David Marcus has been named as the new President of PayPal following the sudden departure of previous PayPal President Scott Thompson to Yahoo! Scott decided to jump ship in what appears to have been a sudden decision and eBay Inc. CEO and President John Donahoe has served as interim PayPal President since January.
David founded mobile payments start up Zong which eBay acquired in July 2011 for $240 million. Looks like it’s a double win here as he’s now President of the company that made him rich. It’s also a good win for PayPal as David is slap bang in the middle of the technology that is the future direction of PayPal. Forget the mundane online payments for eBay and webstores – PayPal is moving towards online and offline payments anywhere, anytime, funded by any source you happen to favour. President of PayPal looks like a plum job for someone enthusiastic about payments.
Talking of being enthusiastic about payments, it does beg the question as to why Scott was so keen on PayPal and then left at the drop of a hat. One could surmise that the “opportunity he felt he had to take” (according to John Donahoe) was financially rewarding. PayPal however routinely reports stellar results quarter after quarter so why wasn’t the remuneration at eBay Inc as attractive?
One possible reason is that PayPal is part of eBay Inc. The chances are that the PayPal President’s remuneration would be significantly higher if PayPal was floated off as a separate company to eBay instead of being based on group performance.
Regardless of the reasons for Scott’s sudden departure it’s presented a great opportunity for David. From building Zong, he now gets to lead one of the largest and most innovative payments companies in the world.
As much as Scott Thompson was a technology leader David Marcus is an entrepreneur. He’s built Zong from day one when he founded the company and that bodes well for cutting through the corporate bull and getting things done. PayPal has always innovated at a rapid pace but look out for even faster innovation in the future. It only took him three years to build Zong into a $240 million business – imagine what he can do with the resources of eBay Inc and PayPal to play with.
3 Responses
You ask the question as to Why somebody who seems to have it all Suddenly Jumps Ship. In this case it is Scott Thompson but it happens every day in all sorts of differant areas. Just think of the couple who have been happily married for years and suddenly the wife(or indeed the husband) jumps ship and goes off with somebody else.
Basically it is the idea that “The Grass is Greener on the other side of the Fence”. There have been several studies that show that often a few weeks, months or years down the road the one jumping ship will admit that it was a mistake.
I wonder if Scott Thompson in say three years time will admit that it was a mistake or perhaps it will be the greatest and most successful decision that he ever made in his life. Obviously only time will tell.
One trouble with many of these decisions is that they are not reversible. Some are. You hear of the husband that ran off with the Baby Sitter who realises 6 months down the line that it was a total mistake and he approaches his ex-wife and she agrees to take him back. But Companies need continuity. So once the CEO has jumped ship they need a new CEO and they start recruiting immediately. Indeed as per the above example they possibly had a candidate in mind.
It does appear a bit recently in the upper ranks of such companies as Senior Positions were almost a game of Musical Chairs and that should be worrying as it could show that there are serious underlying problems throughout the industry.
John Donahoe is proud of and has bragged about having a 75% turnover of C-level executives since becoming CEO. He has wielded his broom to great effect, virtually none of the management team who helped build the eBay community remain.
Tellingly, many of the bright young executives who were being groomed for upper management have moved on and there are no women left at the uppermost levels of eBay. It is now a boy’s club and the Dear Leader reigns supreme.
Men (mostly) who climb to that level in large corporations didn’t get there by being oblivious to what is going on around them.
I believe Donahoe’s vision of PayPal’s future direction together with his Bain management style told Scott Thompson he had reached the top of his eBay ladder. There was nothing impetuous about his move; when he saw opportunity he grabbed with both hands.
I have to say I am very impressed with paypal. Exceptional customer service, personalised care. They handled my chargeback situation brilliantly with really constructive advise.