Monday, January 19, 2009

Executives: A Meditation

A commenter below and Ms. Nikki Finke snark on Robert Iger:

It's just out in the Walt Disney Co's 2008 proxy statement. The CEO who signed a new five-year contract last February received $13.95 million in salary and bonus. Actually the figure is $30.6 million with all the bells and whistles, up 11% from 2007. And what’s up with that $645,368 for security? ...

Actually, I don't begrudge Mr. Iger his millions. Disney's stock has dropped 14%, but that is way less than the other entertainment congloms. And remember. Robert Iger had to endure for years as Michael Eisner's #2, which was anything but an easy assignment.

But while we're on the subject of executives, they're kind of a breed apart from regular working stiffs, and not just because of their salaries. Here's what a long-time entertainment exec told me last month:

If you're smart, you learn to delegate. And if you're very smart, you learn to delegate to very competent people who do the job well and make you look good. And when you've done enough delegating and do it right, you've got some serious free time on your hands ...

In the years I've been kicking around, I've noticed a few artists who have gone the executive route. When I first became a business rep, there was Michael Webster, a one-time assistant animator who became the head of Disney Television Animation in its early years. I never asked Mike about his move into the executive ranks, but a friend of his said:

Michael worked on the lightboard for years, but he figured out that it was a better gig for him to be an executive. More money and more longevity.

If you don't believe the longevity part, consider that Mr. Webster's major domo Tom Ruzicka is still working as an exec at Universal Cartoon Studios, twenty years further on.

But you want to know how smart executives operate, you need look no further than a small tome entitled Executricks. In a few hundred pithy pages author and corporate exec Stanley Bing gives you his take on the executive life, also his strategies for living that life in the most efficient and relaxing way possible:

Ronald Reagan was widely derided ... as President for sleeping during meetings and alowing his wife to act as ... chief executive.

... Today a huge number of Americans cite Reagan as one of the great Presidents in American history, with nary a word that the man snoozed through a fair amount of his second term.

CORE EXECUTRICKS

Delegation:

1) Receive work.

2) Designate recipient.

3) Assign work.

4) Monitor as necessary.

5) Receive work.

6) Evaluate and redelegate.

7) Receive revised work.

8) Accept work with thanks.

9) Pass along work to original source; accept credit.

10) Continue policy of inattention.

The above sounds about right to me, both from direct observation and conversations with various corporate managers over the decades. Four years ago, a Disney staffer said about Michael Eisner: "He's a micro-manager who pays no attention." In a weird way, that also sounded about right.

And three years ago, I had a very cynical corporate lawyer tell me: "The company stock has taken a beating the last year and a half and the CEO just went to the board to get an eight and a half million dollar bonus because he 'needed it.' So of course the directors gave it to him. The guy put all of them in their jobs."

But if entertainment execs are overpaid, they are pikers compared to the potentates in the Financial Sector of our fine economy.

Consider Ken Lewis, the genius head of Bank of America. Old Ken has managed to make one brilliant decision after another over the past six to twelve months, all with sparkling results.

[Ken Lewis's] disastrous acquisition decisions--first on Countrywide and now on Merrill Lynch--have brought Bank of America to the brink of collapse. He has destroyed the firm's shareholders, and, once again, forced U.S. taxpayers to bail him and his demolished firm out.

So let's not rag on studio CEOs too much. Because whatever you think of Bob Iger ... or Sumner Redstone ... or Rupert Murdoch, remember this: They haven't driven their companies to bankruptcy while getting billions upon billions of taxpayer dollars.

Face it. That's got to be the best Executrick of all.

40 comments:

Anonymous said...

The caricatures painted above are as helpful as management's caricatures that are just as often painted of talent. The above post is divisive and useless hyperbole that plays only to the most ignorant of TAG's ranks. Working within a successful team is one of the most rewarding experiences a person can have in life.

Yes, there does have to have to be a coach. Sorry, children.

r said...

can somebody spell "arrogant prick"?

Steve Hulett said...

Only somewhat hyperbolic, anon.

Executive comp. is what it is. And a lot of middle managers work hard for the money, and we live in a corporatist state.

But you miss the major thrust of the piece. Kindly explain to me how a lot of bad decisions by Ken Lewis at Bank of America is deserving of billions in Federal funds?

Once upon a time, a lot of bad decisions led to bankruptcy and/or unemployment. Now it appears to lead to "oh well" and a lot of money.

rufus said...

More like a "corporatist tyranny" as described by Noam Chomsky!

rufus

robiscus said...

The ongoing trend of corporate CEO's windfall returns is absolutely appalling. What we see time and again is company heads being rewarded huge sums because they can,not because they deserve it. It is atrocious and wrong.

(...and I'm one of the few people in here with conservative views...)

Anonymous said...

Don't forget that idiot reagun financed torture in Central America, sold poisoned chemicals and arms to terrorists, LIED about it, pushed mentally ill people out into the streets, and used a Ouja board to plan his day. He also liked to falsely take the credit for ending the cold war--yet another lie.

2 things to be thankful for, both he and bush are now gone.

Anonymous said...

What's the difference between Bob Iger and Winnie the Pooh? One's got his hand in the honey jar; the other's a talking bear.

Anonymous said...

Bob Iger is a verbose hairy gay guy?

Anonymous said...

I was not referring to exec. compensation for services rendered. That very large shortcoming lands squarely on the shoulders of boards, shareholders, and lax government policy. And ultimately you and me. I apologize for the confusion.

But I was most definitely referring to the self-admitted snarky attitude toward management - the statement that they are somehow a 'breed apart.' They are you and me.

Defining 'them' as somehow separate than 'you' does not absolve 'us' from the reality of how people organize to accomplish common goals. Sorry, but that's just life. While defining management as 'them' may push forward a political argument, it does not ultimately make us more self aware of what is truly required to create results in the workplace.

Steve Hulett said...

I was not referring to exec. compensation for services rendered. That very large shortcoming lands squarely on the shoulders of boards, shareholders, and lax government policy. And ultimately you and me.

Exactly. Which perhaps explains why there has been a change in management in Washington, D.C.

Team Player said...

To the first poster:

Yes, every team has to have a coach, but there are coaches and there are coaches. Don't tell me there is no difference between a "coach" like Walt and a "coach" like Michael.

In sports, when a team with good players starts to lose consistently, they fire the coach. In corporate America, they fire the players and give the coach a raise.

Steve Hulett said...

While defining management as 'them' may push forward a political argument ...

Which is part of what a labor blog run by a labor person might do, wouldn't you say?

I mean, among other things. But good of you to notice.

Anonymous said...

While I agree that CEO's are very important, and definitely worth a ton of money, it seems to me that some sort of line has to be drawn when an individual makes more money than they can *actually* spend.

But then again, Im just an animator, and easily replaceable.

Anonymous said...

I like that we have our own mouth foaming moonbat ranting on in post #6. 5 to 1 odds say his next post is about a 9/11 conspiracy...

Anonymous said...

That is funny, and I totally agree. That dude in post #6 is an obvious loon! Can't even spell Reagan right. As Bugs would say....WHAT A MAROON.

Hats off for breaking the soviet union.

There You Go Again said...

Oh, did we all forget that Reagan was God? Help me remember, oh keeper of the Kool-Ade, when did he walk on water, the first term or the second when he was going senile before our eyes? He might have been the most popular Republican president in the history of the United States, (for some reason), but his presidency was a disaster in so many ways. The only disaster to surpass it was W's stubborn eight year attempt to emulate him.

When it comes to Reagan, I'm with Moonbat.

Anonymous said...

How about a president who started his career in the living room of a home-grown terrorist and his copkiller wife? Who took his kids to hear an insane preacher who claimed the gov't created HIV to kill black people and that the U.S. deserved 9/11? And whose hand-picked staff became embroiled in various scandals before he was even sworn into office? God, if that's a sample of what's to come for the Obama presidency, Bush needn't worry about his legacy. Obama will make him look good if only by comparison.


As for Reagan, he was a tonic at a time when the country badly needed one, after Carter and his family of Washington Hillbillies disgraced the White House and bungled the Iranian hostage crisis so badly that now we have to face a nuclear Iran. And Bush kept us safe for 8 years after Clinton let the planner of 9/11 go THREE TIMES and oh yeah, WAS IMPEACHED.

You Bama lovers enjoy your lavish, expensive, taxpayer-funded coronation par-tay. But mark my words, there's a HELL of a hangover to come.

Anonymous said...

THIS is why we must never discuss religion or politics in the workplace.

Good grief!

Don said...

Hey Sore Loserman, I'm laughing at your wailing and gnashing of teeth. I know how hard it must be to see a true, inspiring, transformative leader arise from the party of good.

Sadly, your failed, filthy ideology has produced only an illiterate imbecile of a president who has demonstrably harmed our nation, committed high treason, made us weak, and ruined us financially, morally, ethically, and militarily.

Go ahead and wail, while I laugh with glee. Obama is most assuredly destined to become among America's greatest presidents. While he will become the Martin Luthor King of presidents, your party can't seem to muster anyone worthy. Reagan was an alzheimers-addled snoozer who negotiated with terrorists and gave arms and money to the Iranians--and because of that, we now have to deal with a nuclear Iran. Who else you got? Crooked Nixon? Bumbling Ford? "No New Taxes" Bush Sr.?

America's economy virtually always does better under liberal presidents, and societal progress has always come about through the efforts of liberals. I will enjoy your gnashing of teeth for the next eight long, wonderful, joyful, happy, prosperous, momentous, history-making years.

Ha ha!

Anonymous said...

Walt did have a stronger connection to the art. But at the end of the day, was he any less of a bastard than Eisner? Well, that's just a matter of taste, I suppose. Do you prefer monarchy, oligarchy, or theocracy?

The church, the state, or the wealthy. Pick one of the above. We're currently swinging back toward the state. It'll only be a matter of time before we will all have to wrestle the wealth back away from them and into the next group of undeserving bastards. Don't everyone go running around letting your emotions yet again blind you from seeing the truths ahead. The attorneys are already crossing the t's and dotting the i's.

Walt Fan said...

"Connection?" He WAS the art. I don't care if he was a tyrant; at least he had his head in the craft. At least he didn't see his artists as a necessary evil, troublesome red ink, or an unfortunate stumbling block on the way to glorious profit margins. You'd better believe it makes a difference!

Anonymous said...

--He WAS the art. I don't care if he was a tyrant;

Interesting comment. I thought Steve stated this was a labor board. Walt's monarchy lead to this guild, yet Walt is still so loved.

The facts are always too messy for dogma. The contradictions within every single one of them are so easily found that it boggles the imagination that human beings are able to fly in any direction at all.

Anonymous said...

"Obama is most assuredly destined to become among America's greatest presidents."

Based on ... hope.

Prepare to be disappointed - or better yet, spare us your concentrated conjecture.

Anonymous said...

How about a president who started his career in the living room of a home-grown terrorist and his copkiller wife?

Shame on you.

Don said...

Prepare to be disappointed - or better yet, spare us your concentrated conjecture.

As disappointed as we all are in your own, most recent, failed president?

Unlikely. Obama, unlike W, is educated and intelligent. And that is based on ... evidence.

nobody said...

http://blogs.payscale.com/content/2008/07/ceo-salaries--1.html

For those bourne into wealth an privilege is certainly true that they want to keep the status quo, where the wealth is kept on the hands of the very few via this thing they call "Democracy", where we get to pull a lever every four years. Choosing from two parties that represent the interests of the elite.

However, it is an historical fact, that we do better under a president from the Democratic party.

R.

Anonymous said...

"How about a president who started his career in the living room of a home-grown terrorist and his copkiller wife?"

I should tell you to "keep it up," because this is the exact type of rhetoric that lost the argument for republicans in our last election cycle. I might say, 'by all means, keep this attitude. Choose the Sean Hannitys and the Sarah Palins as the voice of your party, and you will ensure a durable Democratic majority for a generation.'

But to you, AND to the person(s) who brought up Ronald Reagan above, I would say this: For too long Americans have been divided by those for whom division is in *their* best interest. Not *ours*. Let us continue to have disagreements, but let us not forget that our disagreements should be about policy and not political division as a substitute for tribalism.

As President Obama said this morning, it is now time to put away childish things.

People may continue to choose to bicker in this manner, but they will find themselves drifting away from relevancy in our national conversation.

This acid-tongued rhetoric has already shown itself to be irrelevant when seeking to win the presidency of the United States. I work for the day that it's shown to be fully irrelevant in the day-to-day struggle to solve the problems we all face.

Grow up, curb your divisive spirit and roll up your sleeves. There's hard work ahead that's been put off too long.

Anonymous said...

U.S. Stocks Slide in Dow Average’s Worst Inauguration Day Drop in Industrial History - Bloomberg.com

Here's to wishing Wall Street will find some Hope. OUCH!

robiscus said...

"Grow up, curb your divisive spirit and roll up your sleeves. There's hard work ahead that's been put off too long."


Put off by whom exactly?!?

You? You're all ready to be a better citizen of this nation now that your party is in office? How self serving. How sanctimonious.

Listen, spare yourself the effort because odds are you aren't cut out for the work. There are millions and millions of citizens who put back into the nation every day regardless of who is the president and they have been doing that for 8 years of Bush and the 8 years of Clinton before that. If you are just starting now, I'm betting you've spent your time complaining in the run up to announcing this lame promise of yours.

Do you only wear your Lakers shirt when they are winning as well?

What a laugh.

Walt Fan said...

To Anon 9:22,

I didn't mean to deify Disney. There are enough stories going around by artists with first hand experiences of working with him to illuminate the drawbacks of working for a driven uncompromising personality like his.

I was speaking in relative terms; given a choice between working for an artist whose main concern is the quality of the creative product and gets off on pushing the envelope of the art form, and some Wharton School statistician who sees the creative staff as interchangeable field hands who were put on the earth to make him rich(er), I'll take the artist, thank you.

Anonymous said...

"Put off by whom exactly?!?"

Put off by politicians and an electorate who would rather argue about lapel pins and lipstick on pigs, and who dodged the draft or drunk drove back in college and who threw which medals where in the 1960's than actually fixing the problems we all face.

"You? You're all ready to be a better citizen of this nation now that your party is in office?"

I've been right here, hard at work. What's wonderful now is that those people -- who took up all our time and energy arguing that we're appeasers, that we're emboldening our enemies, that we're weak, that we don't love America just because we voiced a concern that maybe invading Iraq perhaps wasn't the very very best idea ever -- are becoming irrelevant.

Well, they'll only be irrelevant if we let them. And I'm willing to let them.

The rest of your post has nothing to do with me or what I said. If certain political voices lose the vitriol, they may find themselves listened to again.

I welcome that change.

rufus said...

Not sure how Reagan got into the conversation, but, people seem to forget, or, maybe never knew, that The United States was found guilty of using its power to violate Nicaraguas sovereignity. It was ordered by the World Court, no less, to pay reparations to Nicaragua, which have never been paid. The Monroe Doctrine has been evoked by many presidents to establish US hegemony on this hemisphere since 1836.

And you wonder why the world doesn't like the US?

rufus

Anonymous said...

http://en.wikipedia.org/wiki/Nicaragua_v._United_States

Anonymous said...

"And you wonder why the world doesn't like the US?"


Having been around the world and back for years of my life, I (unlike you) have first hand experience of the severe drop off in quality of life once you leave these shores. In knowing that the vast majority of the rest of the world is crap, I have ZERO in what they think of us.

It doesn't sway my core beliefs one iota. You, on the other hand, are investing in a severely disillusioned perception of the state of affairs in 'the rest of the world' that you hold up so highly.

Anonymous said...

"I (unlike you)have first hand experience, blah, blah, blah..."

How do you know for certain about where I've lived before? I'm impressed, you can read minds or something?, well, you're WRONG!

"You are investing in a severely blah, blah blah..."

LOL, what colour is the sky in your world?

Is Cuba's financial state a direct result of the Us's embargo? yes or no? I must be imagining that...

Did Reagan paint a picture of Nicaragua being a severe threat to the US or not? Nicaragua a threat!?!, are you out of your effin mind?

Father Romero's assasination, along with some nuns by american covert forces? did I imagine that?

I guess I imagined the thousands of people who died and dissapeared during the american suported Pinochet regime in Chile...

Books have been writen on these subjects, tons of them...I sugest you grab on of them, instead of listening to your Britney Spears cd for a change.

rufus

Anonymous said...

wow politics, religion and art. what a thread.

let me address the initial post from Steve.

A CEO's pay is approved by the board of directors. While most people would like to see CEO pay tied to a company's performance it seems its never that case. If the majority of shareholders truly do not like their board of directors and CEO then either vote them out or STFU. Most companies rely institutional investors like pension funds etc and not individuals. Its all about money. As long as there is return of investment thats all shareholders and fund managers care about. As long as they are making return of investment (ROI) they are not going to bite the hand that feeds them. You too feel the same as well admit it. As long as your Pension, 401k, ETF or Mutual Fund is making money so what.

Iger so far has done a better job than Eisner in his later years as CEO. I say so far cause who knows what will happen. It doesn't take much for anyone to do a better job than Eisner considering how bad he performed towards the end of his tenure. The early Eisner years with Jefferey and Frank were pretty good in my book. Disney had some of its best days then. Once Wells died and Jeff left to form DW everything went to shit.

Regarding Ken Lewis and BofA it doesn't matter who the CEO of BofA is or the CEO of any bank we must not allow ANY financial institution to fail period. This is not about rewarding executive decisions. This isn't about Wall Street vs. Main Street or a class struggle you are all missing the big picture. Its about our financial system folks. That is the glue that holds any society together. Without a well functioning financial system/economy society goes into the crapper.

In order to get the banks healthy again this new administration MUST fix the housing crisis one to reduce housing inventory and two purchase the toxic crap from the banks to get it off their balance sheets. Until banks get healthy we will not have a recovery period. Simply pumping capitol into them will not do it. All they will do and are doing is hording most of the money. Fix the mortgages of folks who are distressed and buy the toxic crap.

I like FDIC Chair Shelia Bair's plan to stem off foreclosures. This is what she is doing with IndyMac. The IndyMac plan is to reduce mortgage payments down to no more than 38% of gross income. To do that they are slashing interest rates, extending the length of a loan to 40 years and even deferring part of the loan balance until the rest of the loan is paid off or the home is sold.

Steve Hulett said...

Agree with much of what you say, but not the bank thing.

Krugman says this:

A better approach would be to do what the government did with zombie savings and loans at the end of the 1980s: it seized the defunct banks, cleaning out the shareholders. Then it transferred their bad assets to a special institution, the Resolution Trust Corporation; paid off enough of the banks’ debts to make them solvent; and sold the fixed-up banks to new owners.

The current buzz suggests, however, that policy makers aren’t willing to take either of these approaches. Instead, they’re reportedly gravitating toward a compromise approach: moving toxic waste from private banks’ balance sheets to a publicly owned “bad bank” or “aggregator bank” that would resemble the Resolution Trust Corporation, but without seizing the banks first.

Sheila Bair, the chairwoman of the Federal Deposit Insurance Corporation, recently tried to describe how this would work: “The aggregator bank would buy the assets at fair value.” But what does “fair value” mean?


Read the whole column, judge for yourself.

No question that we need a viable financial system. I just don't understand why it's the government's responsibility to bail out shareholders and CEOs without exacting a hell of a lot more than we've so far required.

Anonymous said...

Steve I was going to mention the bad bank/aggregator bank as a solution to the problem in addition to adjusting loans to fix and avoid more foreclosures.

The immediate virtue of the bad bank is that the remaining “good bank” would have a clean balance sheet, unburdened by the uncertainty of future losses from bad loans and securities.

The only reason why the Government is involved because they are the lender or money source of last resort. The government has one thing that no one else has which is the treasury aka the printing press to issue money.

Do not get lost in the minutia of the Government's involvement. Our financial system is an institution. An institution is bigger than any one individual or group of individuals. BofA, Citigroup, Lehman etc are institutions. BofA is much bigger than Ken Lewis or the shareholders. This is not about saving them its about saving the institution - the system. The Govt is saving a system/institution not individual companies. Because everything is intertwined you cannot have an institution fail without ripple effects.

This obviously is not true free market capitalism but our financial system is even bigger than any type of economic philosophy.

Steve Hulett said...

Right. Save the institution, here here.

So let's do it the way it was done the last time: aggregation, clean slate, new regs so these clowns don't drag us into a similar fustercluck decades from now.

To simply keep these institutions staggering along with huge infusions of money, without knowing how much toxic waste they're holding -- in other words, the way Paulson was doing it for months -- is counterproductive.

Just as it's counterproductive to use taxpayer money to make any old deal with banks when private parties (Warren Buffett comes to mind) are making far better deals.

Hank Paulson's lame excuse, "Well, we're just trying to hold things together, not get the best value" is infuriating to me.

Why the hell NOT get the best value?

I still think it would be simpler -- and ultimately less expensive -- to use the Bush I model that was used for S & Ls.

I doubt it will be done this way, but maybe I'll be surprised. A few years out, we're going to have other problems from merrily printing all this new money.

Anonymous said...

Right. Save the institution, here here.

Unfortunately although it sucks we do have to save the system. You have to separate the system from the company.

I would like to see regulations within our system that allows a company to grow only so big. There should never be a company that is too big to fail.


To simply keep these institutions staggering along with huge infusions of money, without knowing how much toxic waste they're holding -- in other words, the way Paulson was doing it for months -- is counterproductive.


Yes zombie banks do not work. This is why I am in favor of the "bad bank" approach to buy up the toxic paper so they can take it off their balance sheets. The biggest challenge is to determine what the value of these assets are to create a market place for them. There is a value just how much.


Hank Paulson's lame excuse, "Well, we're just trying to hold things together, not get the best value" is infuriating to me.


All of these plans need to consider we the taxpayers so we get some return on investment. Unfortunately we will get screwed since not everything that has been done or what will be done will be a benefit for the taxpayer.

A few years out, we're going to have other problems from merrily printing all this new money.

For sure we are going to have hyper-inflation.

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