Last week, Erlanger’s Board of Directors voted to pay former CEO Jim Brexler nearly $750 million if he’d clean out his desk by the end of the day. Some of the board members implied infractions have occurred even before he just stopped showing up for work more than two months ago that would’ve been grounds for dismissal. But apparently his contract stated that he would receive a sizable severance just to walk away no matter what he did while in office.
I’m just as outraged as the next guy that major companies are so desperate for senior leadership that they feel obligated to dangle a ridiculously attractive contract simply to lure the “best of the best.” If you’ve had a good track record at one company (albeit, perhaps, under completely different conditions, including possibly taking credit for the work of others) then you can write your own ticket to the top. To me that’s like hiring Tommy Tutone to write songs for you just because he landed one hit in the 1980s.
You see, this is the “Occupy” grievance I understand. Sadly, it’s just the way business happens. It’s always happened that way, and it’ll continue to happen that way. The reason? Talented, savvy go-getters who can sell a hell of a lot of widgets or convince a lot of people they need these widgets make corporations money.
Their performance in doing so eventually lands them a job of leading widget development, production, marketing and/or sales. Then, if they’re lucky, they are tapped to oversee the whole widget caboodle. The seeds they plant along the way start to grow, and when the annual report is finally published they get a big old bonus—and a substantially revised contract.
Based on limited success these one-hit wonders negotiate the best possible contract they can. And who wouldn’t? The deal will include obscene amounts of money, and since the average CEO lifespan at a company is less than 10 years, the package always includes a nice golden parachute for the job hunt afterwards.
My take on the Erlanger situation is that the dude was leading a half-billion-dollar organization. A few hundred grand to tide him over until he lands another gig is peanuts by comparison. The best news may be that Erlanger now has the opportunity to change things with a new leader. The public isn’t always so lucky.
Chattanooga’s CEO—aka Mayor Ron Littlefield—gets to keep his job until March of next year no matter how he performs. His salary may be a fraction of the amount Brexler received just for leaving—and in Littlefield’s case there won’t be a severance package—but one thing’s for sure: He won’t be fired.
Even though more people voted to recall him than voted for him in either of the two previous elections that gave him the job, he won’t be fired. Even if the recall petitioners crossed all of the “T’s” and dotted all of the “I’s,” he won’t be fired. Why? Because litigation can muddle things up and delay action for months, years, or in this case, until March of next year.
Whether you like him or not, a lot of people think Littlefield hasn’t done nearly the job of our previous two mayors (although in his mind, I’m sure he has). Politicians are the best at both claiming credit and laying blame for what happened before them. CEOs aren’t so lucky.
My point is that people at the top are placed there by those who either can’t do the job or don’t want the job. The higher up you go the more money you make, but the stress and criticism rise right along with the stacks of cash. I don’t envy those who take on that type of responsibility. There’s no amount of money that would entice me to run a huge company—or a city, for that matter.
Those who take on that job, however, deserve some sort of respect and appropriate compensation. If you make a company millions and millions of dollars then taking a couple for yourself as an incentive bonus might be appropriate. It’s when those dollars come from ridiculous rate increases (health insurance) or from taxpayers (bank bailouts) that you haven’t really achieved anything, except fleecing those you depend upon to show a healthy bottom line.
I don’t know if Littlefield and Brexler are friends, but they seem to have a lot in common these days. Maybe it’s time they met up for coffee to compare notes for each other’s “Plan B.”
Chuck Crowder is a local writer and general man about town. His opinions are just that. Everything expressed is loosely based on fact and crap he hears people talking about. Take what you read with a grain of salt, but let it pepper your thoughts.