Business executive • MAY 11
...a top manager of a large firm can do more damage if he messes it up; large firms generally have more resources than smaller firms, they hire (and pay) the best
something a bit more interesting. You have to realise that the directors on these committees are usually CEOs or ex- CEOs themselves. Therefore, they compared the salaries of these director CEOs to the salaries of the CEOs of the companies for which they served on the remuneration committee. There was a strong relationship between them. An increment in the average salary of such an outside director with, say, $100,000 was associated with a jump in salary of $51,000 for the CEO, after statistically correcting for all the results due to the effects of company size, profitability, etc.! The team argued that this association could only be the
result of some sort of psychological/social comparison process. The directors on the remuneration committee who decide on the CEO’s salary simply determine his pay by looking at what they themselves make at their companies. Apparently, they don’t feel hindered at all by irrelevant issues such as the firm’s actual performance during the tenure of the CEO. And who do you think usually determines who gets
invited to serve as an outside director for a firm? Yes, it is generally a company’s CEO who nominates new outside directors. That makes it rather tempting for CEOs to nominate only very highly paid peers to serve as directors on their boards. The more highly paid are the directors who you put on
your board, the more handsomely they are likely to reward you. Thus, their wealth may indirectly boost your bank account. The last people you’d want on your board are those who are on a meagre package themselves, because they would likely curb your income as well. Instead, bring in the rich guys; they’ll make you rich too!
Book offer
Management Books 2000, the publishers of EQ Checklists, are kindly offering Business Executive readers who wish to purchase this fascinating book, a special price of £10 per copy (including p&p in the UK). Simply phone (00) (44)1285771441/2 and mention BEX offer.
Competition
Regrettably we have had to hold over our competition for this issue. Sadly, too, we have to report no prizes for our February competition. None of the entrants came anywhere near the editor’s count (27!) of awful buzz- speak. So, all you competitors – better luck next time.
Quote …! I
n our Bookstore you will find a short review of “EQ checklists”. These quotes, some inspirational, some amusing, some from long ago, others more recent, are taken (with
permission) from this book. All repay a great deal of thinking about for they are relevant to our daily and working life. Some are well-known; others will be new to you. All have
implications for the way we manage, communicate with, and generally get on with people. The range of philosophies expressed in these short quotations encompasses the aspirations of all of us (I hope).
‘If we aren’t willing to pay a price for our values, then we should ask ourselves whether we truly believe in them at all.’ Barack Obama (current us president) ‘It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change.’ charles darwin (author of “the Origin of the species”) ‘The one unchangeable certainty is that nothing is unchangeable or certain.’ John f. kennedy (former us president) ‘The worst of all deceptions is the self-deception that we no longer need to learn.’ plato (early Greek philosopher) ‘Lifelong learning is vital’ Bill Gates (founder of microsoft) ‘I am learning all the time. The tombstone will be my diploma.’ eartha kitt (entertainer) ‘I am always ready to learn, although I do not always like being taught.’ Winston churchill (uk’s great wartime leader) ‘Never leave till tomorrow that which you can do today.’ Benjamin franklin (early us statesman and polymath) ‘One worthwhile task carried to a successful conclusion is worth half-a-hundred half-finished tasks.’ malcolm s. forbes (Owner of Forbes Magazine and financial commentator) ‘The only limit to our realisation of tomorrow will be our doubts of today.’ franklin d roosevelt (former us president) ‘Meetings are indispensable when you don’t want to do anything,’ John kenneth Galbraith (economist and author) ‘Quality is doing it right when no one is looking.’ henry ford (motor manufacturer) ‘Be a yardstick of quality. Some people aren’t used to an environment where excellence is expected.’ steve Jobs (founder of apple computers) ‘Getting good players is easy. Getting them to play together is the hard part.’ casey stengel (noted baseball coach) ‘Someone’s sitting in the shade today because someone planted a tree a long time ago.’ Warren Buffett (World’s foremost investor)
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