Marie Leone, CFO.com | US
October 19, 2007

Its not just about the money

The Torre situation was clearly a front office manipulation to attempt to ease public reaction to a very unpopular move of firing a manager who was 12 for 12 in post season appearances.

First, in any compensation issue you have to know what motivates people and design your program accordingly. If you have any doubt that a top management person needs a large percentage of compensation in bonus to meet the goals, then you don't understand your business.

Torre is actually middle management. Top management in Yankee corporation is the President -Levine, GM -Cashman- and other top front office staff.

As this is an entertainment business, your key employees/talent are your players in a sport. Their performances on the field is what determines who wins and who loses. Management has not put any major incentives in place on player contracts for post season bonuses.

If you believe in the post season bonus system then all the employees need to be on the same concept, top management, field management, and the players, whose performance on the field is critical to winning it all.

Baseball experts know that top quality pitching is the key to winning playoff and world series. I contend that the reason the Yankees have not won the world series in the last 7 years is more front office fault for not getting the top pitchers in the game. Clearly, with The Yankees $200 million plus payroll, front office management underperformed here and has set the team to fail each year. Let's fire them.

As with many financial people who only view busiess from the numbers side, they tend to forget the other management skills that a field manager needs to be successful. People skills, ability to motive others through difficult times, and expanding the companies brand and overall image to the public.

As far as the Yankee brand goes, Torre did nothing but enhance this brand to the fan base and the merchandise -consuming public.

Honestly in the Yankee case, Top management has not done their job. If they want to win, a new manager alone will not get that job done. Go get some pitching. Or consider firing yourselves.


John Fugazzie, President, Marketing2Retail
and Life Long Yankee Fan

Posted by John Fugazzie | Oct 24, 2007 8:56 AM ET

Offer to Refuse

The contract -offer- was framed in
such a way that it would be turned
down -period.
When the club lost to the Red Sox
in 2004 - in 4 straigt games after
being up 3-0 - the -ONLY- way
he was going to keep his "job"
was to win -another- World Series
-period. Is that "Fair , Right" ?
No - but that's the "Way" of Sports
at the Professional Level - period.
and Torre was/is fully aware of the
Above ! They didn't want to "Fire"
him outright - but "Force" him to
- Leave ! But as the saying goes
"... be careful what you wish for..."
The Team could split apart - as a
result of how Torres was treated !
Its 50 / 50 as to staying together
or going apart !

Posted by george zorilla | Oct 22, 2007 2:31 PM ET

Torre Over Rated

Before joining the Yankees Torre's record was mediocre. In his first eight years the Yankees won the AL penant six times. His four world series wins came in his first five years. The talent pool in his early years deserves the credit. Likewise for the later years.

Contrast his record with Walter Alston who managed the Dodgers for 23 years with successive one year contracts. He has a better winning record than Torre.

The long term contracts and financial rewards need to go to the staff that assembles a competative team for the long term with financial discipline.

Decision making is impaired when the expectation to be number 1 all the time is combined with unlimited financial resources; e.g.; Roger Clemens.

A new CEO of a "well oiled machine" does not command the salary a turn around manager deserves. Likewise, the metrics on which they are measured are very different.

If the Yankees are now in a turn around phase why is Torre gone while the GM and President remain?

Posted by tom kornelis | Oct 22, 2007 12:05 PM ET

What a Difference a Year Makes

Good point Mr. Gelles. Chip Clothier, the executive search pro mentioned in the Joe Torre article, did mention to me that the one-year deal the Yankees reportedly offered to their skipper was not typical of corporate pay schemes. The comment did not make it into the story, but Clothier noted that no CEO ever signs a deal to turn a company around in a year's time. So kudos to you for pointing out the virtually impossible task Torre had ahead of him.

Posted by Marie Leone | Oct 22, 2007 10:01 AM ET

Term of Contract

One key point this article fails to mention is the term of the offering from the Yankees was only one year. Retention incentives is also a key component for any executive compensation program. I think part of Mr. Torre's challenge to accept the offer in part was the term. As any manager knows, to start or change an organization takes a least a couple of years. If the Yankees truly wanted to keep him, then rightfully should have offered him a multi-year deal.

Posted by Adam Gelles | Oct 22, 2007 9:30 AM ET