THOSE AT the top of organizations must be the masters of many moving parts, some of which they control and some of which they can only adjust to. They make big decisions with big consequences for large numbers of people.
They must grow their organizations, their earnings, and their market share. They must be consistent in their performance. If they created or own the company they run, they are entitled to whatever they created. If they are hired to run the enterprise, their income is market driven, and in public companies is subject to the compensation committee of the board of directors.
To spend 20 or 30 years to gain the skills required to run a major company is common. In the process, these professionals become uncommon people. Their tenure is relatively brief at the top. The consequences of their decisions usually go far into the future. Their successors either get to build on those successes or must clean up those things that didn’t turn out as planned. To say that it is a high-risk, high-stress profession is accurate as far as it goes. The 24/7 nature of the task adds yet another dimension.
Most of us work for one boss or ourselves. CEOs of public companies work for a board of directors, and the resultant group dynamics. They must manage in two directions. When you add all this up, few can climb this mountain. Those who do are entitled to the view. They have paid a big price to get there.
The problems come when results don’t materialize. Are the corrective actions being taken the right ones, and is the situation within the control of the person in charge? That’s where boards earn their keep. The detail is hard to know from the outside looking in. Generally, the market rewards performance. The exceptions makes for lurid news stories.
Our economy is managed by millions of CEOs large and small. They produce far more than the millions in their compensation packages. Often we don’t know the names of those contributing the most to the creation of wealth for countless thousands of employees, suppliers and investors. Those who do know them are comfortable compensating them at the levels earned. This is how the most productive economy in history works.