Page 125 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

Chapter 4. The Stakeholders 111

Effective leaders are results-oriented and decisive, with a clear sense of direction. They
are time-sensitive, making effective use of time. Knowing they will be getting work done
through others, they take the needed time to select the right people, counsel them on
performance, and assist them in their development based on their desires and organizational
needs. Leaders are focused on collaborative actions, empathizing where needed and taking
corrective action where appropriate.
A leader requires followers—individuals who respect the leader’s values, judgment, track
record, and commitment. It is hard to believe anyone would follow someone who was arro-
gant, dishonest, incompetent, insensitive, and/or untrustworthy. A charismatic personality is
a plus but not essential. Leaders ensure that the followers are treated properly. An effective
leader does not put self above or before the followers.

The Need to Succeed. If asked, most executives would probably indicate that they got
where they are through their own efforts, rather than because of whom they knew. Long
work hours have probably kept the individual away from the family more than he or she
wanted, but a genuine interest in the job has made this a rational trade-off. The executive’s
results-oriented philosophy is reinforced by a desire for greater responsibility and balanced
by a high level of integrity. While pay-for-performance-oriented, the executive has a higher
degree of loyalty than he or she would probably admit. Probably no other employee group is
as stereotyped as being believers in the work ethic as are executives: “Work hard, do a good
job, and you will be appropriately rewarded.” However, a few believe it is only important to
convince others you are underpaid.
Although professional or technical competence is highly regarded, the executive proba-
bly attributes success more to level of effort than to ability. The executive also probably
believes that personal strengths lie in problem-solving situations, circumstances requiring
creativity, and/or being able to effectively lead others.
Executives are subjected to more scrutiny now than in years past due to several well-
publicized accounting scandals and the lack of CEO pay suffering in relation to loss in stock
prices. There is a conviction that the job of the executive today is tougher than it has ever
been. Government intervention, shareholder dialogue, and the visibility of executive com-
pensation are all becoming more evident. Executives realize they must continually prioritize
the events affecting them—taking only as much time to analyze the data as is cost effective,
given the problems facing them. Furthermore, they must be prepared to modify each
decision, or alter its impact, as events and additional data make the earlier action inappro-
priate. Many must continually fight with themselves not to overindulge in an area of their
own interest and expertise at the expense of less attractive but more significant issues.
For most executives, there is diminishing time to relax. In spite of how successful they
have been in the past, the worry is about the present and the future. There is always pressure.
Being successful is difficult enough, but continuing to be successful without experiencing a
setback is both an impossibility and a requirement. The euphoria of success contrasts with
the humiliation of failure.
The ultimate humiliation is being fired. This is especially traumatic to those in mid-
career, since it may be difficult for them to get another job with commensurate pay and
responsibilities. The higher placed the individual, the fewer the opportunities. Executives
who are fired late in their careers may be able to simply retire (depending on the largess of
the separation agreement); those in their early career usually have a number of other oppor-
tunities available and don’t have to fight middle-age discrimination [the Age Discrimination