There’s a talking point from the big strikes in the news – from Hollywood to Detroit – and it’s sticking. Every type of business should pay attention.
No matter how you feel about the strikes, whether you’re ready to join the picket lines or you just want it all to be over, chances are there’s one union point you agree with: Senior executives sure make a whole lot of money. But it’s not just upper class money. In more cases, it’s movie star, rock star, sports star money.
The numbers tell the story. CEOs and what is now known as “The C Suite” (a relatively new term that has grown with the number of executives in our society with “Chief” as a part of their titles) have always typically been the highest-paid employees in their organizations. But now, all studies show they make more than ever, even when adjusted for inflation. The public has really started to pay attention.
For many organizations, it’s public information. For nonprofits, including higher education and health care, it’s all in the IRS Form 990, which has increasingly become the “front door” for anyone raising money via philanthropy. For public companies, it’s all in SEC filings and published elsewhere. Even in private businesses, signs of wealth show up in public places, like political campaign finance reports.
This can’t be whispered about anymore inside companies. Executives can’t get upset or take it personally when asked about it by journalists, employees or shareholders. For starters, it’s time for Boards of Directors, particularly those with compensation committees to work with communications staffers and outside PR counsel to have messaging with explanations ready to go and offer them as needed.
I’ve heard many of them on the inside. They range from “a good leader is hard to find in a competitive environment” to “it’s what the market will bear” to “the compensation is based on the company’s performance.”
In addition to having messaging ready to go before these numbers become a flashpoint, there is something executives can do to lessen their chances of becoming a target. It starts with being human. This is purely anecdotal, but first-hand experience shows that executives who are well-liked among their employee bases spark fewer controversies about their pay. Those who are seen within their organizations as authentic, relatable, charitable, collegial and mission-driven get the benefit of the doubt. Those are are seen as aloof, phony, greedy or bottom-line-driven very quickly have attention turned to how much they make.
We don’t know what the outcome of the strikes that are now dominating business news will be for the companies involved. But it’s easy to envision the narrative that will result. Now is the time to think about how it affects your organization.