(This article was written by Rick Dacri and was originally published in the York County Coast Star on June 26, 2014)
CEO pay is out of control…isn’t it? The Wall Street Journal published their 2013 Annual CEO Compensation Survey of the 300 largest U.S. publically traded companies and found that CEO pay rose “moderately.” That sounds good. CEO pay increased by only 5.5%, while ordinary employees’ pay rose 1.3%, according to the U.S. Department of Labor. Regular folks pay was less than “moderate,” I guess.
So how much do CEO’s make? The big money maker was Oracle’s CEO Larry Ellison who earned $76.9 million, followed by Leslie Moonves of CBS at $65.4 million. The Journal noted that several CEOs, whose companies were not listed because they were not big enough to make the list, earned much more. Cheniere Energy CEO Charif Souki was paid $141.6 million on sales of $267 million. In other words, he was paid more than half of what the company brought in. That doesn’t seem fair.
What about here in Maine? As you might expect, CEO pay lags behind the rest of the nation. But please, don’t feel bad. The top pay went to WEX CEO who earned a little over $4.7 million followed by Idexx Lab’s CEO at nearly $4 million.
When you figure that the median pay for a full-time worker earned in the first quarter of 2014 was $796 a week or $41,392, you can understand why some might find these CEO’s salaries a tad high. The Journal noted that the pay of these executives didn’t necessarily correlate to the results of their company. In other words, performance wasn’t a factor in their pay. As one anonymous online commentator noted, “It is impossible in this current economic climate to achieve results that could remotely justify these salaries.”
So what’s reasonable? Continue reading
This article, written by Rick Dacri, was originally published in the York County Coast Star)
There is nothing more energizing to a company than growth. Increased sales, positive cash flow, an expanding customer base, outpacing your completion. It is very exhilarating for executives and employees.
But with this excitement comes challenges. Growing from a small company to a large one requires outstanding talent. Talent that can adapt, change, thrive and deliver. Growth brings newness, unpredictability, ambiguity, and often stress. Having equipment, capacity, sales and cash will only prove helpful if a strong team is ready and able to step up. In sports it is called bench strength.
Red Sox manager John Farrell enjoyed the upper hand over the St. Louis Cardinals in last year’s World Series. Farrell had one of baseball’s most productive benches. Being able to look down the bench, seeing the right player to send out on the field at a critical time in the game proved to be a significant advantage, propelling the Sox to the championship.
I recently spoke to a business owner who was looking at doubling his business in the next two to three years, expanding his facility, and opening his business to some new, promising markets. Yet, his excitement was tempered by the sober reality that his bench strength was weak—strong enough for today, but lacking in capability for what loomed ahead.
So what steps should an organization take to build bench strength?
- Know What You’ve Got: Evaluate your current staff. Their ability and willingness to change, adapt, and learn are essential traits. Ongoing assessment of your employees will allow you to know your current capacity and determine what your future needs will be. At the same time, through training and coaching, you can begin to raise skill and performance levels. All high performers should have a development plan in place to ensure future readiness. While growing your staff is a critical first step, sometimes individuals who performed in the past will be unable to help you in the future. Bench strength means having high potentials that are ready to step into new roles. Difficult decisions must be made. Continue reading