Have you noticed the efforts to diminish the compensation or banking honchos and Wall Street hotshots?

Or at least make it look that way.

Our friends at Goldman Sachs are in the forefront, which should give you lots of confidence that the effort is for real.

The bonuses are in restricted stock that has to be held at least five years, so if the stock value went down 20% the banker would receive only $8 million instead of the $10 expected—poor baby, a lousy $8 million dollars, that’s terrible! Of course, the stock goes up 20% they’ll pick up an extra two mil.

Goldman benefits because the shares don’t count as compensation until they vest, which means they don’t show as an expense and that will boost profits.

Another piece of sleight-of-hand is counting consultants and temporary workers as employees; this raises headcount and significantly lowers pay per employee making politicos and the media happy.

Does it make you happy?

Do they really think we are that stupid?

Are we?

Leadership Turn ends December 29. I hope you’ll stop over today to read Leadership Needed—By 2015. To be sure you continue to get your daily fix of Miki you should subscribe via RSS or EMAIL.

Your comments—priceless

Image credit: Robert Couse-Baker on flickr

Lies. These days it seems that everybody lies. Politicians, but that’s not new; corporate honchos, way more than previously; religious leaders, in the name of CYA; parents, for their kids own good; kids, because they’re kids; and on and one.

Richard Bach believes that the worst lies are the lies we tell ourselves, while Mark Twain believes there are three types of lies, there are lies, damned lies and statistics. I like that; I’ve always thought that statistics are like the Bible, you can spin them to support any view.

Adolf Hitler said, Make the lie big, make it simple, keep saying it, and eventually they will believe it. He understood what Eric Hoffer meant when he said, “Those in possession of absolute power can not only prophesy and make their prophecies come true, but they can also lie and make their lies come true,” and he almost did it.

Fox Mulder blithely says, “I would never lie. I willfully participate in a campaign of misinformation.” Wow, he could have a second career on Wall Street.

Lies are corrosive; they destroy the teller and damage the tellee.

I agree with Ann Landers, who said, “The naked truth is always better than the best dressed lie;” and with Baltasar Gracian, who said, “A single lie destroys a whole reputation for integrity.”

I learned early on that I’m a superlative liar, but I don’t bother for two reasons, one prosaic and the other meaningful.

Prosaically, when you lie you need to remember every one of them or they will trip you in the future.

The more profound reason was best stated by George Bernard Shaw when he said, “The liar’s punishment is not in the least that he is not believed, but that he cannot believe anyone else.” And that’s just not how I wanted to live my life.

We’ll end today with a bit of political levity from Adlai Stevenson, “I have been thinking that I would make a proposition to my Republican friends… that if they will stop telling lies about the Democrats, we will stop telling the truth about them.” Too bad they didn’t take him up on that!

Your comments—priceless

Don’t miss a post, subscribe via RSS or EMAIL

Image credit: semaphoria on flickr

There is a dangerous assumption out there that ‘leaders’ are chuck full of positive traits and on the side of the angels, but I’m here to tell you that it ain’t necessarily so. Just as leaders come in all shapes, colors and sizes they come with a wide variety of traits, not all of them positive. But it seems as if succession is tough all over.

Italian police have caught the Sicilian Mafia’s number two, the latest in a string of top-level arrests that has given the crime group that once terrified Italy problems with rebuilding its leadership.

The hero CEO who will save the company easily morphs into the imperial CEO. An intelligent, thoughtful opinion piece by Ho Kwon Ping in Singapore considers the dangers of this happening and assumes it will continue in the US—and it probably will.

The leadership of any company is critical to the success of its mission — but no one individual is mission-critical.

Yesterday I wrote Real Leaders are Fair, which means applying rules equally, but that rarely happens, especially when a government is involved and ours is no different. Consider the non-application of a federal law backed by a presidential proclamation that prohibits corrupt foreign officials and their families from receiving American visas. But business interests always seem to trump fairness.

“Of course it’s because of oil,” said John Bennett, the United States ambassador to Equatorial Guinea from 1991 to 1994, adding that Washington has turned a blind eye to the Obiangs’ corruption and repression because of its dependence on the country for natural resources. He noted that officials of Zimbabwe are barred from the United States.

Finally, on a lighter note, I found the answer given by Ask the Coach to this question to be classic.

Q: I am having a difficult time leading my team. The team members will not follow my instructions, which I am sure would make our project much more successful. What am I doing wrong?

A: What you’re doing wrong is very simple: you have simply forgotten that your team is more critical to the success of your project than you are.

Take a moment and read the whole post, I guarantee you’ll like what you learn.

And if you want more of my picks you’ll find them here.

Your comments—priceless

Don’t miss a post, subscribe via RSS or EMAIL

Image credit: nono farahshila on flickr

Neglect. Drugs. Abuse. Molestation.

Where do you go when those four words describe your parents and your home life?

Where do you sleep; what do you eat?

When you’re cold and hungry you do what it takes to survive, including stealing and selling whatever you can find to sell—including yourself.

And these kids are as young as 10 years old.

The NT Times ran a two-part series called Running in the Shadows about teen runaways. It should be required reading for every American (part 1 and part 2).

Children on Their Own

This is the first of two articles on the growing number of young runaways in the United States, exploring how they survive and efforts by the authorities to help them.

Many cling together to avoid predators, but many more are seduced by pimps—it doesn’t take much.

“My job is to make sure she has what she needs, personal hygiene, get her nails done, take her to buy an outfit, take her out to eat, make her feel wanted,” said another pimp, Antoin Thurman, who was sentenced in 2006 to three years for pandering and related charges in Buckeye, Ariz. “But I keep the money.”

Out of frustration, Sgt. Byron A. Fassett of the Dallas Police Department started looking for patterns in child prostitution cases.

One stuck out: 80 percent of the prostituted children the department had handled had run away from home at least four or more times a year.

Fasset created a special “High Risk Victim” unit within the Dallas PD that has seen enormous success, both in getting kids out of that life and putting the pimps behind bars.

The unit’s strength is timing. If the girls are arrested for prostitution, they are at their least cooperative. So the unit instead targets them for such minor offenses as truancy or picks them up as high-risk victims, speaking to them when their guard is down. Only later, as trust builds, do officers and social workers move into discussions of prostitution.

Repeat runaways are not put in juvenile detention but in a special city shelter for up to a month, receiving counseling.

Three quarters of the girls who get treatment do not return to prostitution.

The results of the Dallas system are clear: in the past five years, the Dallas County district attorney’s office has on average indicted and convicted or won guilty pleas from over 90 percent of the pimps arrested. In virtually all of those cases, the children involved in the prostitution testified against their pimps, according to the prosecutor’s office. Over half of those convictions started as cases involving girls who were picked up by the police not for prostitution but simply as repeat runaways.

Those statistics are amazing. Here we have a case of initiative taken; leadership shown, and impressive success. Not a fancy approach, but a pragmatic one based on a proven pattern.

So why hasn’t it been applied across the nation?

In 2007, Congress nearly approved a proposal to spend more than $55 million for cities to create pilot programs across the country modeled on the Dallas system. But after a dispute with President George W. Bush over the larger federal budget, the plan was dropped and Congress never appropriated the money.

Just $55 million dollars, that’s all; a drop in the bucket in comparison to most earmarks.

But, in their wisdom, our wonderful, elected leaders in Washington didn’t believe it had enough reelection value to make it worth fighting for—maybe this is what’s meant by throwing the baby out with the bathwater.

Of course, these kids can’t vote, may not live long enough to vote, so it’s no big deal to the folks on their perpetual campaign trail.

Your comments—priceless

Don’t miss a post, subscribe via RSS or EMAIL

Image credit: Franco Folini on flickr

Saturday we looked at some incongruous actions and compensation of various CEOs and it reminded me of something I read a year or so ago, so I went looking and found it. Amazing!

I realize that housing is a touchy subject these days, but over the last few decade as houses got bigger and bigger I found it weirder and weirder.

There’s no way to ever convince me that any family or person, really needs a seven thousand-plus square foot house in order to live comfortably—let alone 10,000 and up.

The item I remembered article was  an UpFront blurb in Business Week that I found hilarious.

The research was done by Finance professors David Yermack of New York University and Crocker Liu of Arizona State University and their conclusions casts housing excess in a new light.

The bigger or pricier the house…the greater the risk of lackluster shares.

If [the CEO] buys a big mansion, sell the stock. Many of these guys have been super performers, but at some point that stops, and they reap the benefits.

Seems reasonable to me.

Remember the old saying? Something about boys and the price of their toys.

Seems like the toys’ values are going up, while the boys’ values (and value) are decreasing. (Note: As used here, “boys” is genderless.)

I doubt that the current housing market has changed that particular mindset.

So the next time you go to invest, be sure to plug in the size of the CEOs home when evaluating a company and, thinking about it, the same probably applies to the entire C suite.

Your comments—priceless

Don’t miss a post, subscribe via RSS or EMAIL

Image credit: Atwater Village Newbie on flickr

Yesterday was Bosses Day and in honor of that I’m going to share some information on bosses—BIG bosses.

These days’ people are incensed with executive pay packages on and off Wall Street.

For years there has been much talk about pay for performance, but I haven’t seen any strong connection—have you?

And certainly not this year.

But the recession doesn’t seem to have slowed down CEO compensation at all and I’m not even referring to Wall Street.

You’ve probably never even heard of the 5 most highly compensated CEOs, unless you are unfortunate enough to own the stock or work or been laid off from the companies. The 5 are Eugene Isenberg, chief of Nabors Industries, Michael Jeffries of Abercrombie & Fitch, Brian Roberts  of Comcast, John Faraci of International Paper and James Stewart of BJ Services. Ugh.

By now you all know that those poor mistreated boys and girls at what used to be Merrill Lynch are getting their bonuses, perhaps if they get over their embarrassment they will start spending and give the economy a real boost.

And then there’s Ken Lewis, the beloved CEO of B of A—the bank we love to hate.

You probably read that Kenny is “stepping down” and has agreed (under duress) to forego his 2009 salary and bonus and repay a whole million dollars. In case you were actually impressed with this, please note that he will walk away with a $53 million pension plan.

That’s on top of everything he’s made (I refuse to say earned) previously.

The NY Times had an interesting article that explains that Lewis isn’t incompetent, he just can’t lead. But from where I sit by the time anyone makes it to the corner office of a corporation the size of Bank of America should be able to do it all.

A few months ago CEO magazine published Why Smart Chief Executives Make Dumb Decisions; perhaps they should a copy to all the CEOs mentioned in the articles to which I’ve linked.

It probably wouldn’t help, those guys are so smart they don’t need any outside input that doesn’t agree what they think—just ask them.

In closing today, be sure to read Phil Gerbyshak’s description of the boss anyone would kill to have at Slacker Manager.

Your comments—priceless

Don’t miss a post, subscribe via RSS or EMAIL

Image credit: nono farahshila on flickr and HikingArtist.com on flickr

The leadership industry dotes on the idea that visions are what make leaders, since they influence people, and that visionaries aren’t like you and me and require special handling.

It’s CEO visions—those rosy predictions, high hopes and self-deluding prophesies—that fill annual reports that sway analysts.

From Business Week: Are stock analysts swayed by an annual report’s CEO letter to stockholders? Yes, concludes a forthcoming study in Organization Science. Researchers from Pennsylvania State University and other schools looked at 367 shareholder letters written by new CEOs from 1990 to 1999—giving each leader a “charismatic vision” score. To assign ratings, they scrutinized the texts for moral, ideological, and emotional characterizations of future plans and past mistakes. They also counted the number of times such words as “believe” and “commitment” appeared—along with team-oriented terms like “we” and “our.” Their finding: the more charismatic the text, defined in this way, the more likely analysts were to issue a “buy” for the company. Such language also led to off-the-mark earnings forecasts from analysts. While the decade studied coincided with the dot-com era, when analysts often said “buy,” Penn State management professor and co-author Vilmos Misangyi believes the findings also apply to the current economy, as uncertainties may prompt a strong reliance on a business leaders’ words. “If anything,” he says, “I would expect stronger effects today.”

Keep that in mind when you invest the paltry amount you have left after the most recent Wall Street vision decimated the economy.

Why is it that we accept as intelligent gospel visions of credit default swaps and derivatives from guys in $3000 suits, but would consider the same ideas as ravings if they came from a smelly guy wearing dirty clothes?

How much of so-called leadership vision is form and how much substance (or the result of a substance)?

And even when the substance is there, what is it worth when it’s left as a vision with no operational plan?

Read this post from Steve Roesler for a great example of vision sans plan.

Your comments—priceless

Don’t miss a post, subscribe via RSS or EMAIL

Image credit: sjtodey on sxc.hu

Executive compensation is in the limelight these days—not that it’s ever out. People have always been fascinated by the lavish paychecks of high profile players, whether business leaders or Hollywood icons.

The list of executives paid for non-performance in 2006 pales in comparison to CEO pay in 2008.

We’re all taught the value of hard work, exceeding goals, giving our all, but some have found a better way—a loving Board.

Non-performance bonus money isn’t new; in 2007 Coke had a $2.9 billion noncash charge in the fourth quarter, so they cut 3500 workers and their execs missed their performance bonus targets, but the Board stepped in, giving “…millions of dollars in “discretionary cash awards.”

And no matter how good a leader is, does any performance warrant an average of $144,573 a day for 13 years?

The explanation (excuse?) for these giant pay packages is the same one that kids have been using for generations—peer pressure.

Boards claim they can’t hire the best (AKA biggest name; best negotiator) without these outsize pay packages, but there are hundreds of skilled executives that could be had for less and who would probably do more.

For all the public outcry against outrageous pay there is none against the directors who don’t just approve it, but spend their effort outbidding the other Board.

When are they going to show some real leadership instead of whining and complaining about government interference?

And when will the washed and unwashed start putting the blame where it really belongs?

Little girls are made of “sugar and spice and everything nice;” little boys are made of “snakes and snails, and puppy dog tails;” and many (not all) “leaders” are made of ego and greed and the skill to mislead.

What are Boards made of?

Your comments—priceless

Don’t miss a post, subscribe via RSS or EMAIL

Image credit: jimrhoda on sxc.hu

Last Thursday the John Ensign (US Senator) scandal triggered a post about the hypocrisy kids see these days in so-called leaders; not their lies, but their over the top do-as-I-say-not-as-I-do attitudes and actions.

In response, Dan Erwin commented that rather than standards, i.e., set rules, he preferred to teach his kids about covenants, because “Legalism, in all its forms, is really death-giving stuff. I go back to covenant…covenants get renegotiated.”

By definition, a covenant is “an agreement, usually formal, between two or more persons to do or not do something specified.”

But Ensign’s hypocrisy was pushed off the hot seat by the same day when South Carolina Governor Mark Sanford was caught in an affair.

While I think Ensign’s worst hypocrisy ties to his position in Promise Keepers, it pales in comparison to Sanford’s when you consider his historical stances.

I agree with Dan’s covenant approach because I’ve always believed that humans and absolutes aren’t a working or winning combination.

But to renegotiate a covenant, whether with a spouse or constituency, requires at least a modicum of rationality and Sanford’s own words put that in question.

Over a 20-year period, ”There were a handful of instances wherein I crossed the lines I shouldn’t have crossed as a married man, but never crossed the ultimate line.”

Shades of President Clinton, whom Sanford roundly condemned during the same period.

Those times “took place during trips outside the country to ”blow off steam” with male friends.”

All the while preaching and campaigning based on a “family values” persona.

“…he would die ”knowing that I had met my soul mate.”

Isn’t that what his wife is supposed to be?

”I owe it too much to my boys and to the last 20 years with Jenny to not try this larger walk of faith.”

Owe it to what? The last 20 years of lies? Can you find anything rational in this statement?

Out of curiosity I did a completely unscientific poll of young people I know ranging in age from mid teens to mid twenties.

Much to some of their parents surprise they were fairly well informed on the subject.

None seemed either shocked or surprised and most said that the bad part was the stupidity of getting caught.

They said they saw getting caught as the real error in most of the stuff about which they’d read or heard during their lives.

And that is what’s truly sad.

While the destruction and disillusionment caused by leaders such as Madoff, Skilling, Sanford and all their act-alikes is terrible, the level of cynicism bred by this kind of hypocrisy is the truly tragic damage being done to our future.

Your comments—priceless

Don’t miss a post, subscribe via RSS or EMAIL

Image credit: I See Modern Britain on flickr

(Today continues a conversation initiated last Thursday and added to yesterday.)

Everybody lies about sex. Those who aren’t getting any say they are and those who are getting it where they shouldn’t deny it.

Governor Mark Sanford followed the same path of Newt Gingrich, Bob Livingston, Rudy Giuliani, John Ensign, David Vitter, Larry Craig, Mark Foley, Helen Chenoweth (the first woman) and many more.

But you know what?

I don’t care. At least, not about the sex—or even the lies. Even the lies under oath, because I don’t believe that an oath is going to change someone’s attitude about admitting something they don’t want to admit, it just adds another layer to the lie.

As Becky Robinson pointed out in her comment I could have just as easily used the Evangelical community—Jimmy Swaggart, Marvin Gorman, Jim Bakker, Lonnie Latham, Earl Paulk, Paul Crouch, Douglas Goodman, Frank Houston, etc., etc., etc. and, of course, the Catholic Church.

Dan Erwin made two very salient points.

In his first comment he said, “If you reframe the context from leader to bureaucrat, then the ethical expectations change.”

Amen, Dan. To assume that an elected official or any person-out-front automatically possesses all the sterling qualities of a “leader” as defined by the media, pundits and leadership industry has no basis in fact.

The second point that hit me was, “The notion of “standards” etc. is often a set-up for failure.”

This is getting closer to what angers me so much.

Not the sex, not the lies, but the standards.

Standards that they defined, preached and worked so hard to shove down everyone’s throat—standards that not one of them has even come close to practicing.

Mark Sanford voted for President Bill Clinton’s impeachment citing a need for “moral legitimacy” as his reason. Now he cites the Bible and the story of David and Bathsheba as his reason for not resigning.

As to the apologies, are they for the action or for getting caught? Americans are so focused on the sex and accept the apologies so readily that the hypocrisy becomes mere background noise.

It’s the Richard Nixon mentality all over again. As Nixon said in 1977, “When the president does it, that means it is not illegal,”

The reigning slogan these days for too many “leaders” seems to be “do as I say, not as I do,” which both angers and confuses their followers.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Dan also said, “No question but what they’re hypocrites…of the worst kind. They made claims they didn’t follow through on. However, the issue parents (and grandparents, too) have to deal with is the education of your children.”

We’ll explore Dan’s thoughts and personal example of this in the next Leadership’s Future on Thursday. Please join us.

Your comments—priceless

Don’t miss a post, subscribe via RSS or EMAIL

Image credit: Poldavo (Alex) on flickr