A Thought Exercise: How Would You Answer This Question?
While preparing for a recent media training, I came across a video clip from 2009 that I had never seen before.
The clip features Bob Diamond, who was the CEO of the British multinational bank Barclays at the time. During the interview, the reporter asked Diamond to defend his high compensation package—he was reportedly earning north of £20 million/year (roughly $30 million/year), with some reports putting his total compensation package at more than three times that amount.
As a reminder, this interview occurred shortly after the financial crash of 2008, when bankers, who were perceived to have contributed mightily to the crash, were under increased scrutiny.
Diamond started off strongly enough by making his case for free-market and performance-based compensation. But when the interviewer asked him whether he was worth as much as 1,000 Barclays tellers, he crumbled and took on the look of a boy who had been caught with his hand in the cookie jar.
Imagine, for a moment, that you were preparing Mr. Diamond for this interview. How would you have advised him to answer that question?
There’s only one “rule” for this thought exercise: You can’t advise Diamond to cut his salary or give a portion of it to the tellers, because there’s no indication from his response that he’d be willing to do either. Your advice should be based on the assumption that he’s going to continue receiving the same high compensation package.
What should he say? Please leave your suggestions in the comments section below. I’ll compile a few of your responses for a follow-up post later this month.
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He could say something like this:
Well, let me assure you that I am far from believing that I, as a person, is worth more than anyone else. But a CEO could be worth a lot to the company, and could be worth a higher salary. The performance of the whole company at least partly depends on the performance of the CEO. The company’s performance can in fact be the difference between expanding or downsizing.
He clearly hadn’t anticipated the question because he did look sheepish and came across as very defensive.
My pre interview coaching would have addressed this topic as follows:
“One of my many responsibilities is to look after the welfare of my fellow employees at Barclays who represent this great Bank in Cities around the world.
We work hard to make sure their jobs are as safe and secure as possible. And to deliver them the best possible working practices that we can. We want everyone to feel part of the Barclays family.
When I was given the opportunity to take on this privileged position as CEO of the Bank the remuneration package was in the public domain and certainly well known to my fellow members of staff.
A successful bank is vital for our customers as well as for all of us working for this great institution. And I see it as one of my main priorities everyday, to work as hard as I can for the futures of all of us who are part of this fantastic team .”
“Compensation is an odd thing to talk about, because so many people confuse monetary value with value as a human being.
No, I am not 1,000 times more valuable a human being than our fine employees. No one is. But when it comes to delivering value to our shareholders, and steering this corporation in a direction that protects the security of all our stakeholders and employees, that’s a different sort of calculation.
You can find a lot of people who would be willing to sit at my desk for a lot less… but that doesn’t mean they would deliver the same results. And when our board of directors feels like I’m only the second or third best option to lead this company, I will be out the door a lot sooner than our 2nd- or 3rd-best teller.”
Michael, Graham, Ike –
Thank you very much for your smart responses. I’m quite humbled to have you among this blog’s readership, and look forward to sharing your wise counsel with other readers later this month.
I continue to welcome more thoughts on the matter — so to other readers who haven’t commented yet, there’s still time!
Thank you,
Brad
I think Michael’s opening line above is very important. It’s a thoughtful approach to dealing with the “Do you think you’re better than other people?” sentiment.
I think that most people understand that senior level staff generally have more responsibility and more compensation so I’d ask the client if he could illustrate the company’s commitment to its employees’ growth with some examples including mentioning incentives, bonuses and opportunities for growth.
Looking forward to seeing what others will offer.
Two more ideas:
1. Money doesn’t work the same way in small amounts, as it does in big amounts. Different logics apply. When we try to connect the two “worlds”, we are always dumbfounded. A Bank’s CEO compensation can only be compared with a Bank’s dividend, share value, return on equity, etc.
2. The work of a good CEO can make the difference to whether the thousand tellers get a pay rise or not. It can decide whether it is possible for the Bank to grow and for a thousand careers to be moved forward. It certainly is a huge responsibility to get paid like that, because it is a huge responsibility to perform for all those hardworking people in the Bank.
This is a great example on the lack of media training. Mr. Diamond should’ve re-directed the energy in supporting his employees. Stating their validity and their contributions only strengthens his company should’ve been his answer. That would’ve shown humility, compassion to his staff, and positioned himself as a leader rather than a coward.
one reason why I am paid so well is to assure our customers that we are the best bank possible, and that every employee will be treated well and receive compensation that is competitive or better than banks of our size. Which is why I made it my business to make sure that tellers, who are the face of our bank to customers, get paid as well or more than other banks. Most of our customers will never meet me, but they know our tellers, and I assure you that I value them very, very highly.
English is not my native langauge, so I cannot articulate my propposal as good as some participants, which are brilliant; but my suggestions would be in line with the interviewed’s first answer: that compensation are in line with performance, so yes, if my performance got results that are 1000 times higher than some of my coworkers, well, I deserve that money.
(But honestly, I seriously doubt Barclay’s performance on that year deserved the 20 million quid he got).
Tough question, no doubt about it. I would have said something along these lines:
“Salary and compensation is determined by the free market, and not by any one individual. Thus, company shareholders and board determine the value of my contributions and leadership. And I welcome their evaluation.”
Hi, Brad. I’ve been periodically checking back for your response. When can we expect it? I’m looking forward to reading it. I hope I’m not overlooking it.
Funny you should mention it, Nikki. The post is scheduled to go live tomorrow! Thank you for reading and for your interest in this post.
Brad