Two Comments to this post – Comedy and Tragedy at TransLink – that you might otherwise miss … and shouldn’t.
Tim Yzerman forwards this piece from Nathan Pachal (who, plug, is running for councillor in the City of Langley):
By attacking top-level compensation, it is implied that vast sums of money are going to pay for executives and board members, while other service suffers. Is this really the case?
Click to enlarge.
To put that into context, $3.1 million dollar is about how much it costs to run the 320 bus route for one year.
Some thoughts on executive pay.
The word “compensation” is a euphemism which suggests that all involved are a bit embarrassed and that someone is being paid too much. Notice that everyone making under $50k a year is “paid” and everyone making over $200k a year is “compensated”.
Corporations do not run as Joel Bakan would have you believe in “The Corporation”. They might be monomaniacly tasked with making money, but actually they are more complex. Corporations may be conceived as pure profit machines, but in reality they are organizations filled with people, and people respond to more things besides profit.
A pure profit machine would eliminate all unnecessary workers, move all production to East Asia, and pay people the bare minimum to get them to stay at their jobs. Stereotypes aside, corporations can be pretty half-hearted about this.
As anyone who has worked in any type of organization knows, waste abounds. There are people that don’t pull their weight, are too dense for the job or are overpaid. Bosses don’t deal with this because they want to avoid awkward situations (and because they are lazy, dense and overpaid too).
This dynamic plays out on boards. Everyone on the board knows each other personally and may be friends. While it may be in the organizations best interest to chop $100k off the CEO’s pay, no one on the board wants to tell it to the CEO’s face: “You’re not worth this” or “you’re too stupid for this job.”
I’m not for the elimination of all “waste” because, warts and all, human organizations are nicer that pure profit machines and partly because that “waste” spreads some of the wealth around. But a useful metric to determine whether people are overpaid is to look at how much attrition there is.
If people gush out of the place from every orifice, it’s a sign that they aren’t paid enough. If they never leave, then a sign that they are paid too much. So it’s a question that boards and all employers ought to be asking themselves: would these people still work here if they were paid less? And if the answer is yes, then pay ought to be trending down, not up.
Board of Translink: If you want to halve your CEO expense, I’ll do the job. I’m serious.