It’s amazing to me, but looking back over more than a decade of writing I find posts that still impress, with information that is as useful now as when it was written.
Golden Oldies is a collection of what I consider some of the best posts during that time.
Greetings and welcome to 2017. I thought we’d start the year out with a bit of critical hiring wisdom, especially since hiring so-called stars is still high on most founders’ agendas.
The problem is that hiring often reverses the old adage, ‘one man’s junk is another man’s treasure’ and the promised star is, in the new environment, a dud. (Note: the compensation described is from 2007.)
Read other Golden Oldies here.
My entire career, even when I was a headhunter, I’ve condemned guaranteed pay packages and sign on bonuses, whether stock or cash, because of a passionate belief that people who join just for money/stock have no loyalty and will leave for more money/stock and that what a person did for their previous employer is not a guarantee of what they will do for their next one.
Obviously, my efforts have had no impact whatsoever, outside of my own clients, especially in the executive suite.
The practice is now so common that it’s been named the “golden hello,” a sure sign of broad acceptance.
Such packages are based totally on candidates’ historical actions for another company, frequently in a different business, their interviewing/negotiating skill, charm, and the threat that doing so is the only way to acquire their talent.
Just how much is all this worth? Penny gave its new COO “…a base salary of $750,000, to be reviewed annually starting in 2007, with a cash bonus that could be as much as 150 percent of her salary…stock option awards and restricted stock awards valued at more than $20 million in recognition of forfeited benefits at her former employer, Capital One, as well as a minimum cash bonus for 2006 of $1 million.”
She was fired six months later, because “…Ms. West not being a good fit for the company,” according to Deborah Weinswig, a Citigroup analyst.
Further, “…Ms. West had a severance agreement and that the retailer intended to honor its terms.” and you can bet that her golden goodby will contain a goodly portion of her golden hello.
I understand executive paranoia and the desire not to lose what they already have, but change always involves risk.
Penny isn’t talking, but if the analyst is correct about the fit, why was Ms. West hired in the first place?
Who wrote the job description? Who interviewed her? Who checked her references? Who thought she was such a good fit that it was worth doing anything necessary to land her?
“Who,” of course, is plural, nobody, especially at senior levels, is interviewed by just one person any more.
That’s why I keep telling my clients that, as their companies grow, they must make hiring, including skilled interviewing, a core competency at all levels.