Today the press is reporting on two cases which caught my eye: Enron's - Lay and Skilling's convictions - and Bob Nardelli's (Home Depot's CEO) pay as the shareholder meeting comes up. It strikes me that these represent atypical "success" stories. Atypical in the sense that they are (were?) so huge in "success" dimensions: financial ratios, scorecard measures, management treatises, publicity, media, etc., etc., becoming models for society to follow and for individuals to aspire to. Today, the press shows a different side of each case.
"Home Depot shareholders blast CEO over pay", article by PATTI BOND, The Atlanta Journal-Constitution
Published on: 05/25/06, depicts the issues around Nardelli's pay (...for performance), and the sentiments against it. "Wilmington, Del. — Home Depot's annual meeting Thursday was most notable for what it didn't include — and shareholders weren't happy about the format. The Atlanta Company's outside directors didn't attend. Board Chairman Bob Nardelli, also chief executive, was there but did not make a state-of-the-company speech. There was no question-and-answer session. ...Home Depot spokesman Jerry Shields said the rest of the board was in Atlanta conducting company business." The issue - or part of it - is that "Nardelli last year got about $29.7 million in salary, bonus and restricted stock awards, a 4.3 percent boost. During his whole tenure he's gotten packages worth $154.3 million — not counting the value of stock options.... Home Depot has come under increasing scrutiny and public comment for the rising pay packages it has given Nardelli despite the company's lackluster stock performance."
In an AJC article titled "Rein in the power of cheats", GERALD W. McENTEE, President of the American Federation of State, County and Municipal Employees, published on 05/25/06, brings out an interesting ratio: that comparing CEO's pay to that of average workers: "Chief executive officers are raking in 431 times more than rank-and-file workers, who earn an average of $27,485 as non-supervisory employees. The pay gap has exploded since 1980, when the ratio was 42-to-1." As regards retirement comparisons the article states: "He (Nardelli) also scored a retirement package that, if he retired today, would be worth $4.6 million a year for life. Home Depot employees have no defined-benefit pension. "
Summarizing the issue, the article brings out that "A survey by the consulting firm Watson Wyatt found that 90 percent of institutional investors think the current executive compensation system is out of whack. "
Separately, the AP story on Enron - "Lay, Skilling Convicted in Enron Collapse", by KRISTEN HAYS, AP Business Writer:
"HOUSTON — Former Enron Corp. chiefs Kenneth Lay and Jeffrey Skilling were convicted Thursday of conspiracy and securities and wire fraud in one of the biggest business scandals in U.S. history. The verdict put the blame for the 2001 demise of the high-profile energy trader, once the nation's seventh-largest company, squarely on its top two executives. It came in the sixth day of deliberations following a federal criminal trial that lasted nearly four months." In terms of consequences of the collapse, the article states: "Enron's collapse alone took with it more than $60 billion in market value, almost $2.1 billion in pension plans and 5,600 jobs."
Uuuuufffff! Heavy stuff!
So, what does this mean in terms of "Spirit in the Workplace"? Thinking in "system" terms, abstaining from value judgements, or judging the individuals, the persons in these cases, is there a connection, a relevance to the topic of "spirituality in the workplace", and if there is, what is it? Values? Personal, group consciousness? Drive for "results"? "Success". The thrill of "the edge"? What?
In a separate incident that may throw some light on the answers to the question, also reported today on the AJC, regarding Fannie Mae: "The conduct of Mr. Raines, CFO Timothy Howard and other members of the inner circle of senior executives at Fannie Mae was inconsistent with the values of responsibility, accountability and integrity," the Office of Federal Housing Enterprise Oversight said in a new report. Raines was bent on boosting earnings to satisfy Wall Street, and he instituted executive incentive programs to reward the results he sought. An "unethical corporate culture" developed "where Fannie Mae employees manipulated accounting and earnings to trigger bonuses for senior executives," the oversight agency said. Raines' bonuses were among those affected by fraudulent accounting." ("Fannie Mae execs, the heat is on", Published on: 05/25/06, David McNaughton for the Editorial Board)
So that, I gather, values and a corporate (and leadership) culture reflecting integrity, transparency, responsibility, and accountability are "in the mix" as part of the response to the question. The drive to satisfy Wall Street is involved someway, somehow; this element can cause the demise of an organization - and has - as we have seen. And how would we describe the issue around pay: i.e., the distribution of pay amongst the organization's members such that ratios like 431:1 become "suspect", or begin to raise questions, comments.
What is your view? How does this relate to your vision of "the Spirit in the Workplace"? Share your comments - let us know.
