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07/21/2010

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So... if there's a connection between high executive pay and poor people management, and a connection between poor people management and poor company performance, can we infer a correlation between high executive pay and poor company performance?

Ah, but causation is quite another thing. No one's presenting data on that!

See the annual Crystal Report, where Bud waxes eloquent on that exact topic every year.

Maybe only old-timers remember Graef (Bud) Crystal from his days heading TPF&C's exec comp practice, long before he wrote "In Search of Excess," so here's a link to an article about his 2010 report on 2009 pay: http://www.businessweek.com/magazine/content/10_20/b4178070113216.htm.

"... can we infer a correlation between high executive pay and poor company performance? " ... Yes in that those Executives have moved themselves to reward-first versus reward-last-if-at-all. Leaders lead from the front, from the rear, in the middle; rarely do they count THEMSELVES into the reward-mix at the end of the project or end of the year BECAUSE they are ALREADY well paid from a total-compensation perspective (re: Servant leadership - remember what that is?). Lead leaders!

d, thanks for a wonderful rant! I love your passion.

Jim, I worked with Bud back then, so know whereof you speak. My suggestion -- read both the Crystal article AND the report.

Here's some ideas . . . Don't like where you work, how your treated, your bosses salary v. your own, your bosses treatment towards you, or all of the above; get a new job. Can't get a new job because of the economy; keep trying, get an education, or start your own business. Sick and tired about the disparity between managers, employees, etc., no one forces you to work anywhere. Just as you have the right to apply to any company you choose and accept that position if you wish, a business has the right to choose how they pay and treat their employees (within obvious limits ie, no beatings, whippings, etc). This is part of the reason why discovery through the use of tactful questioning during interviewing is so important. If there's "maltreat[ment] [of] rank and file workers" it will be reflected in corporate profits. This will either bankrupt the company in the long term, or better managers will recognize this and remedy the situation. Market forces whether it be through the acts of the "rank and file" or through the acts of managers always handle the situation. As I said, don't like the situation, change it or leave it. It's your choice in this free country. Lead by example, act morally, and quit complaining.

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