At the Conscious Capitalism 2013 conference there was little discussion about compensation. There were a few specific examples – complete pay transparency and executive pay caps at Whole Foods Markets, for example – but no unified concept of how companies’ pay practices support, or don’t support, the principles of Conscious Capitalism. Over the past year I’ve worked to develop and … Read More
Below the Radar – How Conscious Compensation Looks in Real Life
Conscious Compensation® ideas appeal to many, offend others, and are scoffed at by some. The most difficult part of the conversation is the pragmatic aspect: Even if you agree with the principles put forth by the various organizations advocating the principles underlying Conscious Compensation®, the typical opposition is that it is idealistic and unworkable.In a global economy based on capitalism, and … Read More
What’s Wrong with the “S” in “Total Shareholder Return”
We are caught in a zeitgeist that promotes Total Shareholder Return – the increase in a company’s stock price plus dividend payments over a defined period of time – as the most important, and perhaps only important, measure of a company’s success. This, in turn, is applied by external observers of and advisers on assessments of executive compensation and corporate governance as the … Read More
Conscious Compensation®: Solution for Old Problems
With the new year upon us and “proxy season” on its way, we can expect to hear some familiar refrains about executive pay. Maybe something like this:”…corporate profits rose 108 percent, and CEO pay rose 481 percent, but the average worker’s pay rose just 28 percent (during the 8-year period), barely more than inflation…” “…pushing the average large company CEO … Read More
Conscious Compensation Parable From Auto Parts Manufacturing Companies
As a compensation consultant, I work with three auto parts manufacturing companies.The first, Company A, is a traditional company and has been in business for many years. They market to all of the auto manufacturers, plus aftermarket suppliers. Being a disciplined business, they seek the lowest prices for raw materials, labor, and capital that allows them to make parts within … Read More
The Myth of the Average Worker Pay Ratio
Are CEOs overpaid? Many people think so. If so, many potential causes have been identified: CEOs with too much power, inattentive boards of directors, conflicts of interest by compensation consultants, the use of stock options – the list goes on. Depending on the source, the average CEO in 2005 was paid $10 million to $15 million dollars. This calculation usually … Read More
