One can imagine the heart-rending scenes that have taken place in Canadian bank board meetings of late. CEOs, overcome with attacks of guilt and propriety, plead with their fellow directors: “Please sirs, cut my pay, slash my bonus, and rip the stock options from my hands.
How can I eat cake while my customers starve?”
The directors balk, arguing that the CEO has done an extraordinary job of piloting a complex institution in difficult times. He has earned his fulsome compensation, they say, but then they grudgingly accede to his request. After all, it’s optically better to be seen as public-spirited than parasitic — like those shameless U.S. investment bankers who use public bailout money to refurbish their offices — in a time of economic crisis.
One would like to think bank CEOs, indeed all corporate managements, are awakening to something bigger, however. It’s the notion that business shouldn’t always be purely about maximizing profit and shareholder value, or taking home the biggest compensation package, whatever the consequences.
Corporations, like it or not, are part of the social fabric, and they concede as much through their community involvement and philanthropy.
Particularly in hard times, it’s fitting that companies temper the desire for growth and profit with concessions to the greater good.
For some companies, that might mean not having as many layoffs as possible; for others, it could be taking a pay cut.