Below is a post I wrote late last night and published to LinkedIn under CEORater. The post was in response to a Wall Street Journal article published about the use of an executive jet by former GE CEO Jeff Immelt which was not reported to the company’s Board. Short story is that too much is made of executive perks and insufficient attention is paid to executive performance and overall organizational performance.
“Let’s have a little clarity, honesty and transparency. An extra plane is small beans from an absolute dollar standpoint but speaks to a cultural/ political divide between GE‘s executive team and Board. By the way, shame on the Board if an extra plane was a “big deal”. At the end of the day performance is what matters. Operating performance/financial performance and stock performance with some balance between intermediate and long-term results (we are not advocates of “the next quarter”) matter. Beating “sand-bagged” financial targets is irrelevant. Achieving or almost achieving true stretch goals is relevant (which is why we hate the game of public companies publishing “guidance” much of which is sand-bagged). Every employee – CEO on down – whom contributed to performance/outperformance should be handsomely rewarded. This is why accountability matters. Otherwise, it is difficult to tie rewards back to those whom deserve them at the appropriate weighting. One size does not fit all when it comes to variable compensation.”