Monday, April 16, 2007

The State of Executive Pay & Bribing Children

The news reported on more parents resorting to bribing their children to behave appropriately or perform expected tasks, things their parent's just expected. Kids today are given goodies to not act up in restaurants, brush their teeth, get good grades, and sleep in their own bed through the night.

In the business world governing boards call it "pay for performance". In both cases it requires big and bigger bribes over time to induce the desired behavior. One mom noted her child frequently asks "what are you going to give me?"

Some experts shared their concern about rewards being excessive in light of the behavior. One father promised a child a Nintendo Wii game system for scoring a couple of goals in a soccer game. The business counterpart can be seen by perusing the latest Sallie Mae SEC filing.

CEO Thomas Fitzpatrick made $16.6 million in 2006, nearly $14 million in stock and option awards, not altogether different than the Wii video game. What happened to giving kids a fair allowance and then trying to get them to forget about money as they fulfill their individual and family responsibilities? Likewise, what happened to paying employees fairly, giving the a good job to do and the resources to succeed?

Instead the board suite is poisoned by the same disease as many of today's parents. The CEO is but another employee, one with an important leadership job. Is their task no better than potty training that they need to be bribed to perform?

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