Tuesday, March 21, 2006

America's CEO

The CEO for a Fortune 500 company makes about $10 million on average. That's a lot of money. A recent news article discussed the pay package for The Bank of America CEO.

It reports that he received $22 million last year to run the company, which included $83,000 for personal use of the company jet. Personal use! When did the guy actually work in the home office? When did he get something done? Using my crude calculations, that's about 100 trips a year assuming that each fare was at least $750 (first class of course). Keep in mind that these are personal trips. Don't forget there's probably an equal amount of work-related trips.

Apparently, investors don't think he did much of anything last year either. The share price for the company remained stagnant from year end 2004 to 2005. In my opinion, a leader leads by example. What if this guy was paid based on his performance? Would he be traveling 100 times per year? Or, would he be working?

Corporate America would be wise to start utilizing more pay for performance programs for its executives. The article briefly states that more corporations are moving in that direction. The movement needs to speed up.

Pay for performance works. It works for the Fortune 500 CEO and for the TwoMaids housecleaner. Positive energies are created because the person has the ability to write their own paycheck. Low pay or benefits is the result of one person: that person is you.

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