CEO

Should Leaders Be Paid Based On Performance?

By Brandon W. Jones on May 22, 2012 0

During the last few months, there have been a number of articles in the news about leaders and their compensation. In March, I did a post about an article that showed statistics stating that CEO compensation increase for new CEOs had only increased by 1.5% in 2011 compared to 11% in 2010. This was significantly down from past years even though their performance had improved and the performance of the company had improved.

I did a post about Carmelo Anthony because he was paid a high salary to help the New York Knicks become a top team and win a championship. The organization has not been as successful as expected since he joined the team and they have paid him a very high salary for results.

Once again there was an article in the news about compensation and performance. The Wall Street Journal article CEOs That Delivered The Most And Least Bang For The Buck by Joann S. Lublin and Dana Mattioli stated, “A Wall Street Journal analysis of compensation data for 300 top U.S. companies assembled by Hay Group found that while pay generally tracked performance last year, some CEOs delivered far more bang for the buck when it came to shareholder returns.”

The article went on to explain that although the results discussed in the March article showed that in many cases the compensation during the last year was equilivalent to performance, there were also companies that didn’t follow suit with compensation based on performance. The article explained the stories of four CEOs that were significantly underpaid or overpaid. The graphic above shows some of the statistics related to the performance and compensation based on the CEO.

Dishonesty: The Fall Of A Leader

By Brandon W. Jones on May 15, 2012 4

A few weeks ago I wrote a post about the CEO of Yahoo, Scott Thompson. He was in the news because he had only been with Yahoo for a short time and already was making major layoffs. Well, once again he has gotten himself into the spotlight. This time it is for his dishonesty.

Mistakes

Over the last few months since Scott Thompson took over as CEO, Yahoo has continued to struggle. In a recent regulatory filing, it was encountered that Scott’s resume erroneously said he had earned a bachelor’s degree in computer science when in fact he only had a degree in accounting. [Read more…] about Dishonesty: The Fall Of A Leader

How To Make It Through The Hard Times By Having A Vision

By Brandon W. Jones on May 11, 2012 9

Hitachi, the Japanese electronics giant, has been around for 102 years. Recently they went through one of their worst periods in company history. During the four year period from 2006 to 2010, Hitachi went through a company depression where the total losses equaled $12.4 billion. The losses were the worst in company history. The following two years they posted record profits. In 2011 alone, they posted a net profit of $4.35 billion.

So why did they go from having record losses to record profits? What happened to make them profitable? In April 2010, Hiroaki Nakanishi took over as the president of Hitachi. When he took over, he had been in the company for many years which gave him a lot of experience, but he didn’t adopt the previous leadership culture that led to the problems. With all his experience, he hadn’t allowed himself to grow into the same mold as all the past executives. He had a completely different thought process than all the previous leaders. The article Hitachi President Prods Turnaround in the Wall Street Journal by Daisuke Wakabayashi states:

Hitachi under Mr. Nakanishi has broken away from a plodding, risk-averse style of management, spinning off at breakneck pace its consumer-related operations in mobile phones, computer parts and flat-panel TVs to concentrate on selling big-ticket—and more profitable—power plants, rail lines and water treatment facilities.

While other Japanese electronics firms continue to suffer from losses in consumer products and the punishing impact of the strong yen, Hitachi—Japan’s largest electronics manufacturer—has posted a second year of record profits

Was It A Good Leadership Decision For Yahoo’s New CEO To Have Layoffs?

By Brandon W. Jones on April 18, 2012 3

Scott Thompson, the new Yahoo CEO, held a conference call yesterday to report the first quarter earnings. He became the CEO in January, so it was his first time reviewing quarterly earnings with the shareholders. Since Scott Thompson took over, Yahoo’s stock value has lost 7% of its value. Yahoo, however, was struggling even before Scott became the CEO. Since he took over, Yahoo has not improved and continues to fall behind their competition. He is now being labeled as a struggling CEO.

Yahoo has many companies that are branches of their core business. Under Scott Thompson’s leadership, Yahoo will be shutting down or “transitioning” about 50 Web properties. In addition, Scott’s significant measures to reduce costs included his announcement earlier this month that Yahoo plans to layoff 2,000 employees. Yahoo also plans to have additional layoffs at some point in the near future. At the same time, when Scott Thompson became CEO, he was given the possibility of making $26 million this year if he performs well.

Maintain Employee Morale Through Consistency

By Brandon W. Jones on March 26, 2012 2

Have you seen companies that struggle where the CEO still gets a huge bonus? What does that do to employee morale? Is it fair for the leader to get a bonus when the company is struggling? Think about what you do as the leader and how that effects employee morale.

Do you take all the credit for the work of your employees? Do you give yourself the pay increase when your employees do all the work? When you determine how you compensate your employees and yourself, pay close attention to how your employees and outsiders will perceive your actions.

CEO’s During the Recession

There were a number of companies during the first few years of the recession where the CEO’s and other top management received huge bonuses while their employees suffered, and at times were even laid off. This treatment had a major negative impact on the employee morale at those companies. Employees felt their leaders didn’t care about them. They also felt the leader was in it to get as much money as possible without concern for their employees or the company.

Go Wide Or Go Deep

By Brandon W. Jones on March 8, 2012 1

In today’s economic climate there are leaders that have very job specific knowledge, while there are other leaders that have a good overview of the company/organization but are great leaders. Each of these types of leaders has their own areas of expertise. The question is, “Which is more important to have to be successful?”

Yesterday, the Wall Street Journal published an article about GE titled, The New GE Way: Go Deep, Not Wide by Kate Linebaugh. The article explained that new approach that GE is taking with their leadership.

Go Wide

In the past GE had all of their high ranking leaders were to go wide. They would go from one department/location in the company to another on a regular basis. The rotations occurred every few years.

This approach allowed GE to develop their leaders with a broad range of experience. They had experience in many areas of the company, but they didn’t have really specific knowledge in any particular department of the company. Each area of the company had their experts, but the leaders had general knowledge.

[Read more…] about Go Wide Or Go Deep

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