business standpoint.
I’d be inclined to believe that they just want to leave and are demanding absurd amounts as a way of convincing News Corp to show them the door.
$1.000.000 salary a month ??? And there are people living with less than a dollar a day in some parts of the world…I mean, I don’t blame this guys for asking but we all understand something is wrong, right?
Yes, I know, they “created” MySpace, a service that is used by millions around the world..bla, bla bla, but I still think something is wrong
Wow. I don’t like MySpace in the first place…Facebook and Xanga are much better…So I’d go hire some of the execs over there.
“Google co-founders Sergey Brin and Larry Page, CEO Eric Schmidt and Apple CEO Steve Jobs all have salaries of $1 per year, although all 4 benefit from dividends from stock held”
Way to play a first-rate straight man, duncan
What are these Google dividends that you speak of?
Is Mark Zuckerberg “greedy” for refusing to sell to Yahoo for $X billions?
anonymous coward,
the point in comparison is that Jobs and the 3 at Google didn’t sell out and are now reaping the benefits, DeWolfe and Anderson did sell out, they’ve got their money, and now they want more.
Absurd argument
There is a world of difference between the value of a company such as Facebook and the wages of others. DeWolfe and Anderson sold MySpace and I’m not knocking them for that and no one is, neither am I making any comment on the value of Facebook. Your argument is best said by the name you used to comment under
Google doesnt pay dividend on its stocks (see here, http://investor.google.com/faq.html#dividend)
As far as I am aware, google founders and shareholders make money only on paper till they hold the stock.
“Are DeWolfe and Anderson worth the money?”
No. Next question.
It is incorrect that DeWolfe and Anderson are wealthy as a result of the MySpace acquisition. In fact they got the shaft. If you look at the SEC filings you can see that they each made less than $2 million from the sale.
Now that MySpace is already big, I don’t see how they add any value at all by staying at MySpace. At this point, even a monkey could run MySpace.
First off, salary doesn’t mean anything. The reason Jobs takes $1 a year is because dividends and capital gains are taxed differently (generally much lower) from ordinary income. His actual pay in 2006 was about $646 million, I believe, which makes him the highest paid CEO in that year.
Second, and more importantly: “reeks of pure unadulterated greed”? WTF? You feel sorry that these guys are trying to get more money from a man like Murdoch?!! (Nice alliteration, right?) There is no greed in negotiating for salaries at a big company; there simply is what you can get them to pay you. Greed is about equitable distribution, and frankly everyone involved in these negotiations is a fat cat already. Plus, every dollar Murdoch has to spend on payroll is another dollar pried from his grimy hands. More power to them (although MySpace sucks).
I don’t know if the founders are worth what they are asking for, but to call them greedy based on their asking price sounds like unadulterated ignorance to me.
Is it just me who vastly prefers Nick Gonzalez’s articles to Duncan Riley’s?
Duncan has a way of opining and puffing up his posts to make himself sound more knowledgeable than he really is, but often failing. This article is a case in point.
It’s annoying and pathetic, really.
Respectfully, duncan, that’s naive.
Steve Jobs “wanted more” too, and got it by getting the board to grant him a bunch of stock options. I agree this is more elegant and nuanced than what the myspace guys are trying, but it’s their only course of action in their situation.
And the google people may not have “sold out”, but each has already sold at least a billion dollars of stock (yes, yes, to “diversify”, but for intents and purposes…)
My point is nobody in tech should stroke execs for their “$1 salaries”, or criticize the myspace guys for trying for more salary, given they can’t ride the option/public market gravy train.
Now if you are saying myspacers should have “held out” to go public, they may not have had a choice, etc. I don’t know the inside story apart from what is bouncing around the echo chamber.
Duncan - you haven’t done your research on the MySpace sale. Intermix exercised an option to buy back MySpace which they incubated, and then flipped it to Fox. I don’t blame the Intermix guys, they made their easy money and retired, but no one at MySpace wanted to sell, and no one got much money relative to the size of the sale (or more inmportantly to the market value). You should have good VC connections, give Redpoint a call and ask them what happened - they got screwed over as well.
denton stop posting anonymously!
What on earth do these two bring to the table of a site that can pretty much run itself?
It’s going to be interesting to see how this plays out. While the logical considerations of these demands seem to indicate that Chris and Tom are asking for the absurd, there are some intangible considerations which they must feel hold considerable weight.
http://www.drama20show.com/2007/06/27/greed-20/
no they don’t
My Predictions:
http://www.socialham.com/2007/.....thout-tom/
I think person can ask for any amount in salary he feels he deserves, we are no one to pass judgement if they are greedy or not. It is for the employer to decide if they are worth the money or it is better to look for someone else.
Also I think this kind of post is uncalled for at a place like TC.
“blush reeks of pure unadulterated greed” - solid wording man!
What value did DeWolfe and Anderson bring in, after they were acquired by MySpace?
They always were behind the competition, they did not use their massive user numbers to create a viable ecosystem which makes companies support their growth and would make their leading position more stable.
It doesn’t take high-paid CEOs to run a company without having a vision. If you want to get a high salary, you have to be good in what you do.
Look at Mark Zuckerberg - he does revolutionary things. Look at Steve Jobs - he does revolutionary things.
These guys haven’t become successful accidentialy, they did the right things to the right time.
DeWolfe and Anderson didn’t do anything extraordinary. That’s ok. But they shouldn’t be honored for that.
It’s not about how much they’re worth- it’s about the fact that they’re trying to position themselves as an integral part of the company’s success. Everyone knows News Corp got myspace for pennies on the dollar compared to what other companies would have been willing to pay- maybe this is the owners’ way of trying to make some of that back.
They aren’t worth it /
- They aren’t worth keeping, keep TOM lose these (2) chumps.
- They got their money… move along…
Ok, I’m not a MySpace apologist, but jeez - everyone here saying MySpace is crap and these guys aren’t worth anything are so far off it’s pathetic. You don’t get to the leading social network by complete accident - Tom and Chris specifically led a lot of the early growth, the focus on music, etc. MySpace *added* more people and page views last month than Facebook did (though Facebook’s % growth was much larger because they started from a smaller base).
Chris and Tom did not make a lot in the sale, yet they are the main reason MySpace and Fox Internet are worth what it’s worth.
Their demands are a little outrageous, but don’t dismiss what value they’ve actually added to make MySpace a key destination. And let’s get off the valley high-horse where we say all diss MySpace and recognize that it is a lot bigger and more successful (at least right now) than most things made here recently.
And to Duncan - to say they are already “wealthy” is just bad research - they aren’t anywhere near as wealthy as one would expect, which is what they are asking for. It’s not “salary” they are asking for, but asking sugar-daddy Fox to give them some $$ to compensate for the value they’ve brought in since MySpace has *grown* under Fox…
They totally deserve it. They got robbed by Intermix on the buyout and didn’t get nearly as rich as everyone thinks… They operate one of the busiest and most successful internet destinations on the web.. Fork it out Rupert!
Duncan’s right. The fact is they have no one to blame but themselves.
They didn’t hold on to enough of the company to have a say in the sale, and so other people profitted. Welcome to venture capital.
You can’t give away your company in return for funding and then complain when your new investors do what’s in their best interest rather than yours. That’s how the game works. They aren’t “entitled” to anything, and I think many here are simply backing them out of dislike for Fox.
Quick correction, Apple nor Google pay any dividends, zilch. Jobs, Schmidt, Page and Brin benefit strictly from capital gains on their large holdings of their companies stock.
If anything their asking price is cheap. Regardless of how much they ‘cashed out’ on the original acquisition if Murdoch thinks myspace is worth $12b Tom and Chris are smart to ask for this much. And, as another commenter pointed out, they’re probably not expecting it and looking for an exit.
I think Tom Anderson and Chris Dewolfe asking for more money is perfectly fine, and they both deserve it considering myspace is the largest social network ever created…. and for one thing they didn’t “cash in ” that much on the sale, atleast compared to other aquisitions such as YouTube and broadcast.com. And besides, if I invented one of the most successful dot - com companies I would want to be making millions… I don’t blame them
Since Tom is my only friend on MySpace, I will have to side with him on this one.
Its a negotiation! They asked for way more than they think they will get and then FIM counter offers. That was a heck of a counter offer. They should take it and put this story to bed but my guess is they will try to get FIM to move half way. Not likely.
They got to get it now because when News Corp spins it off for 25% of Yahoo they won’t get anything
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