The language used in connection with Pfizer CEO Hank McKinnell's sudden ouster is getting more and more revolutionary.The latest addition to strongly worded headlines comes from the Wall Street Journal:
"Off With Their Heads"
This preeminent newspaper declares, "There's been a lot of griping about executive pay recently, and Hank McKinnell's severance package, estimated to be worth $83 million, will do little to damp the indignation.
But Mr. McKinnell's surprise ouster as CEO by Pfizer's board last week illustrates the flip side of the executive-pay coin: Top executives in the U.S. are paid for performance, and today's corporate directors are not shy about pushing out those whose performance doesn't measure up for shareholders."
"According to research by Burson-Marsteller, CEO turnover was up 126% in 2005 compared to 2000. Moreover, outsiders are increasingly being hired to replace departing CEOs; Burson-Marsteller puts the figure for outside hires in 2005 at 43%."
The WSJ ends the article predicting, "Pfizer's ouster of Mr. McKinnell shows that even high-profile CEOs at our largest companies aren't immune from market discipline. Mr. McKinnell will land on his feet. But think of him next time someone tells you corporate boards are rubber stamps for all-powerful CEOs."
And I guess, with that, Hank McKinnell has officially been declared "fired" by the WSJ.
3 comments:
This has become a "which came first, the chicken or the egg?" question.
Job longevity for CEO, CFO ,CIO, maybe others, is 18-24 months as per FENG, the Financial Executives Networking Group, http://www.thefeng.org/.
The people who are members of and run FENG announced these job tenure figures at a meeting I attended.
When they were asked why they thought this was so their answer was, "It is kill the messenger!".
A similar group is TENG, Technical Executives Networking Group http://www.theteng.org/, and they cite the same numbers for the same reason for their CxOs.
There does not appear to be a PENG, Pharma Executives Networking Group, but there is a MENG, Marketing Executives Networking Group.
One of the problems that no one addresses is "Who do CxOs owe their loyalty to?". Most people feel this is obvious, THE STOCKHOLDERS!
I have seen Board Room battles that were much worse than unhappy Stockholders. I have also seen companies taken down by the rank-n-file.
Bad or no leadership causes low morale among people who want to do a good job. These people quit, or get fired because they don't support the company line.
They are replaced by people who understand the game and see a way to get "theirs" before the other shoe falls. At this point the wheels come off noticeably.
I have also seen all the employees of a company fired because they would not "kiss the ring" of their new manager, the owner's idiot brother-in-law.
That company actually survived.
It's a tough call.
Oh yeah, Pfizer sure showed him. Sent him off to sulk with his 83 mil. It's a cruel world, I tell ya. I sure hope he doesn't off himself, grief stricken as he is.
Something seriously wrong with people who do poorly and are compensated beyond all normal reason for doing so poorly.
So how do I sign up for a job like that?
Do badly; Get gazillions when you are fired for doing badly.
Do badly: Get the Medal Of Freedom for screwing up the invasion of a country.
Do Badly: Write a book and make tons of money.
Something wrong here ya think?
Why are we obsessed with reading about people who have done badly and rewarding them for that behaviour with lots of money?
My parents screwed up badly. They taught me to do right and take responsibility for what I do whether good or bad.
Dang them!
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