More on CEO Pay
When even FORTUNE Magazine is writing about excessive CEO pay, you know you have a problem. Although I get the impression that the CEO's view it as more of a “public relations” problem to be solved more than a real economic, moral, or leadership issue. The ratio of CEO pay to “average worker” pay has doubled just in my working career, 12 years.
One Wall Street exec said:
“It's not an excuse to say, ‘Hey, the board gave it to me.' CEOs should be responsible too. That's leadership!”
A Warren Buffett associate added:
How bad are things? Here's one wise man's assessment: “About half of American industry has grossly unfair compensation systems where the top executives are paid too much,” says Charlie Munger, Warren Buffett's partner at Berkshire Hathaway.
I like the example set by the CEO of Best Buy:
It's time for more walk and less talk. As Charlie Munger puts it, “The CEO has an absolute duty to be an exemplar for the civilization.” Munger isn't the only leader with that old-fashioned view.
Because he also wanted to shake up the company's strategy, he decided to hand over his annual option grants to the frontline troops – which he's done for three years now and plans to continue doing until he steps down.