Last week, the paycheques of Canada’s banking CEO’s made headlines because they *gasp* didn’t get raises. What will Ed Clark and Rick Waugh do without that six figure boost to their multi-million dollar comp packages? Maybe the frontline staff at the banks can pass around a hat to help make up the shortfall. We wouldn’t want anyone stuck with driving last years’ Mercedes model. The headline got me wondering how anyone can justify in their own minds their need to earn over 300x more than the average front line worker.
There are lots of theories as to why CEO pay has increased six fold over the last 20 years but here’s mine: since magazines started publishing the salaries of CEO’s, executive comp packages have skyrocketed. The likely cause is a little thing called “comparison other”. It happens to everyone. You’re happy with your pay until you find out the guy in the next office is making $500 more a month than you. After all you’ve been there longer; got a better degree; or, just feel that you work harder. All of a sudden that pay difference becomes a sticking point.
Somewhere along the way, compensation packs for execs started spiraling up and nobody seems to be calling bullsh*t on the problem. Instead, people (namely Boards of Directors and the execs themselves) seem to go out of their way to justify the increasing pay gaps. And, we just seem to keep getting ourselves deeper into it. Since the late 80’s recession when the “do more with less” mantra started getting chanted, the workforce has tightened while executive comp has expanded. Once the economy bounced back, the only thing that got bigger were executive wallets. Front line and middle management workers continued to play double duty and “work smarter, not harder” became the corporate line for reasons why headcount couldn’t be added.
Today, more and more people are working huge hours for measly cost of living increases while CEO’s rake in huge dollars. All this work is leading to an increase in stress and a decrease in quality of life for the average worker.
The frightening part about all this is that I’m not sure there’s a way out of this hole. Can next generation executives “man and woman-up” and push back on egregious compensation packages? Can we insert some “me to we” thinking into corporate Canada?
It’s probably a pipe dream, given that power certainly corrupts, but wouldn’t it be great if our generation could start to shift the balance back to something that’s a little more reasonable? Executive leaders like bank CEO’s certainly deserve to be paid fairly for the work they do, but do they need to make the equivalent of 300 front-line workers salaries? Probably not.
When you’re given the opportunity to step into a significant leadership role, what will you do? Take the money and run or accept a compensation level that’s balanced and fair given the efforts of the people who work with you? The choice will be yours alone to make.
Happy leading!
