Rodent Regatta

Erin Malone has written a piece that might have just the words someone needs today. In the world of work we can so easily lose the joy of life. Erin offers a suggestion. [from Boxes and Arrows]

Statistics suggest that a CEO in the 80’s might have earned something like 17 times the average wage earner in his company. Today that number is north of 500 times the average wage earner’s income. Think about those numbers for a moment. In the 80’s a wage earner making $12,000 was governed by a CEO making $200,000 or so. Today, a wage earner making $20,000 is likely governed by someone making $10 million or more.

Sure, these are sweeping generalities for large public companies. Yet, these are the very companies where CEO compensation is so terribly out of step with real performance.

On page 16 of his annual letter to shareholders, Warren Buffett begins an excellent discussion of corporate governance. A few quotes are in order:

Accountability and stewardship withered in the last decade, becoming qualities deemed of little importance by those caught up in the Great Bubble. As stock prices went up, the behavioral norms of managers went down. By the late 90s, as a result, CEOs who traveled the high road did not encounter heavy traffic.

In theory, corporate boards should have prevented this deterioration of conduct.

These directors and the entire board have many perfunctory duties, but in actuality have only two important responsibilities: obtaining the best possible investment manager and negotiating with that manager for the lowest possible fee.

Directors should not serve on compensation committees unless they are themselves capable of negotiating on behalf of owners.

Theres nothing wrong with paying well for truly exceptional business performance. But, for anything short of that, its time for directors to shout Less!

Quotes from Warren Buffett
Annual Letter to Shareholders 2002
[Note: This is a pdf file.]

By now the message should be clear. We need a free market system that seeks the best talent for the job. Note that in Buffett’s remarks, he mentions serving on 19 public boards over a 40 year period, and that put him in contact with around 250 other directors. That’s not very many. When you draw from a sample that small, you risk missing a really valuable look at the rest of the population. Even with lots of country club memberships, that group of directors wasn’t likely to find the guy willing to do the job for half the present package!

There’s also a message here for job seekers, headhunters and career placement professionals. We’re entering an era of ”job placement by bid.” Given a group of otherwise-qualified individuals, what would each one bid to do a job? A crass way to ask the question is, ”For how much would you perform the job currently being done by the incumbent who is making $750,000 or $150,000 or $75,000?” You get the idea.

Moving to Seattle was a very real possibility back in January. I continue to look at my job and career options in the area.

craigslist is branching out with new city listings. Seattle has been on the list for a while, and there’s a recent uptick in the number of listings there.

For those who might have become disillusioned with a search, I encourage you to re-engage and think carefully about what you want to do.

Here’s an excerpt from last week’s newsletter from Dan Miller:

1. REMEMBER THE SABBATH?

In the ”busyness” of modern life, I fear we have lost the rhythm between activity and rest. ”I am so busy.” We say this as a badge of honor, as if our exhaustion were a trophy, and our ability to withstand 70 hour weeks a mark of real character. We convince ourselves that the busier we are, the more we are accomplishing and the more important we must be. But is this really so? Does more activity really mean more accomplishment? To be unavailable to friends and family, to miss the sunsets and the full moons, to blast through all our obligations without time for taking a deep breath – this has become the model of a successful life.

Unfortunately, because we do not rest, we lose our way. Instead of BECOMING more, we are just DOING more. We base our value on what we can do, rather than on who we are. Are you making time for the inhaling half of your life? Our technologies make us available 24/7 to the demands of our work – if we allow it.

Embrace Sabbath days and times in your life. Wisdom, peace, creativity and contentment will grow in those times. Take a walk, give thanks for simple things, bless your children, take a bath with music and candles, turn off the telephone, pager, TV and computer – carve out those times for restoration and spiritual breathing.

Today’s newsletter is a day late – Sunday night we had a violent storm here in Franklin, TN. Our power was out all day Monday. No Internet, no air conditioning, no TV or radio. So my wife Joanne, our son Jared and I spent the day cleaning up trees, talking to the neighbors and going out for lunch. An unexpected Sabbath.

I am fortunate to work in an environment where I see rabbits, guineas, woodpeckers, lightening, clouds, and neighbors. It’s difficult for me to find a refreshing pause in the midst of concrete, asphalt and honking horns. My work setting is the result of having a clear goal and a plan of action. I know what works for me. Have you been able to find the work that provides a balance of ”being” and ”doing?”

Depending upon how much Washington State had to give up and how much ”up front” money Alabama had to give up, this hire is beginning to look flawed from the initial phone call. This is the kind of guy they brought in to run a program already on probation? Strength…give me an ounce of strength!

We called American Airlines executive behavior ’chiseling’ last week. Yesterday, Donald J. Carty resigned from the company. He was CEO and chairman.

I see one thing wrong with this. There was a group of people negotiating directly with the unions who new of what the executives were trying to get away with. They should be gone, too!