The Short Leash Of Highly Paid Executives
When a top executive gets fired and the public reasons are unclear or confusing, the most common explanation is that he or she lost support of his or her direct reports. It is generally impossible for any board or CEO to leave an executive in place when that executive’s direct reports are collectively revolting. What’s interesting: This is true in practice almost regardless of what you think of the reasons for the revolt.
If the reasons for the staff revolt are valid, then clearly a mistake has been made and must be fixed, the executive has to go. If reasons for the revolt are not valid, then there’s an even bigger cultural problem at that point, with an even broader cleanup required. But even if reasons for the revolt are not valid, the executive under fire is still right in the middle of it, has lost confidence from their troops, still goes.
Executives get paid the big bucks because their decisions impact lives and careers of 100s/K’s/10K’s of employees. Thus the short leash is justified. Another theory for high executive compensation is precisely to make it easier to take dramatic action when needed. It’s an implicit safety net. None of the preceding is intended to diagnose any specific situation, just the general pattern. I’m also not excusing any kind of bad behavior.
All of this double-underlines the importance of wise governance, leadership development, management training, and cultural integrity.[tweet https://twitter.com/pmarca/status/467555409453002752 align=”center”] [tweet https://twitter.com/rmcgahen/status/467552952543350784 align=”center”] [tweet https://twitter.com/benparr/status/467553006951858176 align=”center”]