Can you say '...out of touch...'

 

 

In a recent interview, Mary Barra, CEO at GM, justified her almost $30 million in compensation for 2022 by claiming that almost 92% was a bonus based on company performance, aka, doing her job. By implication, her $2.4 million salary should be considered a retention bonus to stick around and make some real money! Her income was 362 times the median income for all GM employees. And she doesn’t understand why the UAW workers will not consider the ‘generous offer’ the company has made. Can you say ‘...out of touch...’ 

And it’s not as though Barra is out there alone. The CEO’s at Ford and Stellantis earned $21 million and $25 million respectively, 281 times and 365 times their median employee incomes. 

This is a uniquely North American situation. By comparison, look at the CEO compensation of their competitors. 

Toyota - $6.7 million 

Honda - $2.3 million 

Nissan - $4.5 million 

BMW - $5.6 million 

Porche - $7.9 million 

Mercedes - $7.5 million 

The corporate feeding trough in North America is stunningly out of touch with reality. Since the late 1970’s average CEO compensation has risen 1322%! This is unparalleled greed. 

It's not like all CEOs are geniuses. Both GM and Stellantis were effectively bankrupt in 2008 requiring massive government intervention to stay afloat.  

Most of these ‘leaders’ are anything but unicorns. Ask this question ‘...what would happen to Company X if the CEO was hit by a bus...’ If the answer is that the company would fail, then the CEO has failed to do one of their primary tasks in ensuring a chain of continuity. If the answer is that the company would carry on and replace the individual, then my point is proven. 

Executive compensation has become outrageous and inconsistent with the actual contributions made by the individual. When average employees ask for fairness in wage negotiations, we cannot take those demands out of context. Does Mary Barra really contribute as much as 362 employees? Expressed in another more tangible way ‘...is it right that Mary Barra makes more before lunch on the first workday of the year than the average employee makes in a year...’

 

There is more than enough blame to share for this inequity. Compliant compensation committees on Boards of Directors; executive search firms whose own fees are a function of the executive compensation; HR leaders who neglect to represent ALL employees. And finally place blame on the major investors who turn a blind eye to the whole mess if stock returns meet or exceed their expectations. 

Employment equity includes compensation equity. The disparities demonstrated in the executive ranks have reached absurd levels because there are far too many so-called leaders who are similarly out of touch.

 

We need a large dose of reality. I am pretty sure that Barra, and others like her, could learn to get by on $5-6 million a year...  

 

I acknowledge a recent BBC article for the salary information contained herein. 

As a leader, this makes all the difference.!

 

I have written frequently that in my economy, leadership is all about character. If you fail to have a moral, ethical and legal compass that aligns with truth and integrity, you can never expect to legitimately lead others. They will see right through the façade that you cannot be trusted, and they will never become fully engaged because the environment is too risky. 

That said, too many people with a worthy character come up short of the mark and lose their ‘audience’ because of one fault. These leaders forget, or worse yet, they ignore, the fundamental equation of effective leadership.  

This equation says that ‘...with authority comes responsibility...’ That part is easy to accept. But the equation concludes with the statement that ‘...with responsibility comes accountability...’ 

Among today’s leaders, in all aspects of society, leaders are all too willing to accept acclaim but not criticism. When things are going well, they are anxious to receive recognition. But when expectations are not met, it’s someone else’s fault. We see it in government, in places of worship, in business, in academia, in media and in sports. This reluctance to accept the negative consequences of one’s decisions, actions and behavior disqualifies the individual from the ranks of great leaders. 

The curious thing about these actions is this. When a leader steps forward to accept accountability, we are, more often than not, willing to extend a forgiving hand and offer second chances. We WANT leaders to lead, to succeed, and to live up to our expectations. We do not knowingly sign on to support failure! 

Humility is often a more enduring characteristic than we recognize. As you lead, remember that acknowledging your faults is just as important as promoting your strengths. 

It must start with you!

 

A sad reality exists in our society, and it is only worsening. And unless and until we each take some responsibility, we will have no one to blame for it but ourselves. 

I refer to the lack of dignity and grace with which we treat others who do not share our beliefs, our perspectives, our opinions or our values. It seems to me that we seek to focus on that which divides us rather than on that which unites us and in so doing we drive ourselves into smaller and smaller ideological camps which ultimately become dark holes from which we find no escape. We surround ourselves with like people who only reinforce our views to the exclusion of all contrary thought. 

Individualism can be a hallmark of a healthy society. But when we exercise that individualism in a manner which excludes consideration of other’s views, we no longer have a functional society. The fact of the matter is that society only truly functions well when we can compromise by considering others and finding common ground. The extremism that defines us now only serves to highlight that which separates us and that means that compromise becomes increasingly difficult and therefore nothing of substance gets done. 

As a leader, what can you do to bring dignity and grace to your workplace? Here are a few suggestions. 

1. Lead by example. Be seen and heard treating, addressing and interacting with all employees, at all times, in the manner in which you would expect to be treated. 

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2. Ensure that company policies are based on the broadest interpretation possible of legal, moral and ethical principles. 

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3. Insist that opinions are based on facts and not on feelings. 

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4. Require that differences are resolved by mutual respect of other’s position on matters but not in violation of accepted legal, moral and ethical standards. 

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5. Where and when possible, hire a diverse group of employees whose input naturally contributes to a wide range of attitudes, opinions and experiences. 

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This is not an exhaustive list...it is a start. Change in our society will not happen overnight. Just as it took decades to reach the stalemate that embraces us now, time is needed to redefine our conversations. But the workplace is a logical and convenient place to begin the transformation that we need. 

The workplace already has more of the cultural diversity that this matter requires, and it embraces more civility and grace because of the norms that define a functional environment. We need to take that civility we have developed in our interpersonal relationships at work and extend them to the general public with whom we interact daily. Our relationships at home are not an ideal model because they are based on a measure of love and forgiveness that is not workable in the broader world (though it’s a nice thought...) 

Your leadership is imperative if we are to regain our balance in society. Are you up to the challenge?