Why We Get Up in the Morning
In the week when the SEC revealed its rule on proxy access, a director from the National Association of Corporate Directors (NACD) had his own say on pay.
Bill White told more than 100 directors at NACD’s Director Professionalism course that he wishes compensation committees could be renamed. “I’d like to see them known as contribution or motivation committees,” he said. Bill is an experienced public and private company director and former Bell and Howell chairman and CEO.
In addition to his board service, Bill also teaches applied psychology at Northwestern University in Chicago. “People work best when they love what they do and believe it matters,” said Bill. “Pay is only one part of what makes them turn up and work hard. The emphasis on salary for executives has not been helpful in recent times. Whatever your committee is called, spend more time coming up with innovative incentives and rewards and focus beyond the $$$.”
Bill has it right, I think. I wasn’t happy in the best-paid job I ever held. I understood the mission, but I wasn’t very clear about how I could contribute. I never quite believed what I heard myself saying to my team, partners and customers. I didn’t trust my boss. (This turned out to be good thinking—he later went to jail for taking huge backhanders from a soft toy manufacturer and distributor in the Far East—a giant fake fur fraud case. Real Hong Kong Phooey.) I left after a year and my salary has gently declined while my job satisfaction has risen ever since.
When “Pay Czar” Ken Feinberg imposed his salary cap on executives from TARP companies, many board members feared key executives would leave. Bill reported that in fact 87 percent were still in place. “Where would they go?” he said. Of course, there have been loopholes in the salary rules imposed by the special master for executive compensation that mean many of these bailout business leaders are hardly hurting. Nonetheless, people at the pinnacle of their executive careers are often somewhat siloed in their own industry niche and have to consider many factors beyond compensation when they are eyeing current competitors as future employers. For people at any level in any organization, location, culture, autonomy, ability to innovate, empathy, excellent support and many other factors are vital to job satisfaction and career success. Of course the money is important too—NACD’s CEO Ken Daly should not take this posting too, too seriously as year-end and bonus time approaches…