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?'â€‚
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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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.
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.