Setting an Example

[tech2101]

"I No Longer Want to Work for Money"

Link to article

A portion of the article:

First, as you know, we have a salary-cap policy, which limits the total cash compensation that can be paid to any team member. The board of directors has voted to raise the salary cap from 14 times the average pay to 19 times the average pay, effective immediately.... We are raising the salary cap for one reason only--to make the compensation to our executives more competitive in the marketplace.... Everyone on the Whole Foods leadership team (except for me) has been approached multiple times by "headhunters" with job offers to leave Whole Foods and go to work for our competitors. Raising the salary cap has become necessary to help ensure the retention of our key leadership.... This increase to 19 times the average pay remains far, far below what the typical Fortune 500 company pays its executives.... The average CEO received 431 times as much as their average employee received in 2004, while Whole Foods' CEO (me) received only 14 times the average employee pay in cash compensation.

Most large companies also pay their executives large amounts of stock options in addition to large salaries and cash bonuses. The average corporation in the United States distributes 75% of their total stock options to only 5 top executives.... At Whole Foods, the exact opposite is true: The top 16 executives have received 7% of all the options granted while the other 93% of the options have been distributed throughout the entire company.

The second part of today's announcement has to do with my own compensation.... The tremendous success of Whole Foods Market has provided me with far more money than I ever dreamed I'd have and far more than is necessary for either my financial security or personal happiness.... I am now 53 years old and I have reached a place in my life where I no longer want to work for money, but simply for the joy of the work itself and to better answer the call to service that I feel so clearly in my own heart. Beginning on January 1, 2007, my salary will be reduced to $1, and I will no longer take any other cash compensation....

If I remember correctly, Ben & Jerry's had a similar salary cap for its employees.

We are discussing this in one of my classes and was wondering what some of your (US Aviation members) thoughts are on this subject.

Do you think that market forces should determine the CEO salary? Should Boards of Directors (BOD/s) be able to serve as CEO's of other companies? As many of you know, it is like a club for the BOD's and the compensation committees. Many serve on each others boards and thus set the salary and stock options of each other through the compensation committees. Should there be regulation on the max a company can pay its top officer (or highest paid employee) compared to its lowest paid employee?

In my opinion, any company helped out by this U.S. Government bailout should be subject to some kind of salary cap for the executives.

 

[Cosworth]

I'll go one further. Any company helped by a government bail out should have it's 1st/2nd/3rd tier execs terminated. They were obviously unable to run the company effectively and I see no reason why they should continue on at my expense.

As far as the salaries go, I see no reason why they should be held to a different standard. You pay any employee what ever it takes to keep that employee in your company. Their salaries should be performance based just as ours are. If I do not perform to certain expectations, I get fired. I see no reason why a CEO should not get a reasonable base salary and have any bonuses based on the performance of the company. Whole foods seems to have a very good reputation in the corporate world. I for one would be willing to work for a good company and earn a little less than a greedy incompetent company for a little more. I know I would be far more willing to follow a CEO such as John Mackey or Lee Iaccoca than for someone like Ichan or the like. In the Israeli military, generals are out on the battle field having soldiers follow them, not the other way around. I want my leaders to lead by example. I want them to show me that they are not afraid to get their hands dirty.

 

[RDU Jetblast]

BOD's are not always clubs for the ceo's chums. Obviously, they have been in many cases, but the best one's I have seen were not.

They were the ones that brought different experiences to the table to overcome obstacles. Those meetings have been contentious, loud and sometimes resulted in a firing.

Salary caps? That would be a tough sell. As soon as one company does it, another will abadon it and there go the employees.

I am witnessing it now. my company averages about 35 grand for a line level employee with a H.S. diploma but fifteen miles away another company is offering 60G starting base with quarterly bonuses. They can be choosy. My company cannot.