Sane Compensation

The response to those questions is, more often than not, that companies have to be “competitive” in order to attract and keep the best talent. I believe that’s true—but only to a point. During final negotiations of a compensation package for a prospective CEO position, do you really believe any candidate with a brain would turn down the job because it didn’t include lifetime health insurance coverage for him and his spouse? Of course not. Or is there any sane finalist for a job who would simply walk away because the company offered $13 million a year instead of $15 million? How about $11 million?

In large companies, the difference of a few million here or there may not be a big deal, and, of course, they want the new CEO to start off with a positive, energetic attitude, but c’mon, folks! Companies want and need the best possible talent, it’s true. But if they don’t get the person they want, there is someone else in this big, wide world who will do just as well, maybe a whole lot better, and who is available without an insane price tag. I believe it was Charles de Gaulle who said the cemetery is filled with indispensable men—and it’s true.

I am not a socialist. I believe the complexity and demands of business today warrant substantial compensation packages. All I’m saying is it’s gotten out of control, and both players and boards need to move the guidelines back to reality. And the sooner the better.