Is it your imagination or has the management of your company recently become a whole lot nicer? Have your supervisors become more receptive to your needs? Are they more willing to show that they really care?
If the answer to all these questions is “yes,” you may not be totally delusional. See, your bosses have a brand new motivation for getting you to like them. These days, the person who decides whether or not they get a raise could be y-o-u.
I know! Historically, it’s always been the other way around. When the ancient Egyptians were building the pyramids, the person who decided was the person who held the whip. And in our modern corporate culture, where lugging 10-ton stones across the desert seems like a really cushy job, the boss still has the whip.
Assuming, of course, the boss has the support of the shareholders.
Employers have long encouraged workers to buy company stock. It was seen as a way to build an “ownership mentality” among the riff-raff who actually do the work. But the idea of the employee-shareholder has a flaw. Shareholders get to vote on executive pay.
Shareholders have always had this power. They just haven’t spoken up, being too disinterested or too wrapped up in the semi-finals of “The Voice.” Management, meanwhile, discourages participation by sending out annual reports, filled with totally repulsive glamour photos of overstuffed executives and endless pages of tiny type detailing arcane financial statistics. (Cuddle up, darling, and let’s talk EBIDTA.)
Recently, however, shareholders have started paying attention. “Employees, Too, Want a Say on the Boss’s Pay” is the title of a recent Gretchen Morgenson article in The New York Times. In the article, Morgenson reports on what could be a turning-point incident — a Citigroup’s shareholder soiree where “a $15 million paycheck for Vikram S. Pandit, the chief executive, got a big thumbs down.”
Some 55 percent of the stockholders voted against the Pandit pay package, and many of the thumbs being turned down were attached to the calloused hands of actual Citigroup workers.
According to Morgenson, the power of employee-shareholders can be a “formidable force,” a fact that did not escape the clever Pandit who “sent a memo to Citigroup’s employees, urging them to vote their shares. No surprise, he also recommended that they vote ‘yes’ on the financial giant’s executive pay plans.”
At this point, you are probably thinking that receiving a fawning, pleading billet-doux from your manager would be so amazing and enjoyable, that it would be worth giving the doofus their annual multi-million dollar payout. But let’s not jump at the first offer. Don’t settle for just a memo; you want something significant. That’s right; I’m talking about management sending every employee two tickets to Smurfs on Ice and a HoneyBaked Ham.
Citigroup is not the only corporate giant under attack. A small group of Wal-Mart workers have succeeded in forcing a shareholder vote on their radical idea of basing executive performance pay on actual performance. As you might expect, the Wal-Mart board is not particularly supportive of the employee proposal. “Its board already analyzes incentive pay for executives,” the board explained, “so the additional work being suggested would be duplicative.”
The board has a point, though hardly the point they are trying to make. To properly gauge the proper pay for a highly-compensated executive, you need to be a highly- compensated executive board member. How could some numnuts from the Wal-Mart tire department ever grasp the difference between Sevruga and Beluga caviar? Could a stock boy even begin to comprehend the humiliation a top executive would feel if his family had to vacation at a five-star resort on Aruba, when all his friends at the club own villas on St. Barts!
Communication giant Verizon has been dealing with snarky, ungrateful employees who have, as Morgenson puts it, “rattled the company’s cage over pay and other governance practices for the last 16 years.” In the case of Verizon, the cage rattlers are mostly retirees, an ungrateful bunch of seniors who have nothing better to do than pick up their monthly supply of surplus government cheese.
Like Wal-Mart, Verizon has explained that the company’s board has “‘conducted rigorous design testing’ to ensure that its compensation is appropriate and fair.” Surprisingly, the shareholders aren’t buying it.
The employee-shareholder revolution may not win every battle, but as Morgenson says, “it’s good to see shareholders start to flex their muscles.” And, let’s face it, nothing goes better with surplus government cheese than HoneyBaked Ham.
Bob Goldman was an advertising executive at a Fortune 500 company, but he finally wised up and opened Bob Goldman Financial Planning in Sausalito, California. He offers a virtual shoulder to cry on at email@example.com.