Fool me twice - shame on me!

In an article today from Fortune magazine (http://money.cnn.com/2009/11/18/news/economy/executive_pay.fortune/index.htm), a hot button topic is talked about again - executive pay.

This is something that just can't seem to stay out of the news, especially with a Wall Street Journal report that in 2008, Sanjay Jha, the new co-CEO of Motorola received $104 million in compensation. How can a number that astronomically large still exist in these financial times, even if most if it is based on stock options? In 1929, Eugene Grace, the president of Bethlehem Steel, made the most money in the nation. He earned, which in 2009 dollars equals $20.5 million. Clearly Jha makes even five times more than that, adjusting for inflation.

There was a large cry about pay for executive after the financial horrors of the Great Depression. In 1936, Fortune asked in a national survey," Do you think that in general the officials of large corporations are paid too much or too little for the work they do?" 55% of the respondents said the officials were paid "too much." I don't think you could find 45% of people today to think that CEO's are paid too little.

When you ask most people what they think of when they hear CEO and compensation, this image comes to mind. The CEO gets paid too much, and they get it regardless of whether they truly deserve it or not:

We are hopeful that this recession is about to end, and the GDP of the country can begin to grow again. The worry is that executive pay will fall back to it's old traps - where Boards "reward" CEO's and other top level managers with large compensation packages, regardless of the results they have actually produced. It is worrisome to think we as a country could fall back into our same shortcomings, which helped put us in this financial mess that we just had.

In order for companies to not only survive now, but survive in the long run, the leaders there need to remember that now is not the time to fall back on bad habits. They can't freely rewards themselves and board members outrageous salaries, or else we will be right back where we were the past 18-24 months. Leaders need to take the reigns and decide how they want to define their culture. They need to focus on results, and the bottom line (and high pay will affect the bottom line). Leaders now more than ever need to help employees reach their greatest potential. That will be hard to do when the CEO is making 150% more than the employee they are trying to inspire.

The companies that are still around survived this financial Darwinian test. But now is no time to just rest on those laurels. Companies need terrific leadership to continue to steer the ship. One thing these leaders need to remember is the negative PR, both internally and externally, they will have to face if they go back to old compensation models. The best leaders will fully grasps the new nature of corporate ownership and focus on economic performance for everyone - not just their own paycheck.

He just keeps doing a great Job(s)

In an article posted yesterday on www.cnn.com, there was a story about Fortune magazine naming Steve Jobs CEO of the decade. This story shows just what a remarkable leader Jobs is, and how he has been able to constantly reinvent himself and the industries he works in.

http://money.cnn.com/2009/11/04/technology/steve_jobs_ceo_decade.fortune/index.htm

"It's often noted that he's a showman, a born salesman, a magician who creates a famed reality-distortion field, a tyrannical perfectionist. It's totally accurate, of course, and the descriptions contribute to his legend." This is a quote from the story that sums up Jobs perfectly. He helped create Apple in 1976 and helped it grow in the 1980's, then got forced out, only to return and help revolutionize the computer and technology industries now. Most entrepreneurs that wind up leading an industry are part of the wave of people creating the industries. In Jobs' case, he joined existing industries such as music, movies, and cell phones, and wound up dominating them.

The article talks about how Jobs was part of remaking four businesses during his career, which makes his trademark line "one more thing" seem that much more appropriate. What makes Jobs' companies so amazing is that almost everyone knows about them (and him) and how successful they are - even people that aren't technologically savvy or follow the business markets closely.

"Jobs is all about business. He may not pay attention to customer research, but he works slavishly to make products customers will buy." This is another quote that shows what makes Jobs so successful. He is a tireless work-aholic (he had a liver transplant and was back working within a year) who " is a visionary, but he's grounded in reality too, closely monitoring Apple's various operational and market metrics. He isn't motivated by money," says friend Larry Ellison, CEO of Oracle Rather, Jobs is understandably driven by a visceral ardor for Apple, his first love and the vehicle through which he can be both an arbiter of cool and a force for changing the world.

Apple was worth about $5 billion in 2000, before this latest boom of a "digital lifestyle" strategy. The company is now worth $170 billion, and is more valuable than even Google. All of that occur ed in one decade, as Jobs returned to the fore-front of visibility for the company.

Jobs saved the company from the verge of bankruptcy by leading a successful organizational transformation. When he took over in 1997, Jobs completed the hiring of a new management team, which included several executives from his previous company. Those new hires would form the nucleus of the Jobs brain trust for nearly 10 years. The first product they put out was the highly successful iMac, which helped move the company in the right direction both in terms of product line and cash flow.

His close attention to every detail is what makes the company so successful. He's involved in details you wouldn't think a CEO would be involved in," says Ken Segall, a former Chiat/Day creative director who has worked with Apple on and off for years. Jobs commissioned the iconic "Think different" campaign, says Segall, well before any of Apple's new products were introduced -- or even described to the ad team. "He'd say, 'The third word in the fourth paragraph isn't right. You might want to think about that one.' "

Fortunately, Jobs' health seems to have stabalized, and he is back leading Apple again. Having a charismatic, intelligent, and dedicated leader like Jobs around should keep this company thriving and growing for many years to come.