Expert Perspective by Grahall’s Robert Cirkiel
A December 9, 2008 article published in SeekingAlpha.com says that research has found that “…the executives who are delivering the worst performance are collecting the highest compensation.” So just how linked is poor performance to excessive executive pay?
About 15 years ago I was involved in an executive comp study that, believe it or not, found that pay was inversely proportional to company performance! In other words, the crummier the performance, the higher the pay. The CEO of our client, perhaps trying to justify his pay, explained that the poorer the performance of the company, the harder the CEO’s job and therefore justifying the survey findings. I kid you not.
I guess that’s why garbage collectors make more than major league baseball players – oops never mind. Needless to say it was an honor for me to bask in his wisdom.
Actually what I think the survey illustrated is that the high paid CEO of a poor performing company is nothing more than a mercenary.
Of course it begs the question – what is the appropriate pay for bad performance? Email Robert Cirkiel at email@example.com