Dude, where's my pay?

October 23, 3:18 PMLeadership ExaminerSteve Arneson

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OK, so I probably shouldn’t make light of it, but the top 25 leaders at the seven companies that the government is “sitting on” in terms of executive pay just got some very bad news. Wow – cutting their total compensation by an average of 90%? Capping pay for these roles at $200,000 a year? I don’t know about you, but that’s my definition of a wake-up call. I presume this is just until they pay back the TARP money, although that fact was sort of hard to find in the news articles. Even so…doesn’t this raise some interesting scenarios?

How’d you like to be one of the top 25 executives at AIG, GM, Citi, Bank of America, Chrysler Financial, GMAC or Chrysler right now? Think they’re getting much productive work done today? My guess is they’re huddled around the executive water cooler discussing this latest turn of events. I wonder how that conversation played out at home last night – “dear, we’re going to have to do a little belt-tightening for awhile” was a theme, I’m sure. For these guys, this is worse than getting fired – because the severance package would have been a lot more lucrative than having to stay at your post!

I keep thinking about the 26th person on the pay scale at these seven companies. Let’s say its some hard-working executive in a staff role – oh what the heck, I’ll say it – it’s probably the # 2 HR person. Suddenly, they’re the highest paid person in the company! Woo-hoo! Think they’re walking a little taller down the hallway this morning?  As Borat would say: "I'm king of the castle, king of the castle".

On a more serious note, I would imagine this is playing really well in many parts of the country, and across several different socio-economic levels. “They got what they deserved, etc.” But is this a good basis for public policy? Do we want the government controlling salaries in a free enterprise system? That’s why I’m sure this is temporary…but my goodness, what a temporary surprise for these 175 leaders! It would be interesting to track (and I’m sure someone will) whether or not these companies  “make these leaders whole” down the line or at what rate these leaders will run to the exits and look to leave the ship as fast as they can… I suppose both are quite possible.

If you work at one of these companies, I wish you a quick recovery – America needs you. I’m sure you’ll be busy turning around the company, because there’s a good chance you won’t be going on many expensive vacations in the near term (sorry, couldn’t resist). If you’re a high level leader at a company that’s not on this list, maybe it’s time to give thanks again for that little piece of paper that comes every two weeks in the company mail – you know, the one with the all the zeros. I know you’ve earned it, but it never hurts to be grateful for the opportunity and privilege it represents and enables. After all, you escaped this week without a 90% cut in pay… and that’s worth celebrating!