One CEO Doing the Right Thing

With all the negative news about CEOs and outrageous salaries and bonuses, and the backlash and anger that have frankly scared me a bit, it was refreshing to read this article. You can try and find some flaw in his action, or see it for something other than it is, but personally, I think this is one man trying to do the right thing in the middle of a lot of madness. He is also letting his employees know that they matter, and we all know how important that is.

Kudos Jack Windolf, it's a step in the right direction.

DIY stimulus: CEO gives workers $1000 each from his own pocket
Bruce Watson

Jack Windolf, the CEO of Bollinger Insurance, recently gave his 434 employees a surprise gift: out of his own pocket, he paid each of them $1000. The bonuses, which Windolf called "a mini economic stimulus package," came from $500,000 in deferred compensation that he received when he sold 51 percent of the company last year. Rather than spend the money on himself, he chose to share it with his workers.CEOs have had a rough time of it lately. With outrage brewing about the scandalous bonuses that went out to executives at Lehman, AIG, Merrill Lynch and other huge companies, it's become increasingly lonely at the top. And for good reason.

After all, even a cursory analysis of the evolution of executive compensation over the past few decades is enough to bring out one's inner Karl Marx. By now, the statistics are pretty well-known, but let's review them one more time: in 1982, the average CEO made 42 times as much as the average worker; by 1990, they were making 107 times as much as their employees, and by 2007, 275 times as much. This meant, incidentally, that the average CEO made more in one workday than the average employee made all year.Some studies have suggested that employees don't begrudge their bosses the extra pay as long as the company is doing well. However, even by that metric, CEO compensation has grown out of control. With companies lining up to take government bailouts, it is worth asking exactly what companies are getting for their money. One can only imagine the feelings of AIG's rank-and-file employees, and the attitude among low-level workers at Merrill Lynch must be downright mutinous.

At its base level, the incredible disparity between CEO pay and that of rank-and-file workers suggests an out-sized veneration of the executive suite. Based on pure numbers, the idea seems to be that every CEO is worth 270 trained workers. Disturbing enough as that is, this perspective also goes a long way toward explaining the massive decline in customer service over the past few years.In this context, Windolf's decision is particularly meaningful. Faced with the option of hoarding over half a million dollars, he chose instead to distribute it among all those responsible for his company's success. In a fundamental way, he conveyed a belief that his workers add value to the company, and deserve to share in that value. While $1000 probably won't make all that much of a difference in the lives of most of Bollinger's employees, the respect Windolf has shown his workers is sure to yield huge dividends.

Maybe other CEO's should take note.

article courtesy of dailyfinance.com, picture courtesy of thedailyjournal.com