Guillermo Nielsen, former Argentinian finance minister: “Most of the IMF officials we had to deal with in those early days found it difficult to distinguish between running an Excel spreadsheet and running a country.” (via Felix Salmon)
The New York Times reports that Citigroup not only paid its chairman, Sandy Weill, $21.5 million last year, it also paid the taxes for his many benefits.
In addition to his huge salary (par for the course at the top of major US financial institutions), Weill has personal wealth in the billions. Why on earth does he need Citigroup to pay for anything? Two explanations come to mind: blind greed or the kind of moral blindness that afflicts emperors surrounded by fawning courtiers. Or maybe a combination of the two. The same outrageousness appeared when the details of Jack Welch’s retirement benefits from GE were revealed a few years ago. He made a fortune, so why did he need GE to continue keeping him in the style to which he was accustomed?
During my many years in Britain, I felt the media and public obsession with so-called fat cats (corporate leaders, often of privatized utilities who were paid lots of money) was unhealthy. But equally matters have gotten completely out of hand in the US, with the vast sums paid to top executives (far more than any British fat cats) taking a big chunk out of corporate earnings and generally having little to do with performance.
When there were still people at the World Economic Forum who solicited my advice, I remember suggesting that a session on executive pay be renamed “How much is enough?” The issue is far beyond how much is too much: of course current pay is vastly too much. There comes a point when enough is enough.
The argument that you need to pay the best people the market rate has always struck me as absurd. My observation of many, many CEOs over the years suggests that most are far more interested in the power and challenge of the job, rather than the pay. It could well be a workable solution — if there were brave companies — to pay senior executives healthy sums, but cap CEO pay at something liveable at the top end, say $1 million. I don’t believe there are more than a handful of major CEOs who would forgo power for money. Many of them would do the job for $1, like Steve Jobs at Apple.
By the way, I don’t in any way begrudge the fantastic sums made by some successful entrepreneurs (the source of Weill’s own fortune). They took risks and reaped rewards. More power to them. It’s the salaries and benefits of today’s executive class that is totally out of whack.
I distinctly remember the thrill in the pre-Amazon.com days of going into a good bookstore when traveling outside my home country. Coming from London to a great book town like Berkeley gave me the chance to hoover up all the juicy American books that had not yet been published in Britain.
Amazon changed all that, if you overlooked the shipping fees. Suddenly I could read about something recondite but desireable in the New York Review of Books and immediately satisfy my craving.
Still, one of the goals of my trip to London last week was to snap up two British books that have not yet been published in the US. It would be wrong to say that I couldn’t wait to get my hands on these books (if that were the case, I would have turned to Amazon.co.uk), but I was champing at the bit, and early reading suggests I was right to be so eager.
Tom Holland’s Persian Fire is subtitled “The First World Empire and the Battle for the West”. I devoured Holland’s Rubicon, about the Roman Republic, a couple of years ago. I’m only up to Darius, so haven’t reached the central story of the book, the war between the Persians and Greeks, but it’s a great read so far, and a salutary tonic to a Greek-oriented perspective like mine.
The fact that I waited until my trip to obtain Christopher Logue’s Cold Calls must show that I’ve become patient in my old age. Logue’s modern rendering of Homer’s Iliad is one of the great achievements of contemporary poetry to my mind. When I read the first few volumes of his War Music in the mid-90s (thanks to a classicist friend‘s recommendation) I was absolutely floored. “How does Logue compare to the original?” I asked. “It’s pretty good, but still nowhere close,” he replied. That’s what convinced me to study ancient Greek at the University of London: how could I survive without being able to pick my way through the original in some way, if Logue was “nowhere close”?
One of the downsides of living in the US is the lack of unpasteurized cheeses. I don’t think there is an epidemic of disease in Europe because of Camembert, but the US has put up the barriers to such “health risks” (though I can recall reading about a hearty band of New York foodies that smuggle in unpasteurized cheeses with some regularity).
But tonight after dinner my wonderful hosts brought out a cheeseboard. Nothing dramatic, but even the supermarket-bought Camembert de Normandie was utterly delicious. That’s something I really miss.
I’ve spent most of the past 28 years in London, but my visit there this week promises to be a bit strange.
It’s the first time my family has returned since we moved to Berkeley in July. We’ll have an opportunity to see family and friends, and catch up on developments in our old neighborhood (perhaps that should be neighbourhood).
But we’ll definitely be visitors, the first time that is true for me in nearly three decades. Maybe everything will be crystalline and familiar, but I suspect it will seem just that bit opaque. I write that because I believe in the last seven months we’ve become just a little bit Californian, and a little less Londoner. I’ll see.
At a guess, posting to Davos Newbies this week will be irregular at best.
In today’s Financial Times, Sun Microsystems CEO Scott McNealy raises the banner of the sharing, caring corporation (subscribers only).
Share: blend internal assets with those outside. That means sharing things you value, such as intellectual property, best practices, employee time and even your thoughts, with tools such as blogs, podcasts and wikis (communal web pages). In doing so you lower barriers to entry and encourage people to notice and take an interest in your business.
Build trust and foster communities: adopt a transparent and shared approach to business. New business opportunities will arise that you, the trusted player, will be in the best position to take advantage of.
Engage and collaborate: seize opportunities to listen to and interact with the communities you create. Solicit input and recommendations. Respond to requests. Close the gap among your critical audiences, influencers and decision-makers across your organisation and you will be rewarded.
Shifting your business to take advantage of the sharing strategy is not easy and will not happen overnight. That said, the communities you seek to develop will recognise your efforts and help you if you are straightforward with them. Instinctively, they will trust your intentions and respond, guiding your organisation through the process.
I like and approve his approach (and its emphasis on the importance of trust echoes my discussion with Edelman yesterday). What strikes me, however, is how different this Scott McNealy is from the Scott McNealy who so pugnaciously strode the Davos stage in the boom years of the late ’90s. It would have been hard to find a more aggressive, take-no-prisoners, caustic character (Steve Ballmer never came to Davos) than that old McNealy.
Corporate circumstances change, and certainly the global environment changes. It’s good to see that some top executives can change as well.
I went to a presentation today of Edelman PR’s annual Trust Barometer. It’s a helpful gauge of how corporations, NGOs and media are seen by opinion leaders in a number of countries.
Two things I thought particularly notable were that “a person like myself” is the most credible spokesperson in most countries. Rightly, Richard Edelman, the company’s CEO, thinks this means that employee blogs can be hugely influential and trusted.
The second conclusion I liked was his advice to CEOs: “Give up control of message in favor of credibility through dialogue.”
Appropriately, Edelman himself writes a particularly good, forthright CEO blog.
Adrian Murdoch: “The number of Teutonic weapons hordes are all too few.”
In my naivety, I looked to this morning’s New York Times to fill in the details of the Cheney hunting accident. More fool I.
In an article that concentrated as much on the jokes of television comics as the substance, Elisabeth Bumiller took expert hunting advice from the following: two people who were on the hunt with Cheney, and Cheney chum and former Wyoming senator Alan Simpson. Is it any surprise that they all blamed the victim, Harry Whittington, and not Cheney?
Other sources do much better. Knight Ridder’s account makes clear that it is a fundamental rule of hunting that the shooter is responsible for knowing what is in his line of fire. The San Francisco Chronicle interviews a disinterested expert, who confirms that basic rules of hunting safety were ignored.
Of course, I learned all this yesterday from blogs that covered the story far more thoroughly than any of today’s papers. Firedoglake was particularly stellar.
The one consolation is that the story that has real legs, the seeming cover-up of the accident, is being covered everywhere. Lots of history to show that the cover-up is more important than the initial story.
Henry Farrell: “Big data mining initiatives are the Star Wars program of the information age. A massive waste of money and time.”