Does anyone else see a disconect between these two news stories from the last week?
1. CEO pay at big companies rises:
The chief executives of the largest U.S. public companies enjoyed bigger paydays in their latest fiscal year, as share prices recovered and profits soared amid the country's slow emergence from recession. At these 456 companies, the median pretax value of CEO salaries, bonuses and long-term incentives, rose by 3% to $7.23 million, according to the consulting firm Hay Group.
2. Management performance at big companies continues its steep decline
• The rate of return on assets of US firms is one quarter of what it was in 1965.
• The life expectancy of a firm in the Fortune 500 has declined to less than 15 years and is heading towards 5 years unless something changes.
• Executive turnover is accelerating.
• The topple rate of leading firms is speeding up.
• Only one in five workers is fully engaged in his or her work: the larger the company, the lower the level of passion among the workers. Worker passion is closely related to innovation and connectivity.
• Established organizations are not generating new jobs. “Between 1980 and 2005, virtually all net new jobs created in the U.S. were created by firms that were 5 years old or less, that is about 40 million jobs. That means the established firms created no new net jobs during that period.”
Hint: there is another way
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