Three CEOs That Should Give Back Their Pay
Sprint's chief executive is returning more than $3 million in an effort to pacify angry investors. What other CEOs should do the same?
Let's start with the most obvious…
Scott Thompson, CEO of Yahoo!
Is it okay to lie on your resume? If Bob the Average Accountant or Jane the Everyday Sales Manager were caught lying, they would be thrown out the door. Their careers would be tarnished, and if other employers caught on, they may have trouble securing future employment.
Scott Thompson, Yahoo!'s (NASDAQ: YHOO) fearless (or is that fearful?) chief executive, will forever be famous as the man who lied on his resume. Carol Bartz may be known as the loudmouth Yahoo! CEO who ran the company into the ground. But Thompson -- the man who was believed to be capable of saving Yahoo! -- is a liar.
People don't like liars, especially not when money is involved. If he lied on his resume about this, what else might he be hiding? And if he didn't lie -- if the people he works with decided to lie without his permission -- one has to wonder about the ethics of those he chooses to work with and how they might impact Yahoo! going forward.
Early this morning, Forbes reported that while Thompson has apologized he refuses to step down. This could cause more harm to his company -- the company he was hired to save.
Without knowing if he's innocent or guilty, I won't say that Thompson should be forced to give back a significant sum of money, nor will I suggest that the board should vote to cut his pay. But as a CEO in turmoil, and as the leader of a company that is anything but economically safe, it is Thompson's duty to do whatever he can to ensure the survival of his firm.
If that means a pay cut or pay return is in order, then so be it.
Reed Hastings, CEO of Netflix
How many CEOs are capable of taking a company to nearly $300 a share, only to kill the stock and drive the firm into the ground with little hope of recovery?
Alright, maybe Hastings isn't that bad. And maybe the CEO of Majesco (NASDAQ: COOL) did a far worse job of sustaining his firm's value, which traded at $280 a share last decade (it currently trades for roughly $2.30). But even if there were a thousand companies that were worse than Netflix (if you look hard enough, you can probably find 100,000 that are in a much worse position), that wouldn't change the fact that Hastings is primarily responsible for the demise of the next great tech company.
Netflix (NASDAQ: NFLX) is no longer a "next great" anything. It was the future of streaming video. It could have set the stage for a cord-cutting revolution. But with lackluster content deals, rising prices, and weak margins on streaming video (which is much less profitable than DVD rentals), Netflix's future does not look that bright.
However, it wasn't until Hastings started messing with consumers that we began to realize just how troubled the company had become. Up until the price hike, the Qwikster fiasco to cut DVDs, and a handful of other questionable decisions, Hastings was thought of as a smart CEO. Netflix was believed to be a strong and stable company. No one knew the truth behind the streaming video giant.
And now that we know, we only have one thing to say: give us our money back, Reed Hastings! Whether you're a shareholder, a current subscriber, or a former Netflix user that couldn't bear the price increase, don't feel ashamed in thinking Hastings owes you something.
Satoru Iwata, President of Nintendo
Satoru Iwata may not be a Chief Executive Officer, but as the president of a company that was once the strongest video game publisher in the world (and one of the largest and most powerful corporations in Japan), Iwata was responsible for a number of mistakes, including:
- Charging too much for the Nintendo 3DS, forcing a premature price drop.
- Allowing the Nintendo 3DS to launch without high-quality software, which also contributed to the price drop.
- Failing to maintain a steady flow of high-quality games for the Nintendo Wii.
- Failing to impress the masses when the company's next game console, Nintendo Wii U, debuted last summer.
Iwata responded to the lackluster launch of the Nintendo 3DS by taking a voluntary pay cut of 50%. Nintendo reps have repeatedly stated that they learned their lessons and that Wii U will have a strong launch lineup this Christmas.
That may be true. But Iwata is in charge of a company that was at the top of the world. At last count, the Nintendo DS had sold more than 120 million units worldwide. There is no reason why the 3DS shouldn't have repeated that success. But it hasn't. And you can't blame the iPod Touch for that. You can only blame Nintendo.
For now, Iwata's pay is low enough that he (probably) shouldn't have to give any money back. But if the 2012 Electronic Entertainment Expo comes and goes without a single Earth-shattering, corporation-changing announcement, the size of Iwata's paycheck should be the last of his concerns.
At that point, he'd better start looking for a now job.
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