Page 126 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

112 The Complete Guide to Executive Compensation

Employment Act (ADEA) notwithstanding]. Humiliation will be lessened with a generous
severance package, however.
Many successful executives are apparently motivated by fear of failure. This drive to
ensure that their present work is always considered good or, preferably, better than their
earlier work drives them to spend whatever hours are necessary to reduce the risks of failure.
As indicated, the ultimate failure is being fired. The worst part of being fired is not so much
the economic repercussion (since an alternative job elsewhere is probably available) as the
humiliation of defeat. The threat of failure hangs like the sword of Damocles over the heads
of successful executives.
For individuals with tremendous drive and a desire to prove to themselves (even more
than to others) that they have the ability to overcome virtually impossible obstacles, the
objective of the pay-delivery system logically is to channel these efforts by rewarding the
individual for doing those things the corporation thinks best.
Peer pressure is another factor; many CEOs and other top executives track their pay
progress versus their counterparts in other organizations. At the minimum, they consider it
necessary to stay even with such individuals, but they would prefer to have their pay progress
at a faster rate. Such views are tempered by the extent to which the person believes his or her
own responsibilities to be less or greater than the contemporaries’ responsibilities. Needless
to say, this is easier to do when pay is in the company’s proxy statement.
Furthermore, the executive typically believes that his or her own standards of perform-
ance exceed the expectations of the organization. Thriving under pressure, the individual is
capable of planning and paying attention to detail, as well as successfully executing a decision
that is personally not agreeable.
The problem many organizations have with such an executive is not how to motivate the
individual to achieve better performance, but rather how to avoid demotivating conditions.
Successful recruitment of such an executive by another company will probably be due to the
promise of new challenges (with commensurate pay), rather than simply a significant increase
in compensation.
Relationship with Superiors. To be successful, the executive must deal effectively with
three levels in the organization: above, the same, and below. The executive must remember
that superiors control pay increases and promotions. Therefore, being an effective sub-
ordinate is probably as important as being an effective manager. Interestingly enough, the
emphasis in personal development programs is on the latter. Yet probably as many effective
managers are fired because they are poor subordinates as vice versa. To be an effective
subordinate, the executive must identify with the company philosophy, which can range from
a family atmosphere to one of intense competition and little loyalty. The superior’s manage-
ment style is also important. One of the first facts to determine is whether the boss wants a
written memo or a verbal briefing. Some are readers; others are listeners. The readers are
handled by sending the memo and following it up with a meeting; the listeners are best
approached by having a meeting and then leaving a memo.
Ideally, the executive will both like and professionally respect the superior, although it is
more often one or the other. It is doubtful whether the relationship will last if both ingredients
are missing, unless the executive is prepared to be a very good actor—and the executive who
receives unsatisfactory pay and recognition will probably not keep up the act.
Being too good can be almost as bad as being a poor performer if the superior lacks
self-confidence. A possible indicator of this is when the executive’s work is signed by the