I'm an Executive With An Annual Salary of $1. Who am I?

If you're Steve Jobs with Apple or one of the top 3 Executives at Google then this describes you.

I just ran across this great article on Portfolio and honestly thought that it was part of an April Fools' Day joke...but then I realized it wasn't April 1st.

The title of the article is The 1$ Executive Club and today was the first time I had ever heard of this.

Check out this quote from the article...

What is the hottest status symbol in executive compensation?

It's not the private jet or huge buckets of stock options and restricted stock, or lots of little things like season baseball tickets or free dry cleaning. (Although those are always welcome, thank you very much.)

No, it's the $1 salary.

The three at the top of Google, Larry Page, Sergey Brin, and C.E.O. Eric Schmidt have affirmed their cachet in corporate cool by taking salaries of only $1, according to the proxy statement the company filed on Tuesday evening.

So, what do you think? What's also interesting is that every year since this started in 2004 all 3 of the top Google Executives have been offered more market competitive salaries but have turned them down. Would you do this if you were in their shoes?

Don't feel too sorry for these Executives because I'm sure that their "other compensation" completely makes up for any amount of perceived loss of income. Remember that there is "other compensation" called stock options.

I also learned that Steve Jobs (Apple) is the most famous $1 annual salary recipient and he's been doing this since 1997. Bill Ford (Ford) has been doing this since 2005 and Richard Fairbank (Capital One) decided to try it for 2007.

Here's another quote from the article that sheds some light on some other advantages to Executives as well...

Taking no or little salary is often done for symbolic reasons: an executive trying to bolster employee morale at a company in need of an immediate turnaround. But there is a practical motive as well. Salary is taxed at rates as high as 35 percent, while capital gains from stock sales are taxed up to 15 percent. Cutting down the salary portion of an executive's compensation could help reduce the overall tax bill.

In reference to the first part of the above quote I couldn't agree more. If I was working for a large corporation that was going through some difficult financial times and our CEO, CFO, and COO decided to forgo an annual salary then I'd probably be impressed...but once I saw the obvious tax advantages I wouldn't be as impressed...

So, what's your take on this?

Everyone's Salary is Public...No Joke?!

So, what would you think if everyone in the company knew your salary and what everyone else made? Don't think this is misprint or an accident - just walk down the hall by the break room and you can find the list up on the bulletin board. If you aren't sure where the break room is just listen for all of the screaming and yelling.

Most of you would find this situation or scenario completely ridiculous and would say that this information is confidential and should stay that way.

Certain salaries or compensation packages are public knowledge and will probably always be. I "googled" college football coaches salary and it took me less than 1 second to find a handful of websites eager to give me this information. Here's one here. Or, take CEO compensation...that's easy to find - here's a list I found. These salaries are always discussed on the news and we expect to be able to get our hands on this information or at least to be able to find this information on-line within a couple of minutes.

So now...what about you? What if this was something your company decided to do? Or, what if you were interviewing at a company and heard that this was part of their "culture"? Would this make you think twice before accepting a job offer? Back when I worked at The Federal Reserve we posted our job titles and salary ranges on the bulletin board by the break room but this was obviously as transparent as we would ever go.

I ran across this article on Portfolio titled "When Salaries Aren't Secret" and it made me stop and think about this concept.

Check out this quote from the article...On the other hand, a radically open salary system could yield major benefits:

1. a fair compensation system based on actual performance
2. employee understanding of the business (e.g., why payroll is usually the largest cost; why certain employees earn more)
3. a culture of trust, as employees and senior managers share more information

So, what do you think? Agree or disagree?

In some companies (or occupations), I can definitely agree with these benefits and see how this would work. For example, in a company that was comprised with a lot of employees with variable compensation and where bonuses or additional compensation was based on sales or performance I could see how this would work. It could also motivate employees to work harder - especially the ones that are toward the bottom of the list. The more variable the compensation in your company the more of a chance that this will work.

Let me know your thoughts...

If you want to read about some ways to start experimenting with this concept go back to the article I mentioned at the top and scroll down to the bottom of the page...enjoy!

David Beckham = New Compensation Strategy

For those of you out there who aren't soccer fans, you may have overheard on the news (TV, radio, internet) that David Beckham is coming to the states to play soccer. If you you don't know who David Beckham is, he's married to Victoria "Posh Spice" Beckham. If this clue doesn't help just follow my links...

He'll be playing for the Los Angeles Galaxy and making about $250 million over the next 5 years - this will come from sponsors, merchandise sales, and a % of club profits. If you're a hardcore fan you can go to the Galaxy site and see a countdown to David Beckham's arrival in LA!

I just read this article in Time by Gary Andrew Poole titled, "The Beckham Circus Comes To Town" where he talks about the circus (Beckham family) that will be coming...

I immediately put my HR/Compensation hat on when I read in the article about the "Beckham Rule". This is otherwise known as the designated player rule (but named after David Beckham) and allows a team to sign one player that is not counted or considered in that teams salary cap for the year.

For you HR and Comp Pros out there can you imagine your company creating a compensation rule, strategy, or exception just for that "high performer" on the market? Before today, I had never even considered the idea.

It's quite an interesting strategy and only time will tell if it pays off for the Galaxy and other teams who have and will take advantage of it...

Enjoy!

When A Promotion Really Isn't A Promotion - "The Office"

Enjoy...

Napoleon Hill - What? He Got The Promotion?

Here's a Napoleon Hill "Thought For the Day" I received over the weekend that I just couldn't leave out.

DON’T COVET THE OTHER FELLOW’S JOB IF YOU ARE NOT PREPARED TO ACCEPT THE RESPONSIBILITY THAT GOES WITH IT.

How often do you look at those around you and say, "I could do any of their jobs better than they can if I only had the opportunity," never realizing the price they have paid and the knowledge they have accumulated to earn the right to hold that position? It’s easy to be a Monday-morning quarterback and second-guess the actions of others. But it’s far more productive to recognize the contributions of others and give them the credit for a job well done. If you aspire to a higher level of recognition, demonstrate to others-your peers as well as your superiors-that you can be counted upon. The world’s greatest rewards accrue to those who always deliver on their promises.

We all, at one time or another, have either asked the following questions ourselves or been asked these questions by an employee in our organization (assuming we're a member of the HR Team):

1. What? He got the promotion?
2. Why didn't I get that promotion?

There are typically many different types of employee that will ask these questions but for my purpose and example here, I'd like to focus on two.

1. I complain but I'd rather keep on complaining than really be the one that is promoted next. You mean there are really those people out there that just complain for the sake of complaining? So, they complain and really never want to progress in their career or even the next promotion that's handed out? Yep, there are people out there like that. We've all seen them and have unfortunately had to listen to them rant and rave about the co-worker that actually worked for and deserved the promotion. What more can you say about this person? I'll move on...

Here's a "Thought For The Day" I received today that sums up the above person pretty well.

LOAFING ON YOUR JOB HURTS YOUR EMPLOYER, BUT IT HURTS YOU MORE.

Some people expend far more energy getting out of work than they would spend doing the job well. They may think they are fooling the boss, but they are only fooling themselves. An employer may not know all the details of every job or every task an individual performs, but a good manager knows the results of effort. You can be sure that when promotions or plum assignments become available, they won’t be offered to loafers. If you do your job cheerfully and well, not only are you more likely to be recognized and rewarded, but you also learn how to do your job better. As you become more proficient, you become more valuable to your employer. You also acquire the most valuable of all assets-the confidence that comes from knowing you possess skills that will increase your value to any organization.

Don't you agree?

Here's the next type of employee I'd really like to focus on...

2. You may question the promotion but deep down you want it next time and will do what it takes to be the one that's promoted when given the opportunity. Maybe I am overly optimistic - or some may say naive. I truly believe that most of us are in this category. But, the time it takes us to get to this point is what will differentiate us the most. For some of you out there, the very next day you're ready - others may take weeks to get there.

Once you "get there" here are some things I'd recommend.

1. Look at yourself and evaluate where honestly think you are from a performance perspective. See my previous post on how to take advantage of the "white space".

2. Compare yourself to the objectives for the position (or the standards for which you'll be evaluated upon) and also think about where you fit it compared to other teammates that perform the same job or function as you.

3. Talk to your manager about the promotion (or the next step or level in your position) - and do your best to not sound bitter or resentful but ask about ways you can improve your performance.

4. Listen attentively and take good notes. Keep yourself and your manager accountable by following up and asking for feedback - but remember to do this in a fashion that your manager is comfortable with.

5. Follow up with action and results will follow...