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November 25, 2008

Would you work for $1 a year?

There are two sides to the argument on executive pay.

One says that it is beyond what mere mortals should earn for services rendered, and often it does not align with the performance of the company. The other side says that if you pay peanuts you get monkeys.

I'm on both sides of this argument.

Corporate leaders should be well rewarded. very well rewarded. This is not an eleemosynary activity. If you think that the best organizations are going to continue to attract the best leaders using the $1 / year model , then you are tragically mistaken.

What you will get is self made people who are financially secure and doing it for love. many of those are there in the world? The short answer, not enough!
CEO's and game changing executives must attract good packages or nobody is going to aim to achieve this level of success. Why would they? But there is no doubt that their packages must be directly tied to their performance and the performance of the organization. 

I'm not talking about share prices. The stock market is a fickle friend at the best of times. I'm talking about the standard stuff. Revenues, profitability, safety, environmental records, projected future values from their work this year.. and so on. 

Nothing dramatic, nothing revolutionary, just plain common sense really. While Tom Peters rants about the CEO's of the motor industry not having the intestinal fortitude to take the $1 a year option, my question to him would be... would you Tom?

Abuse of power is one thing, incompetence is another - and both should be punishable with very real consequences for failure. But who wants to work for $1 a year...? Would you spend a career in pursuit of a role that paid you $1 a year?

Of course not...PC gone mad.