Over the past months there has been a major backlash on the salaries of CEO’s. As job layoffs mount and bankruptcy looms for businesses, the CEO and their salaries have taken the blame for this economic downturn. Are we just looking for someone to blame or are we on the right path?
Maybe it is the business model itself that we have come to accept that is at fault.
As baseball celebrated opening week, let’s take a look at the business model of all major sports by using baseball as our example. Each spring, major league baseball teams practice and prepare for one thing, a World Series Championship. But, if you look at the CEO of baseball operations or the manager, the one’s making and shaping the team, their salaries do not compare to the ones that make the plays.
Look at the defending World Series Champions Philadelphia Phillies; they are managed by Charlie Manuel who will be making 3 million dollar salary for 2009. His responsibility is to manage the 25-man roster for eight months and provide the team an opportunity to win, just like the CEO. The Phillies have twelve players on their roster making more than the manager, which is 48 percent of the roster. Their star player, Ryan Howard makes five times as much as his manager, why? Charlie Manuel does not crank out homeruns, pitch shutouts or drive in runs, so he is not paid to perform but is paid to direct and organize.
With the current business model, the CEO has to make more than his employees but what does he or she provide? Are they specialized in marketing, sales, or production? A CEO is supposed to breakdown numbers and put his business in a favorable position to profit (a win), just like a baseball manager.
So what is the difference? There is none, just the perception. We have accepted that a CEO is more important than the employees. For those CEO’s that have taken pay reductions to maintain staff, they get the big picture!
If you have no team, you have no chance to win.
What is the value of your CEO? Have they put you in the best position to win? Only you can answer that, but the next time you hear it is the economy and your team needs to downsize, you are accepting another false business pretense.
It is not the economy, it is management. When teams lose in sports they fire the manager, not the players. Make sure that you are an expert in your field and your value will be compensated. Stop following the herd and become an All-Star.
Sports are a billion dollar industry and it succeeds, maybe today’s outdated business model needs to be revamped and CEO’s need to realize that they are important but it is the employees that drive in the runs!
