Archives for May 2014

Why the Average CEO makes 257 Times the Average Pay in USA (for executive presence?)

May 30, 2014 By Tom Mungavan Leave a Comment

A market economy is a good thing unless it’s not. There are many articles about CEO pay and it is easy to question the rationale for such large gaps between different CEOs, let alone between CEO’s and the average worker. Are companies really willing to pay that much more for executive presence? Most CEO’s do not make the headlines in terms of their pay packages. In working with some great CEO’s, I know the job is much tougher than it looks. It is also much riskier than most jobs.

An Associated Press article listed the market forces at work that are creating the expanding pay gap. For a link to the full article, see below. The abbreviated list is:

1. They’re paid heavily in stock … stock awards were up 17% last year which is the highest on record. The long-term gain for stock also has a favorable tax rate so more is kept in the pocket. The S&P average last year was up 30% and is setting records again this year.

2. Peer pressure … since no board wants to hire an “average” CEO there is a bias toward higher and higher pay packages to “attract the best and the brightest” even though the objective measurements are almost nonexistent.

3. The superstar effect … when athletes can earn tens of millions of dollars for playing games and have half the year off, why shouldn’t we pay more for a star CEO? If 20-something sports superstars make so much more than those at the “bottom”, why not the experienced CEO? We tend to give CEO’s more credit, and more blame, than they deserve in terms of their impact on their company.

4. Friendly boards of directors … who were picked by the CEO and were (or are) CEOs from other companies. They tend to buy into the high compensation justification.

5. Stricter scrutiny … that CEOs face today makes their job more risky. To attract and keep good CEO’s they feel the need to give the CEO “hazard pay” to compensate for the risk.

Why many of us aren’t getting a raise

1. Blame the robots (and computers) … who are taking over many jobs or increasing productivity such that fewer workers are needed. Nearly 45% of workers who have attended at least some college earned under $10.10 per hour last year. College degrees continue to command significantly more pay on average.

2. High unemployment … the Great Recession and the technologically unemployed causes higher unemployment for some who may never recover fully. Pressure for higher pay to retain or recruit is low. There are many candidates able to replace most workers today.

3. Globalization … makes many jobs direct competitors to workers in low-wage countries. The average Chinese factory worker makes one-tenth of their counterpart in the US. China also graduates more competent low wage engineers than the US has in total graduates from college.

4. Weaker unions … are both a part of the result and part of the problem. There is less collective bargaining for higher wages.

5. Low inflation … averaging 1.6% takes away the argument for higher wages to keep up with inflation.

For the full article: [… The CEO of your company just got a huge raise. You didn’t. Here’s why.]

2014 May – Change Masters President’s Letter

May 23, 2014 By Tom Mungavan Leave a Comment

Do you ever over-estimate what you can do? I had back surgery last week and thought my recovery time would be a great time to complete this May President’s Letter. Well, it did not get done. After a week of a heavier level of pain pills than I like to take, I am starting my second week of recovery and am able to do more. Based on some of what I read and what clients tell me, the battle with time and priorities are a challenge to many of us. I thought it would be appropriate to include a couple of blogs regarding use of time this month.

Thank you to those that have reported sharing the President’s Letters with their teams. If people would like their own copy, the can sign-up at www.ChangeMastersAcademy.com. I appreciate your feedback and suggestions at any time; you can either contact me or enter a comment.

There has got to be a better way

In a WSJ article, there were some disturbing study results. “How Companies Are Putting Managers in a Bind; Businesses Are Giving Bosses New Responsibilities but Not Training Them for Those Roles” by Hermina Ibarra, found the most commonly used traditional support for learning was least effective. Most companies have very strained training budgets when the critical need for training is higher than ever and on a strong upward slope. [… more]

The Executive Brain Surprise

Recent research reported in the Wall Street Journal tells us much of what we think about how executives think is untrue. For example, tight deadlines are often thought to energize and motivate individuals and teams. The study found tight deadlines are usually counter productive and kill creativity and innovation.

New technology allows scientists to see what part of our brain is engaged in a variety of situations. The scientists are able to see what part of the brain we use to make decisions [… more]

iPhone Apps to help you feel safer

There are some new iPhone apps that may help you feel safer. The functions range from notifying friends with your location when you press a “panic” button to recording video and making loud noises. [… more]

It is not about the tasks!

One very successful CFO of a Fortune 500 company said “I don’t do anything anymore.”

He said that his day is spent in meetings and talking to people. Every day passes. He said, “I cannot point to any one thing I have done. When I was 32 years old, I knew I had completed a report or that the accounting books balanced and I could go home.” The fact is that being an effective leader it is not about the tasks! [… more]

Executive Presence and Interpersonal Skills

Your interpersonal communication determines how you are perceived in the workplace. And as an executive, your interpersonal communication determines the strength of your executive presence. The vast majority of executives whom we coach have very little idea about how they are perceived in terms of their communications. That’s the bad news. The good news is that [… more]

Avoid the “Heartbleed” Internet security issue

Change your important Internet passwords frequently, make them hard to guess, and use different passwords for each of your important websites like your bank. If you do that, you do not need to read further. Otherwise, [more…]

Video: Time Perspective for Understanding

A study by USA Today on use of people’s time found over 50% said they were busier than ever. They say they sacrifice the time with friends, family, and sleep for success. Asked what they would do if they had an 8th day every week, the answer was [… more]

The Executive Brain Surprise

May 23, 2014 By Tom Mungavan Leave a Comment

Recent research reported in the Wall Street Journal tells us much of what we think about how executives think is untrue. For example, tight deadlines are usually counter-productive and tend to kill creativity and innovation.

New technology allows scientists to see what parts of our brains are engaged in a variety of situations. This technology now allows scientists to see what part of our brain we use to make decisions, and how effectively it functions. Some surprising statistics:

One is the number of things the brain can rationally deal with at one time. No wonder our smartphones often feel counterproductive.

10% of the workday (on average) is the number of hours we are productive decision makers.

4X – four times as many people think they do their best thinking at work compared to at home.

75% of people in uncertain situations look past the facts and assume the worst “gloom and doom” predictions (that do not come true).

Multiple studies indicate that hard-nosed, fact-based leaders are more effective short-term. The leader who balances emotion and motivation with facts tends to be most effective strategically and longer-term.

I could not help but notice that they are documenting the importance of leadership communications in key areas that we focus on in our coaching. The are also citing the likelihood that leaders’ brains can be trained to use the more productive parts of the brain more often.

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To see the Wall Street Journal article go to: The Inner Workings of the Executive Brain

Time Perspective for Understanding Others

May 23, 2014 By Tom Mungavan Leave a Comment

In a USA Today study on use of time 50% of those in the study said they were busier than ever before. The members of the study said that they sacrifice time with friends, family, and sleep for success. Asked what they would do if they had an 8th day every week, the answer was to spend most of the time working. Were you part of that study?

This video describes the six perspectives of time, what creates the viewpoints, and what the implications are for making decisions. It also makes powerful statements about how technology is “re-wiring” the concept of time … particularly in the US. Understanding these six perspectives of time can provide great insight into many differences in perspective. Here is a YouTube video link that provides insight on time and also a creative way to deliver a ten minute message.