The Drive for Equity
We have made remarkable progress in executive compensation during the 1980s. We have weathered a severe recession, historic inflation, and the battering of major U.S. industries -- first textiles and smokestack America, then the oils, and now high technology, all hit by laissez-faire trade policies, aggressive competition from overseas, and the continuing entry into the U.S. of major Japanese and European companies.... Like our economy, executive compensation is in turbulent and somewhat painful transition to the new realities of the 1990s. The transition we are going through is based partially on circumstances out of our control, ranging from the new regulatory environment to the restructuring of Corporate America and its effect on executive jobs. Coming through our past struggles and the present transition brings us to the inevitable question -- what is on the horizon for tomorrow?
The theme which is as clear as a clarion call is the drive for equity. By equity, we mean two things: first, a risk interest, an ownership right, or simply put, a stake in the business; we also mean freedom to seek and to offer parity -- a fair deal. These certainly are not new goals, but today they are being pursued with a new sense of vitality and urgency. At every level and in almost every aspect of American business today, whether it be the small start-up, the well-financed venture capital enterprise, a leveraged buyout, the subsidiary of a conglomerate, or a division of an integrated major corporation, we are witnessing an unprecedented drive for equity -- for ownership - on the part of the management group, and a drive for fairness by other groups, notably shareholders and employees.
-- Pearl Meyer, compensation specialist then with Handy Associates and now with her own firm, Pearl Meyer & Associates, in "An Unprecedented Drive for 'A Piece of the Action'" [Fall 1987].
Another mystery commonly observed by committee pathologists is that the time consumed in debate is dominated by those with the least to offer (and to do). How often, whether at a board of directors meeting or a neighborhood association meeting, has one been subjected to interminable discussion only to have the resolution under consideration pass unanimously? Committees have thus been dismissed, in the words of Harry Chapman, with the following epitaph, in the form of a series of rules: "Never arrive on time; this stamps you as a beginner. Don't say anything until the meeting is half over; this stamps you as wise. Be as vague as possible; this avoids irritating the others. When in doubt, suggest a subcommittee be appointed. Be the first to move for adjournment; this will make you...