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A new approach to hiring responsible CEOs

Bernie MadoffAll the economic gurus who were running our banking system based their assumptions on rational market behavior. Unfortunately, Greenspan’s vision of rational behavior and Madoff’s are pretty far apart.

This got me to thinking about irrational salaries in general (except mine, of course). Way back when NYU’s top basketball player Mal Graham was first round draft choice for the then undefeatable Celtics, his salary was under $40k. Perhaps that was too low, but it made more sense than the obscene salaries sports and entertainment people get today. Those were rational market behaviors.

So these bankers watch the big sports and entertainment earners and say, why not me? And the game now becomes how many gazillions am I making instead of how profitable my firm is. The old-fashioned idea that CEOs and top managers competed for the glory of success (corporate, that is) is gone. And this has bred an entirely new type of entrepreneur who will happily screw not only the general public, but their own company at the same time. All to make a few more millions.

To be sure, greed isn’t new, but if you think of the robber barons, they were looking to build a legacy as well as a fortune. Today’s Rockefellers and Carnegies only care about how much they can secret off to the Grand Caymens before the house of cards collapses. In Madoff’s case, he probably thought he’d be dead before everything collapsed – and that might have happened if Good Ol’ George hadn’t been elected.

So here’s my idea: let’s auction off public company CEO positions. Lowest bid wins – or maybe we can even find some people willing to pay for these jobs. While this may sound ridiculous, imagine how much better a Board of Directors could be at selecting their new CEO from a group of candidates who are qualified and want to put the company’s welfare before their own.

I’d do it, and I know many others who would as well. Give me a chance to run GM, and I’ll work without salary just for the glory of having turned around one of the world’s largest messes. Just think how many Harry Trumans are sitting out there unemployed and unrecognized today. (If anybody is listening, I don’t need any $1,200 waste baskets. Ikea is OK for me).

Oh yeah, if I’m not earning very much money, guess what I’m going to do with the salaries of my managers? To paraphrase Everett Dirksen, “a million here, a million there… pretty soon it adds up to real money.” This will immediately get rid of tons of Dilbert-managers, who can be replaced by people who want their jobs because they want the companies to succeed.

Join with me America! Let’s start a Bernie Madoff Pro-Massacre movement (apologies to Arlo Guthrie).

Just walk right into your local mega-corporation and say “Greedy bastards, we can get everything this country needs by replacing you with conscientious, socially responsible managers.”

You know, if one person, just one person does it they may think he’s really sick and they won’t listen.  And if two people, two people do it, in harmony, they may think they’re both flag-waving liberal socialists and they won’t listen to either of them. And if three people do it, three, can you imagine, three people walking in singin a bar of the “Madoff Pro-Massacre Anthem” and walking out. They may think it’s an organization.  And can you, can you imagine fifty people a day, I said fifty people a day walking in singin a bar of the “Madoff Pro-Massacre Anthem” and walking out? Friends, they may think it’s a movement.

Posted in Management thoughts.

5 Responses

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  1. douq millar says

    Spot On!

    Maybe if the current CEOs lose enough money that even the bailouts won’t cover, Boards will finally get it. The Board is typical only fund managers or the CEO’s buddies, also oriented to short-term. But the short-term right now looks pretty lousy so the Boards have nowhere to hide from the mess they created.

    Any new method of hiring CEOs is bound to work better than the current one.

  2. Carlo Cardilli says

    Reminds me of an interesting concept I heard recently: “reverse hive intelligence”
    which is how you can take a group of really smart individuals, like GM engineers, but come out with really crappy decisions, like the Pontiac Aztek.

    So the hive needs committed, thoughtful, passionate leaders to make it work.

    • walt says

      I’m thoughtful and passionate. Probably should be committed. So why don’t I get any offers? The Aztek always reminded me of the old maxim that a camel is a horse designed by a committee.

  3. Ross Smith says

    Did you see that Bank of America is taking your advice? Essentially they are “auctioning off” their CEO position. The trouble with your theory, Walt, is that the qualified people (the auctionees?) are withdrawing their services.
    “Bank of America’s six-member CEO search committee has blown several self-imposed deadlines while struggling to attract outside candidates”