Monday, May 21, 2007

Most-Praised Generation

There was a good article in the Wall Street Journal by Jeffrey Zaslow concerning the attitudes of the 20-somethings. The article in itself was well written, although I thought it painted with a broad brush. Probably one of the most interesting aspects was the large number of comments. This Blog site does not support TrackBack, so I will just add my comments separate from the original post.

Last time I looked there was over 100 comments posted. They ranged from 20-somethings that felt the 50-ish were not pulling their weight and still getting the big bucks to the non-20-somethings that felt the 20-somethings were a bunch of whiners (lazy and narcissistic in nature). There seemed to be a lot of unhappiness. There also seemed to be an undercurrent that all CEO’s were overpaid and should be jailed for theft. The majority opinion was that the up bringing of this particular generation lead them to want and need more positive reinforcement then previous generations. As they grew up, they got pats on the heads for just showing up and don’t understand why it doesn’t continue. My belief is that generalizations tend to not hold water over time.

Most 20-somethings of any generation don’t know what they don’t know. Most fresh-outs don’t even know what a manager does. They don’t appreciate that the manager most likely made the decision to hire them either directly or indirectly by approving the hiring plan. If it weren’t for the management growing the company they would not have a job to complain about.

I also think that it is valid that the entry level positions don’t get recognized for their contribution as much as more senior employees. This is due in part to their newness. The new employees aren’t politically connected because they haven’t established value. Once they start to prove themselves, their stock goes up and they have more value. People start to take notice.

What about this perception that all CEO’s are overpaid? This seemed to be a rally point for both sides. What about the value of non-business people? The minimum income required to make the Top 50 List in sports in 1994 was $5M. In 2004, just ten years later it was $15M. (Celebrities) That’s a 300% increase in 10 years. Payton Manning made $45M at age 28. Shaquille O'Neal made a paltry $32M. Tom Cruise made $45M. The Olsen twins made $28M. Now none of these people contributed to the employment for anyone other then themselves. You might be able to argue that they all have supporting casts, but that is a stretch. The Owners or Producers create those opportunities. None of these celebrities set strategy or budgets, or managed organizational P&L’s. They are individual contributors. All of them are talented, but $45M to play football for one year? No one seems to get to upset over the compensation paid celebrities.

Compare this to the likes of Steven Jobs who made $646M, (the highest paid CEO) but that was all in the capital appreciation from 500M shares of Apple Computer (that’s about $1.30 per share). (CEO) He took no salary. Michael Dell made $154M, with almost $150M coming from his 5,367M shares of Dell Computer. Without the stock appreciation he only got paid $3.7M. The medium income for the top 500 CEO’s in the United States was $5.6M including all incentives. These people are responsible for hiring ten’s of thousands if not hundred’s of thousands of people. They bring wealth to stockholders. Now they may not bring wealth to every stockholder every time, but over time the DOW has continued to rise.

CEO’s are responsible for the employment growth in the United States. They set the pace for their companies. They are held responsible for the stock appreciation that helps not only individual investors but also all of our 401K’s. In most cases they represent products that we can elect not to buy if we feel so inclined. We don’t have to contribute to what we may feel is their disgraceful income. The top 500 CEO earn a medium income less than the top 500 Celebrities.

Are there issues, sure there are. 20-somethings need a break and they need to give one too. None of us needs to paint with that wide brush we so often see in the media. Some CEO’s are doing a great job in very difficult situations. Others are not. Some 50-ish’s are not carrying their weight and need to be replaced. But most employees are trying to live up to expectations. Most do not get as much positive reinforcement as they desire. That goes for managers too.

We are always more anxious to be distinguished for a talent which we do not possess, than to be praised for the fifteen which we do possess. – Mark Twain

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