Today in the Wall Street Journal you’ll find an article about GM complaining to Mr. Kenneth Feinberg, Treasury Pay Czar, that their search for a CFO is in jeopardy because it can’t find a “qualified” CFO for a measly $1 million, plus stock options and full benefits.
Let’s think this through…
- The country has a problem with exorbitant executive pay. The rich get richer and the poor get poorer. I’ll spare you the details because we all know it is true.
- Management in the US Auto Industry took us down the primrose path over the past 30 years, albeit cluelessly. The crisis facing the auto industry could have been avoided.
- By promoting from within the ranks of “qualified” CFOs, companies like GM only sealed their fate. Does the term Groupthink come into play here?
- The “good ol’ boy network” needs to be broken. By hiring executives that are already being paid millions of dollars, the cycle of outrageous pay continues.
On the other hand….
- New blood would help reduce all the problems above.
- If GM put an add in the paper, or on the internet, advertising for a CFO that makes $1 million plus stock options, plus benefits, do you think they’ll have any takers? Of course they will. There are a hundreds of people who would apply. Now, GM’s argument would be that these candidates aren’t qualified. Hogwash. What did the auto industry CFOs of the past 30 years accomplish? Does helping to drive these companies into the ground come to mind.
There are lots of CFOs who are working or who have worked for publicly traded companies who would be up to the job. There are also people out there who have not been a CFO yet, but who could certainly do the job. I know this is a huge generalization, but if pressed to prove it, I would open this up for public dialogue. If a panel of people, let’s say a small group of successful business owners (businesses that have revenue of $50 million or more) were picked at random to find a successor, they would be able to find someone for the job. It might not be who GM would pick, but guess what GM, there ARE qualified people out there that could become your next CFO, you just don’t want to go look for them.
Take away for leaders. Leaders should not be self serving. I have no problem with people making a lot of money. In my view, $1 million is a lot of money. My concern is that too many leaders do things that benefit only the few. In this case, GM can find someone, they just aren’t willing to. As we all know, “change” is difficult.
Mr. Feinberg, if you are serious about changing corporate culture… don’t give in.
All the best!
All the time!