friday-rant
Human Resources

Rant: Football Transfers and CEO Pay

I wrote in this space recently about the chicanery, smoke and mirrors, riverboat gambling, snake-oil selling and confidence-man setups involved in strange world of technology merger and acquisitions, a world so far removed from the one you and I, dear reader, inhabit, that it not only has its own fast-talking, jargon-rich language but its own realm of perverse logic. Or “logic”, perhaps.

One aspect I touched on a week ago and want to amplify here is the vexed topic of CEO rewards. Known for some strange reason (coyness?) as ‘remuneration’ or even more strangely as ‘compensation’ (for all the hours you could have been doing something better?) the pay scales will make your eyeballs sweat and your lips go green.

Reaching for an analogy and spurred by the English Premier League season, the nearest I could get was football (the European, not American, variety). However, at least the participants in that game have the decency to create a transfer window rather than host a permanent blue-chip yard sale…

The CEO who truly screws up, like the football manager who truly screws up, wins big. Really trashing a company will win the perpetrator tens of millions of dollars as a golden farewell and that’s on top of the bizarre sweeteners (a million for moving house, anybody?) that come with the golden handshake.

Even in these fervid times for football that sort of dough easily buys you a playmaker like Newcastle United’s superb Yohan Cabaye who, unlike some tech CEOs, has proven to be a high-class individual who knows how to stay in control in a heated situation and consistently makes the right decisions. That’s an attitude that will doubtless take him off to Manchester United… any … day … now.

Big companies behave like big football clubs, throwing cash around like a grown-up version of the 16-year-old left alone with Dad’s wallet outside a shop selling Lambrini. The numbers are unimaginable, the stuff of a fabulous psychedelic tale imagined by Aldous Huxley reading Alice in Wonderland on a pharmaceutical high.

A moderate striker like Darren Bent might decline in worth by several million pounds per year but tech can top that. Imagine if you will, what it feels like to write off $8.8bn of Autonomy’s value 15 months after signing the UK shooting star. While fans obsess over a possible £100m ($150m) transfer for Spurs’ Gareth Bale to go to Real Madrid, accountants note that the sum could double over the course of the Welshman’s contract when salary and add-ons are factored in. Still, $300m is not much more than one-thirtieth of the Autonomy write-off. For that sort of money, HP, Autonomy’s buyer and Spurs’ shirt sponsor, could have assembled Messi, Cristiano Ronaldo and the rest of the world’s best players in a big squad and had spare cash for Cristal champagne for the boys every night.

CEOs come and go, are often asked to leave and cry their way to the bank. Their salaries, bonuses and the kiss-offs when they fail are through the roof across the board. So why does it keep happening? Exceptional people deserve exceptional rewards and the stakes are high, goes the plea. But there have always been exceptional people, the stakes have always been high and the delta between Joe Bloggs and CEOs in pay scales has grown exponentially. The reason tech leaders get paid so much is there is no good reason.

Pampered footballers, pampered executives; different game, same issues.

 

Martin Veitch is Editorial Director at IDG Connect

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Martin Veitch

Martin Veitch is Contributing Editor for IDG Connect

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