GM’s Lutz: ‘I gave at the office.’


GM's Lutz: Don't cut exec pay-He shoots down Kerkorian's idea to reduce salaries, says ‘I gave at the office.'

A follow up to yesterday's article (see below):

Bob Lutz responds:

“Here's where people get this wrong: They say, ‘Why are executives paid so much? You have to ask: Why are professional athletes paid so much?' 

Professional athletes are also held to a pay-for-performance standard that we rarely see in the business world, though. If a running back in the NFL has a bad year or an injury, they get cut and lose their pay. In industry, if you fail, you either keep your job (thanks to the excuse-making) or get a golden parachute.

I really like Bob Lutz, but I think he's off base here. The old “executives will leave if you cut their pay” argument is trotted out. Where are they going to go, Toyota??

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Mark Graban is an internationally-recognized consultant, author, and professional speaker who has worked in healthcare, manufacturing, and startups. His latest book is Measures of Success: React Less, Lead Better, Improve More. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. He also published the anthology Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also a Senior Advisor to the technology company KaiNexus.

  1. Jim says

    Here is a thought: Perhaps the current executives leaving is precisely what GM needs.

    If a professional sports team loses consistently, you can try to blame it on the players but eventually it is the coach who gets fired to get things turned around.


  2. Bill Waddell says


    I read the same article and nearly choked when I read Lutz’ statement, “The capability of successfully trying to turn around an unsuccessful automobile company is a very rare and highly sought after skill set.” While that may be true, Lutz’ career thus far has been leadership of companies that are in dire straits.

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