It’s time for CEOs to “shape up” or give it up

What are you doing this summer ?

I’ll tell you what Roland Smith, ex-CEO of Office Depot is doing, According to the WSJ (“For CEOs, High Pay, Higher Anxiety”- Vanessa Fuhrmans, Joann S. Lublin), he is taking a 13,000 mile motorcycle trip with his son from Key West to Alaska and then to Jackson Hole.

CEOs pay is out of control. That’s nothing new to those that analyze their investments. CEOs of public firms make today some 300 X what an AFC (Average Frustrated Chump) , I mean average employee makes, up 10 times from the late 1970s and most of the 1980s. Does the average employee produce less now than they did 30 years ? Absolutely not. Do the CEOs produce more now than they did decades ago ? In fluff and fold, maybe.

The CEO is no longer the “protected class”. No longer serving the 20-year term. How many of us hold a job for 20 years anymore ?  GE CEO Jeff Immelt is leaving this summer after 16 years, not by happenstance, but because of sub-performing stock and a nudge from activist Trian Fund Management.

According to the WSJ:

“In June 2017 alone, the CEOs of GE, Uber, Buffalo Wild Wings, Perrigo, Pandora Media resigned or announced their departure.” Don’t be fooled by the word “resignation” which most press releases read, these folks are pushed out. Don’t be too concerned for them either, these people land on their feet better than cats do.

Activists investors are partly responsible for those replacements (https://sharkrepellent.net/). Partly responsible also are the ever increasing changing technologies and competitive challenges from upstarts (WSJ).

There is a law before legislators which calls for  mandatory disclosing the Pay ratio between the Big Wig pay and the Average Joe pay. I’m skeptical of it. Some people think adjusting for company size, “using actual realized rather than estimated target pay and factoring in the performance of previously awarded shares makes it better.” (WSJ, July 6, 2017)

One of the problems with CEO succession is the search process itself and the favoritism involved. Typically, boards solicit Executive Search firms so it appears to be an arms-length deal. Those Executive Search firms, and I know quite a few (would rather not name them) , drag their feet and rarely, if ever take a chance on a non-conventional individual.

What about the CEO life ? Well, this guy is a CEO and he has even made a video about it:

Note: To make a video like this in the US as a public figure, not such a good idea. Here you would have just signed your resignation letter and collected 1.6 million viewers enemies. However, entertainment is entertainment and actors are always in demand.

I have a question to ask you, whether you watch that video or not, do you have the tools to rise up the ranks ?

MY TWEET OF THE DAY (07/13/2017)

I already had 4000 of my readers emailed theirs. #techjobs #careers #whoshiring #SanFrancisco https://t.co/txJouolPbv #Thanks, @Benioff #win pic.twitter.com/bnhCDC7qGy

— Max Cantor (@FinancierGuru) July 14, 2017