Comments

Well, Thanks Mr. P - for depressing me on a glorious sunny Monday morning ;-)

My best to Dodger - and, my cat Moxie could do a better job than these CEOs. At least he knows enough to not to - um - urinate where he eats.

Unfortunately, this problem isn't just in the F500. There are thousands (millions?) of serial CEOs out there in the F5000, F10,000, F50,000 that keep moving from company to company, making a mil or two and then moving on to the next company.

I call it "The 'C' Tribe" Once you're in - pretty much no matter what(multiple companies failed, class action suits, embezzlement, etc. etc.) you stay in. Baffles the hell out of little ol' me.

Posted by Mary Schmidt at March 10, 2008 10:06 AM

And, obviously, that should be "class" not "calls" suits above.

Mary, I fixed it for you.--Cathy Mosca

Posted by Mary Schmidt at March 10, 2008 10:07 AM

Sorry Dodger...my Pug Teddy would have done better. She would have slept through all the meetings and let things go without interference.

Posted by Joel Heffner at March 10, 2008 10:10 AM

I am depressed, Mary. So why shouldn't you be? (Of course I'm also depressed because Spring in Vermont is still a month-and-a-half or more away.)

Posted by tom peters at March 10, 2008 10:25 AM

To be even more depressing, I read a piece recently that suggested that the bankers' fees for the major corporate acquisitions of the last ten years exceeded the overall profits of those mergers!

I think putting dogs in charge is a good idea.

Posted by Leslie Reissner at March 10, 2008 10:39 AM

Always worth remembering that if stuff looks too good to be true it probably is - and yet cycle after cycle people in business kid themselves that the natural economic principles are somehow different this time round.

I bet there are a load of people at grass roots level who where thinking "this can't be right"

In terms of CEOs and serial snr managers the one thing I am really curious about is what goes on in their heads about this stuff. Inside do they think crap I really screwed that up and then are very good at putting a positive spin on it or are they completely self delusional?

I know if I goofed big time and cost a load of people jobs and security my self confidence would, rightly, take back stage for a bit whilst I made damn sure I learned and reflected on the failure. There is something just plain wrong with being able to charge forward to the next job and not give a monkeys about what has happened.

Posted by PaulH at March 10, 2008 12:13 PM

OK...I will put my dogs (and cats and horses) in the mix as well. But only if there is a good health plan benefit. Since we only adopt pets that are one step away from, well, let's be kind here, euthanasia at the local humane society, what we are paying in vet bills would rival CEO pay! But they must be good vets...none of their farts are causing neighborhood evacuations. Welcome home Tom and bon voyage

Posted by Mike Neiss at March 10, 2008 1:46 PM

Welcome back Tom! and thanks for the rant! When will the guys at the top realize that their only job is to make sure the guys at the bottom have everything they need to wow the customer? Sheesh!

Posted by Lois Gory at March 10, 2008 1:56 PM

I remember a few years back when I heard the three most terrifying words I had ever come across before; "Interest only loan". Now, I'm not an economist - hell I'm not even that bright - but when I learned that these loans were being made as mortgages to the least qualified loan recipients, I knew we were in for some serious trouble down the road. Now that the s*%t's hit the fan, it amazes me the number of people who didn't see the danger as well.

NOTE: New scary phrase: Collateralized debt obligations

These genius CEO's, with their high priced quants, Nobel prize winning brain trusts and gazillion dollar compensation packages should have known better, but they forgot one thing (ok, a bunch of things, but we'll start with one). People are not rational or logical. They are irrational, emotional and illogical - it's what makes us human. And there's not a quant in the world (or an isolated, billionaire CEO) who can wrap their head around that.

What these CEO class types seem to be able to wrap their heads around is that if they make enough money ("let's see if I have a stack of $100 bills that can reach the moon and my CEO buddy has a stack that reaches twice that far, I must be in abject poverty.) nothing else will matter. Be damned the little people who might get caught up in some form of market realignment, obviously they don't know as much as the star CEO does to avoid the pit falls.

Unfortunately, it's the little people who ultimately pay the bills and pay the price. They are the ones who notice that customer service at Home Depot tanked when Nardelli got rid of most of his professional staff. They are the ones who don't buy Chrysler cars because the cars suck (and stop buying Mercedes cars because they seem to start sucking too). Little people are the ones who default on their interest-only, adjustable-rate mortgages because they believed the broker who said that any future "adjustments" would be modest ("dude, interest rates are at an all time low and only going to go lower"). And it's the little people who lose their jobs, health-care benefits, and retirement funds when their billion dollar CEO's Hubris gets the better of him.

I believe it was Chuck Prince who, the week that the bottom fell out of the market, was at a bridge tournament and had left strict orders to not be disturbed (too late). He turned off his cell phone, barely checked his email and had a staff too scared to pick up the red phone and yell for help. It's one of the greatest modern day Nero stories I've heard in years. This guy should go straight to jail simply for stupidity - do not pass go, do not collect your ridiculous severance package on the way.

If I read one more quote from a financial sector CEO who blames the bankrupt homeowner for not reading "the fine print" I think I'm going to scream. If I hear one more CEO say that their ludicrous compensation is based on the company's performance "before the crisis", I may hurl. And if I see one more story about the retiree who is freezing to death in their own house because they are spending every last penny of their Social Security check to make less than a minimum payment on their refinanced mortgage I think I'll cry - again.

My cat, who spends half the day licking himself seems more attuned to what's happening in the world than these CEO's and a lot more caring about how others feel. You nailed it Tom, Dodger gets it. The cabbie gets it. My neighbor who just had a baby gets it. Why don't these CEO Clowns (no offense meant to real hard-working clowns) get it? My guess is because they live in a system where there is virtually no consequence for their actions.

So long as they don't steal - as defined by law - they can get away with killing their companies, the credit markets and the livelihoods of countless people, and live out their days in a safe tax haven surrounded by all of their other CEO class friends.

Posted by Andrew Hayden at March 10, 2008 2:11 PM

Whenever something goes awry in my business, I've long touted my dog Paddy as being better than some poor guy whose just dropped a clanger. What with competition now from Dodger, Moxie, Teddy et al I'm worried the going rate for CEO's (Canine Executive Officers) is soon going to go through the roof.

Tom - nice rant. Well researched and eloquent. But (over) familiar stuff. How about some ideas for addressing it? Either you let the market sort it out or you impose rules: there's no middle ground. So accept it as the downside of capitalism or figure out how to mend it.

Here's a suggestion: companies generally pay out 50% of profits in shareholder dividends. How about we cap executive pay against dividend levels as well?

Posted by Mark JF at March 10, 2008 3:59 PM

Fabulous rant! – Integrity goes out the window it seems.

Bertie is one of my two 6 month old puppies. Last week Bertie proved he clearly has CEO potential - ruining my cutting edge communication system. My connection to the impressive FSW Webinar was disabled by little Bertie chewing through my Skype headphone leads. With that sort of initiative (keeping people isolated from information) it is surely only a matter of time before Bertie is head hunted. However a word of warning if our dogs are promoted to CEO;

‘Don’t accept your dogs admiration as conclusive evidence that you are wonderful’ –Ann Landers

If this integrityless, scandalous, obscene, waste of money were not fact I would have sworn Tom had made this up.

I have to use humour to cope with this because on the same day I read Tom’s rant I write yet again that 20,000 people will die today on our planet – mainly children - due to extreme poverty.

‘Sick’ is the only word I can find in my vocabulary!

Mark – constructive suggestion? – Require the outgoing failed CEO’s to donate their pay offs to help prevent the deaths of another 20000 people tomorrow.

Posted by Trevor Gay at March 10, 2008 5:54 PM

don't want to rain on your rant -)

but you defended SarBox a while ago...my question is why do controls fail over and over...where were the auditors, boards, regulators - again?

Posted by vinnie mirchandani at March 10, 2008 7:18 PM

Now I am really worried - We don't have any pets in my family and I am concerned about the lack of CEO potential......

Posted by PaulH at March 11, 2008 3:27 AM

Engage a dog as your professional coach immediately Paul - the fees for Bertie's services are competitive :-)

Posted by Trevor Gay at March 11, 2008 4:00 AM

I will put my dogs (and cats and horses) in the mix as well. But only if there is a good health plan benefit. Since we only adopt pets that are one step away from, well, let's be kind here, euthanasia at the local humane society, what we are paying in vet bills would rival CEO pay! But they must be good vets...none of their farts are causing neighborhood evacuations.

Posted by karina at March 11, 2008 7:20 AM

Andrew Hayden...many thanks for your thoughtful clear comments. I wonder, however, if your comments speak more to the nature of people as being naturally good...naturally trustworthy... rather than illogical or irrational? We want to trust others. We want to believe in the good of others. We do not come here as skeptics, present business acumen aside.

While the "fine print" SHOULD be read, most of us--including those with excellent credit scores and fat bank accounts -- want to believe that those who are seeking to sell us a product so basic as a house, would certainly not be so cunning as to dupe us out of something so essential to our humanity all for the sport of business sales. After all, even the CEO "clowns" that you spoke of have need of shelter.

The great danger in situations like these is the furthering malaise, the furthering erosion of trust in our universal core basic values which affect a great distrust in others. This is the beginning (or continuation) of a seeping pervasive deep mistrust that affects the culture en masse. Our actions have great consequence beyond immediate gain or loss.

Posted by Judith Ellis at March 11, 2008 10:20 AM

Trevor...I loved your comments.

Mark JF...brilliant as usual.

Paul H...Loved your sense of ethics. Thank you.

Posted by Judith Ellis at March 11, 2008 10:23 AM

A while back, I discover the problem with our C level execs. It was really 4 things.
1. There was a door on the entrance to their offices.
2. The door was always closed and was solid (no window).
3. The door pushed back when you tried to open it (hydraulics, of course).
4. If you managed to get the door open, there were three harried secretarys to block you from going a step further.
I always wondered why we shouldn't put the secretarys in the back offices and put the execs at the front desks. The secretarys could get their work done and the execs could still BS with each other.
Then again, I always have been a rebel ever since reading "In Search of Excellance." How about MBWA?

Posted by Al at March 11, 2008 10:33 AM

As a group, CEO's and the financial management industry keep making the same mistakes because it keeps putting money in their pockets at the expense of shareholders, employees and customers. A great example is trying to develop and grow the company by mergers and acquisitions. Synergies shmynergies. I have this quote I kept track of:

"When asked to name just one big merger that has lived up to expectations, Leon Cooperman, former co-chairman of Goldman Sachs' Investment Policy Committee, answered, 'I'm sure that there are success stories out there, but at this moment I draw a blank.'"

As long as the sharks keep getting rich by ripping off the stakeholders it will keep happening, whether it is successful or not.

Capitalism with integrity is trying to improve the value of the company for the long term benefit of the shareholders, employees and customers. Capitalism without integrity is lining your pocket at the expense of shareholders, employees and customers. Unfortunately, it’s almost impossible to legislate integrity (considering the lack of integrity of most lawmakers in most governments around the world, this should come as no big surprise).

Sarbanes-Oxley holds the director’s feet to the fire, but unfortunately only close enough to warm them slightly, but at least it’s a step in the right direction. Now it’s time to go after the CEO’s too. Government can put rules in place that limit bonuses (and limit what the bonuses can be based on), make it easier for directors to fire CEO’s without fear of legal reprisal, and significantly limit or eliminate payouts when the CEO leaves. Part of the deal must be that the more you make the easier you should be to fire. The performance of CEO’s and directors would improve significantly if their sense of entitlement disappeared and if they had to start looking over their shoulder. A CEO should be at least as accountable for their performance as the mail room clerk.

I agree that the law shouldn’t limit executive pay, but imagine how everyone’s paycheck would be affected if the CEO’s pay was limited to 20 times the lowest pay in the company.

Posted by Bob Walker at March 11, 2008 11:13 AM

Tom, two questions (sort of) -

1. The cycle of CEO's doesn't seem to foster substantially new leadership. Welch likekly wouldn't have risen to power in the Welch-run GE. Welch would have fired the Jack Welch who rose to power. Perhaps not. The quesiton: What motivation do the F500 (or any company) have for coloring outside the lines that every F500 company seems to have established? Who wants to break the mold and go a different route? It seems the experienced CEO, even those with a disasterous past, are the safe bet for boards.

2. From a mathematical risk perspective - it seems to me only a slight risk for a board to closely examine what they feel a company needs (to grow, turnaround, etc.) - and look in non-traditional places for a leader. I know boards are self-preservation societies - and I suspect THAT is the real crux of many problems - but why are there not even a few boards courageous enough to look in nooks and crannies for the passionate leader who may be able to elevate the company to new heights, with a contract that is heavily performance based? Such men and women would likely jump at the chance - and the "out" clause would prevent any serious damage to the company. After all, aren't boards supposed to the ones holding the CEO accountable. If the CEO is able to do too much harm, seems to me the board is the group with no accountability.

For non-traditional leadership one need only look to Bruce Pearl, the wonderful character who has led Tennessee men's basketball team to new heights. I'd venture to guess there are many Bruce Pearls in various companies fully capable of bringing passion and pursuit for excellence to their enterprise - if only somebody would give them a chance.

Posted by Leonard Klaatu at March 11, 2008 11:21 AM

So I take it you wouldn't think a 'ready-fire-aim' approach to things would have anything to
do with the morgage meltdown?

Posted by al at March 11, 2008 3:58 PM

Love this post Tom. We all know that corporate finance managers (CFOs, FDs and the like) should be watchdogs and not bloodhounds BUT then if there needs to be a bloodhound once in a while, then SO BE IT!

Now about Jerome Kerviel – He has been made a COMPLETE VICTIM OF CIRCUMSTANCES – When he clocked profits for SocGen in the previous quarters / years using the same / similar trading-strategy & circumventing auth-limits, he received a huge pat on the back from his bosses (bonus included!) but now, when he has “OVEREXPOSED” the bank to a great deal of volatility resulting in huge open positions (incl losses), he has been made a SCAPEGOAT – now, my question – WHAT WERE THE BOSSES DOING?

I believe there should be a clear distinction (in roles performed) between the ‘back-office’ & ‘front-line’ staff of an investment bank (esp trading floor). People who were previously handling back-office activities SHOULDN’T BE ALLOWED to enter the trading floor and vice-versa. All this boils down to the simple principle of SEGREGATION OF DUTIES – not to be hanging as a credo or used during appraisal sermons to subordinates but to be implemented & followed in LETTER & SPIRIT.

Posted by K.Sriram at March 12, 2008 1:41 AM

K Sriram - I think your analysis is good but it misses one fundamental point. If Kerviel's previous activities broke bank rules and his bosses actually bonused him for it, then his bosses should be fired. We can all argue about rules and regulations and the stifling of initiative etc but rules are rules. Either you get bonused for breaking them or you get fired: you don't get treated according to how well or bad your breach turned out to be.

Posted by Mark JF at March 12, 2008 3:42 AM

Without specific knowledge of the intricacies of investment banking, it is nonetheless probable that in any institution the letter and the spirit are both foundational and operational to ethics and sustainable success. The letter provides guidelines and the spirit produces results. Both synthesize the brand and enable the organization to move beyond itself.

I agree with K. Sriram on the distinction of roles but as a way of providing a platform for both management and talent to exercise their abilities as team members in a system of rewards and consequences. Yes, consequences are still needed to safeguard systems. Systems, including political ones et al, need to be overhauled beginning with a mindset, an awakening. Perhaps we are experiencing such an awakening now; if we will heed it.

Capitalism is a great system. But as with any system, it needs constant overhaul, constant review. If our recent practices have been to skate so close to edge so as not to be prosecuted for wrong doing, but in our doing leave a wake of devastation, there remains to be consequences to be levied.

Blind oversight or being overly sensitive in our enlightened environment has perhaps lessened our ability to see correctly in calling a spade a spade. Perhaps a sense of personal networks may have also played a role in blind oversight, as in I have supported you in this since you have supported me in that, regardless of the effect. I trust that this is not the norm.

Consequences and oversight have to be looked at beyond current loss or profit to the establishment of the kind of society and business environment that we would like to live behind. And there will most certainly be others who will come after us. What are we leaving them? People should be the focus now and in the future. As history points out, they will respond perhaps in great consternation. Let's self-regulate.

Posted by Judith Ellis at March 12, 2008 3:57 AM

Lesson rather than hirung people who talk about synergies and themselves, look for leaders who have true values and talk about ethics, values and the consequences of their decisions. Look for people who are more interested in providing quality goods and services without excuses. These types of leaders will prosper and their companies will prosper. They will then make money, the company will make money and the cunsumer will be happy and satisfied.
Also remember that these leaders need to make value based decisions every day and work on this every day. It is not easy. It is hard work but well worth it.

Posted by Bob Smith at March 12, 2008 1:07 PM

Amen - fantastic Bob - thank you!

Posted by Trevor Gay at March 12, 2008 1:20 PM

Tom Peters does stand up comedy as well!!!

Love it made me grin, stylish.

Posted by Patrick at March 12, 2008 2:29 PM

You are all sprouting the holier than thou line here.

CEO's are human (believe it or not) and probably doing their best to try any make a difference in the way that they see best.

Just like Tom Peters is doing his best in sprouting pearls of wisdom with regards to management and leadership.

Whoever can sit here and say that they have never done something in their job that has ended up as an almighty mess should stretch themselves to the edge a bit more.

It's just that the CEO has a direct indicator (bottom line) for their performance as opposed to Tom who could say anything and not specifically have a test to prove or disprove what he is saying is correct.

Posted by Peter at March 12, 2008 10:22 PM

Peter...I'll let TP come to his own defense, should he decide to even do so. Your comment seems a little misguided; it is not about being holy, as we can all undoubtedly attest to less than holier than thou performances. What is largely addressed here is the lack of ownership of "screwups" and the consequences attached to them.

In reading TP's recent slides in South Africa, these equations are applicable here, even though the context may be slightly varied:

S = F ( ) Success is a Function of....

S = F (PT 100% A "T" S, E "NMF" - TT) Proactive timely, 100% apologies for 'tiny' screwups, even if not my fault (it always takes two to tango.)

S = F (AMR, NBS - SG) Acceptance of mutual responsibilities for all affairs, no blameshifting, scape goating.

S = F (APLSLFCT) Awareness, perception of little snubs - and lightening fast correction thereof.

After these things are done... there is grace for the "adversary" and the "wounded," although there should be consequences for our actions. (The degree is debatable.) But the good thing is there is always grace. First, admittance is necessary. But many CEO's may have a greater resistance to admit screwups or shortcommings because of the intense external pressures applied to their position. Grace is available.

S = F (G) Grace

S = F (G) Grace toward adversary.

S = F (G) Grace toward the wounded in bureaucratic firefights.

Considering this broad sense of grace...how can there be a position that is holier than thou? Largely the comments here are about the ongoing process of regulation and re-alignment.

Posted by Judith Ellis at March 12, 2008 11:31 PM

Tom, Maybe you could become a rapper.

Posted by chandra kumar at March 13, 2008 1:35 AM

Yeah, the problem is the "bottom line" is the direct indicator of CEO performance, and hence. compensation. And no real accountability for the "authenicity" of the results reported, or the legalities of the processes used to achieve it. And a severance clause negotiated on the front end that "rewards" performance, regardless of how stellar or putrid it might be. What you might interpret as a "holier than thou" is actually "mad as hell" I am sure many have made an almighty mess of things on the job and were immediately terminated without severance. That's accountability! Did I mention that accountability seems to be lacking where CEO performance and compensation are concerned?

Posted by Dave Wheeler at March 13, 2008 8:48 AM

Bravo, Dave! Good to hear from you.

Posted by Judith Ellis at March 13, 2008 9:32 AM

I wonder if you could argue that the reason CEOs negotiate such severance packages is because they know their average job life expectancy is very short. The whole thing become self perpetuating.

Of course if any of them had any self respect they would return money they felt they hadn't earned...........

Posted by PaulH at March 13, 2008 10:01 AM

I've wonder if a good way to determine CEO compensation would be to vote on it. Not through shareholder proxy or director control but something more representative of all "customers". Send out a form with 5 levels of pay, for instance, to employees, shareholders, a customer base, and the community, and let the popular vote win. Could be a simple way to let the CEO know how they are "really" doing.

Posted by Jah at March 13, 2008 10:12 AM

Agree 100% Dave – and good to see you back.

By the way - and this is a deadly serious question - Does anyone know if CEO's anywhere in the world are EVER explicitly given targets and therefore judged by the following - INSTEAD of the 'bottom line';

buy brand viagra without prescription

*Contentment of employees
*Turnover of front line employees
*Levels of customer satisfaction

If not - why not? (as if we didn't know) I suspect it is always and only about the easily measurable 'bottom line' and therein is the nub of the problem. I say long live the 'soft' side of management. Too often (sadly) the 'soft' side challenges find themselves in the 'too difficult' tray except for a few excpetions such as Ricardo Semler.

Posted by Trevor Gay at March 13, 2008 10:13 AM

PaulH - spot on as always :-)

Jah - what a fabulous suggestion!! - I suggest voting by front line staff and customers ONLY - what a wonderful concept - thank you!

There are CEO's in healthcare who will not meet a patient for years - if ever - during their tenure of a CEO job. That just cannot be right.

Posted by Trevor Gay at March 13, 2008 10:30 AM

Trevor

I can't speak about CEOs but I have worked for companies where members of the board had specific objectives around CSAT (both transactional and periodic) and staff turnover.

I work in the software industry which tends to be very aware of the direct and rapid impact that those areas can have on the bottom line.

How much money was attached to these I can't say. Also I don't know if it is common in other industries

Posted by PaulH at March 13, 2008 10:30 AM

Oh...no.... PaulH. That would be quite disturbing...indeed. In spite of our professional experiences and laudable track records, we are all undoubtedly working out of some element of insecurity. Perhaps it has more to do with the CEO's foreknowledge that he cannot personally lead every aspect of the company, considering the vastness of these companies and the fierce inner wranglings often entailed with this position.

Advanced severance may be a way of acknowledging the intense work and worry involved in running some of these companies. (Some may be saying that why they get the big bucks, eh?) It may be a matter of saying if I can't win the battle because of intense politics that came with the company over a certain period of time, I need security for my time and immense effort. CEOs are also enduring some stuff!

There may also be an element of the hunt, the game here. If this is so, the game should be limited to the golf course where the lives of the team and customer are not directly enacted. I find it very difficult to believe that the majority of CEOs do not have the best interest of the team and customer at heart. If not, their intentions will eventually be shown and consequences should be applied.

Posted by Judith Ellis at March 13, 2008 10:52 AM

Judith - great comments and I'm sure you are absolutely right that most CEO's have the best interests of the team and the customer at heart. Certainly all CEO’s I’ve known in the healthcare business are conscientious, caring people who are motivated for the right reasons but I don’t see that as the real issue. Those qualities are possessed in equal volume by the cleaners who work in healthcare as well. What really is obscene - as Paul implies - is the amount of money that seems to be paid for failure. I would not have a problem with that either if it applied equally to the cleaner who gets sacked when the contract is lost and all she gets is the standard national rate of redundancy – if she is lucky. That is not about fairness - it is about justice as far as I can see.

Posted by Trevor Gay at March 13, 2008 12:20 PM

Hey Trevor...there will be no disagreement here about the association between performance and salary. This should be a given.

My point was directly in relation to Paul's comment about whether CEOs negotiate severance packages with the clear intentions of not being around for very long. This implies a sense of disingenuousness and lack of real effort to turn the company around which will undoubtedly produce a lack of respect for the team and the customer. This will affect the bottom line. The idea of severances being self-perpetuating also implies a sense of insincerity. I would imagine that such a package is negotiated based on the past performance, professional experience, and intangibile qualities of the CEO.

Not addressed in your comment is the element of internal politics and wranglings, and the vastness of such companies that can inhibit the progress of a CEO's plans and actions no matter how brilliant and savvy he or she is. (This is, of course, absent self-perpetuating insincere scenarios.) Perhaps this goes to performance, but in the mind of the CEOs of such companies there may be intense effort over a period of time but because of the inherent environment the fit is just not right. Should they not be well compensated for their immense efforts? Perhaps the issue comes when there has been repeat lack of performances that resulted in great severance packages. Maybe then a different course of action would be advised. And maybe the search for CEOs should include a different process.

I must admit to feeling somewhat of a fraud in commenting on such matters that I have no direct experience. I have not been a CEO of such a company, nor have I had direct professional relations with such executives of multi-nationals. I might have had, however, close relations with a few, as our brilliant Hillary Clinton has had with our former president. I still, however, feel inadequate to speak to such issues. But I have...so...here it goes...

Posted by Judith Ellis at March 13, 2008 1:39 PM

Hi Judith – I suspect you are right about the intentions of CEO’s being sincere. Having said that there were always stories in my healthcare career of people moving around every two years on their upward career path on the basis that you are not normally found out until after two years.

In respect of the internal politics and wrangling that is a fair point too but those same internal politics and wranglings go on at every level of every organisation. I would expect the CEO to have to deal with these things as part of the job – it goes with the territory as far as I’m concerned. Sure I have understanding but not sympathy.

I too have never been at that level - I was never anywhere near that competence but I think we can all have an opinion about it. My opinion is that if you apply for the job you put your head above the parapet and you should expect the flack and you have to deal with it.

Posted by Trevor Gay at March 13, 2008 4:09 PM

While everyone's role is important and every team member valuable, the position of the CEO as the leader of the company has a greater responsibility. Hence, one could not hardly expect the CEO's salary or severance package to be commensurate with frontliners. Let's not conflate the issues here.

I am certain that most CEOs do not require or expect sympathy. The mere fact that they were even considered for the position probably infers that they have a certain amount of competence, necessary healthy ego, and backbone that does not elicit sympathy. This would be insulting.

Regarding those who lift their heads above the parapet, this is honorable. These men and women are leaders. Flack...they can probably deal with. The question becomes what he or she does in the position, being aided by a team that both supports initiatives and presents facts.

Posted by Judith Ellis at March 13, 2008 5:11 PM

Ok - My point (perhaps badly put) was not so much to look at the motivation and I am sure that they are mostly sincere.

Why is the severance package sometimes negotiated upfront then? It's the concept of being paid for failure that I don't get. Is it that no CEO would accept the job without it- that implies that in the world of CEOs (even if not in the motivation of the individual) a short life span is expected

Posted by PaulH at March 13, 2008 5:33 PM

Fascinating discussion Judith - I am enjoying our exchange!

Interestingly, the professional soccer players (front liners) over here in England earn mega bucks – more than the team coach and considerably more than the Chief Executive of the soccer club. However I am a pragmatic realist and I know I am comparing apples with pears when it comes to business and entertainment or sport but then I think to myself maybe that is part of the problem - the money in business perhaps goes to the wrong level in the organisation!

I agree with you - I hope CEO’s don’t expect sympathy but if they perceive ‘accepting sympathy’ as some negative thing then this maybe explains part of the problem – do we want human beings or machines with plenty of ‘backbone’ but with no emotions in charge of our organisations? – Give me humans with all our inbuilt frailties every time.

Raising heads above parapets mean there is a distinct chance they will be shot off. I love it when people take risks – it means we will be in a minority quite often. It usually means we are at least trying to do something rather than having things done to us. I find myself in that minority position regularly. That is ok … it goes with the territory and occasionally, just occasionally we minority folks are proved right in the end.

Posted by Trevor Gay at March 13, 2008 5:52 PM

PaulH...your point was well taken. It may also be my bent towards forever understanding all sides, even if at first glance they may appear apparent.

The severance package upfront probably has more to do with the climate, the enivornments of such companies. Many CEOs are inherting these environments that are usually steeped in certain determinations and traditions that they may or may not be able to affect in an expected timeframe.

You never really know how to fight until you're actually in the ring and it may need to go beyond the expected 12 rounds.

Posted by Judith Ellis at March 13, 2008 6:06 PM

OK... Trevor....now you've taken this discussion to another level. Robots are out of the question! But what we do not want either are persons so moved by his or her emotions or every contrary opinion of others that render them incapable of leading effectively. This is disastrous.

Oh...so you are gammed with the leader who lifts her head above the parapet? Great! I assumed by your previous comment that you were leery of such leaders. I loved this action idea that raising your head above the parapet "usually means we are at least trying to do something rather than having things done to us."

Posted by Judith Ellis at March 13, 2008 6:35 PM

It’s coming up to midnight here in England and I need to recharge my batteries with my six hours in the land of nod! My heart usually won the battle with my head as a manager in healthcare which probably explains why I never became a CEO – with hindsight what a great bonus that was for me and probably for the organisation.

I will always applaud those who try things rather than wait. In my experience the people who put their heads above the parapet most are not CEO’s – they more often than not simply tow the corporate line. It is more often people ‘lower down’ the organisation who stick their head above the parapet to object to poor leadership decisions.

Great exchange Judith – I am going to bed! :-)

Posted by Trevor Gay at March 13, 2008 6:53 PM

Sleep well...Trevor.

Posted by Judith Ellis at March 13, 2008 6:55 PM

So, who is hiring these guys?

Posted by nextgenradio at March 17, 2008 4:33 PM

CEO pay for lack of performance was an issue 20 years ago, it was an issue 10 years ago, and still is today. The only difference is that the numbers have grown massively. And yet nothing is done, except that somehow they figure out how to give the next guy more. Let's reward sheisters like Mozilo with not only huge pay packages, but let's throw in $100 million for destroying the company and the lives of tens of thousands of people. I don't mind CEOs making a lot of money. But it drives me bonkers when they make obscene amounts of money, destroy companies, and then we pay them more when they leave to destroy the next company! Where does it end? Apparently in this case the "free market" doesn't work.

I don't think all CEOs are evil. Some are well intentioned, reasonably paid, executives. But some probably deserve the title "evil", and certainly in the current economic crisis their greed and insensitivity can only be highlighted. But unfortunately, they will continue to laugh all the way to the bank while Joe and Jane Workerbee try to figure out how to get to work every day with $4/gal gas, and how to pay for healthcare that increases 20%+ per year.

Thanks for the rant Tom.

Posted by Rick Webb at March 19, 2008 7:41 AM

'But unfortunately, they will continue to laugh all the way to the bank while Joe and Jane Workerbee try to figure out how to get to work every day with $4/gal gas, and how to pay for healthcare that increases 20%+ per year.'

Well said Rick - I am with you 100%. I have known some terrific CEO's - they are not all evil but this pay scandal is a justice issue - nothing more, nothing less.

Posted by Trevor Gay at March 19, 2008 9:32 AM

These guys should be jailed for life.. in solitary confinement... soon.. as soon as possible...

this is terrible!!

Posted by george at March 26, 2008 7:16 AM