You spend years, maybe decades, climbing the corporate ladder. Then one day, it happens. You have been promoted and appointed the “CEO”. At this moment, a lifetime of your dreams, slogging of hard work with many achievements finally come to fruition.
Being a skilled professional, you act calm and as everyone contacts you shower you with congratulatory note and sentiment your feelings overflow and this is the moment you’ve always been looking for. It is your lifetime crowning achievement.
And as the days go by and all the fervor calms down, you start to settle and fit into the role. It feels good it feels right and just like you’ve died and gone to corporate heaven.
Until, one day, it all falls apart. All too soon, you’re yanked off that lofty pedestal and falling further than you ever imagined an ego can fall. And you find yourself desperately wishing you’d never ever heard of those three letters : C - E - O.
May sound overly dramatic but not. And it’s not just about CEOs; it can happen with any big promotion. Just ask chief of BP. He is probably a good man and a good CEO who found himself in the “mother of all no win situations”. It is hard to find anyone in that position could have done better than him and the failure of the system depended on many factors and not him alone to have caused or started the saga. It can start from the drilling equipment supplier, the rig operation, the drilling crew mistakes, the electrical or electronic software controls that should have functioned during the emergency “well kill” when needed, and many other failures which could not be the drag by the CEO. We would love to see all the critics take a stab at it.
And now that BP is dumping its lightening-rod to save its brand and appease the American public, the media will have a field day with Tony’s reported $18 million exit package, 90 percent of which is his 28-year pension, mostly as a senior executive, which accounts for all the figures. He deserves every dollar and cents. And, he’ll be giving up a reported 500,000 share options and up to 2 million shares under a long-term incentive plan that today is worth about $13 million going up in smoke.
Should we feel sorry for CEOs?? They’re adults who are capable of living with their own decisions and actions. That’s how it is and how it should be. That could happen to any CEO who have been in the hot seat for either a while or long enough to get “hotter”. It can be a staff level job or even a promotion to AGM or GM. So, when you get that big promotion, some advice that can save a lot of pain, anguish or disappointment end of the day when failure come in front of your face:
Do not take yourself too seriously and set too high achievement for you may not be able to survive that fall. Self-importance isn’t real. On the contrary, it’s completely subjective, by definition. Never forget that you’re just a male or female, no more, no less and in any organization, you are part of the labour force contributing to the productivity or bottom line except that you sits higher level than others. You bleed and cry, just like everyone else. And what goes up, all too often, comes down in a hurry and you feel the pain much more as it falls from height. The higher the pedestal you set yourself up on, the bigger the fall.
Leading a company is tough and not easy, but it’s also risky business. Most fail either due to poor management foresight ( that is meaning due to your mistake probably ). A few don’t. Either way, there can be huge ups and down, and everything’s magnified if you choose to look at it that way. But that’s entirely up to you whether you want to take the TOP challenge and face with the consequence what may be. If you ask me, and I’m sure Tony would agree, you’ll likely be better off if you just keep your feet planted firmly on the ground and be contended with what you have achieved and take life at ease at some point in time and enjoy what you gain thus far….
BP’s timing seems a little bit of shrewd. The leaking well has been capped in July2010. Had the board brought in a new face too early, it might have attracted mud. Instead, Mr Dudley is well-placed to lead BP out of its hole. On July 27th the firm announced a record loss of $17 billion, the consequence of a one-off charge of $32 billion to clean up the oil spill, compensate its victims and settle fines. The firm will have to sell more than a tenth of its assets to cover this, but it will survive.
Mr Tony H will receive severance pay of a year’s salary (about £1m, or $1.6m) and the right to start drawing from a pension pot conservatively valued at £11m. (He may also become a non-executive director of BP-TNK, which is perhaps the closest BP could get to sending him to Siberia.) This “payment for failure” has prompted outrage: “£12m payoff for Captain Clueless,” fumed a typical headline. This is unfair. Mr Tony has worked at BP for 28 years, most of them successful. At least half of his pension pot was earned before he became chief executive. And the plunge in BP’s share price has wiped out the equity-related part of his pay package as CEO—a significant punishment.
Nonetheless, the story has intensified a necessary debate about how to avoid rewarding bad leadership. The financial crisis revealed that top bankers were fabulously remunerated for doing what turned out to be a lousy job. Some pocketed immense bonuses when they falsely appeared to be doing well, and then kept much of the loot when their firms collapsed. Other industries sometimes pay handsomely for failure, too (see table below ). It is not only business-bashing politicians who find this upsetting. “If I was running things,” growled Warren Buffett, an investor, in January, “if a bank had to go to the government for help, the CEO and his wife would forfeit all their net worth.”
Failed bosses in the west look seldom fired. Instead, they are usually allowed to resign or retire with dignity, and usually with the tons of money thrown at them. This culture of sympathy will be hard to break, not least since most board members are current or former bosses and may feel that “There, but for the grace of God, go I.”
More importantly, ruining bad bosses is a bad idea. Who would want to take a job that came with a serious risk of financial destruction? Whoever did take it would surely manage in a way that minimised the risk of catastrophic failure. That sounds peachy until you remember that capitalism depends on risk-taking. Penalise failure too harshly and you risk creating bureaucrats.
Abolishing all golden parachutes would be foolish. Far better to design them intelligently. They should be generous enough to make a dud boss leave without a fuss or a lawsuit, but no more. BP’s parting gift to Mr Tony H looks about right. Had he been the boss of an American firm, he would surely have walked away with far more. Ken Lewis made Bank of America swallow the toxic Merrill Lynch but still pocketed $125m when he left last year. Bob Nardelli banked $210m in 2007 after a six-year value-destroying reign at Home Depot.
BP’s timing seems a little bit of shrewd. The leaking well has been capped in July2010. Had the board brought in a new face too early, it might have attracted mud. Instead, Mr Dudley is well-placed to lead BP out of its hole. On July 27th the firm announced a record loss of $17 billion, the consequence of a one-off charge of $32 billion to clean up the oil spill, compensate its victims and settle fines. The firm will have to sell more than a tenth of its assets to cover this, but it will survive.
Mr Tony H will receive severance pay of a year’s salary (about £1m, or $1.6m) and the right to start drawing from a pension pot conservatively valued at £11m. (He may also become a non-executive director of BP-TNK, which is perhaps the closest BP could get to sending him to Siberia.) This “payment for failure” has prompted outrage: “£12m payoff for Captain Clueless,” fumed a typical headline. This is unfair. Mr Tony has worked at BP for 28 years, most of them successful. At least half of his pension pot was earned before he became chief executive. And the plunge in BP’s share price has wiped out the equity-related part of his pay package as CEO—a significant punishment.
Nonetheless, the story has intensified a necessary debate about how to avoid rewarding bad leadership. The financial crisis revealed that top bankers were fabulously remunerated for doing what turned out to be a lousy job. Some pocketed immense bonuses when they falsely appeared to be doing well, and then kept much of the loot when their firms collapsed. Other industries sometimes pay handsomely for failure, too (see table below ). It is not only business-bashing politicians who find this upsetting. “If I was running things,” growled Warren Buffett, an investor, in January, “if a bank had to go to the government for help, the CEO and his wife would forfeit all their net worth.”
Failed bosses in the west look seldom fired. Instead, they are usually allowed to resign or retire with dignity, and usually with the tons of money thrown at them. This culture of sympathy will be hard to break, not least since most board members are current or former bosses and may feel that “There, but for the grace of God, go I.”
More importantly, ruining bad bosses is a bad idea. Who would want to take a job that came with a serious risk of financial destruction? Whoever did take it would surely manage in a way that minimised the risk of catastrophic failure. That sounds peachy until you remember that capitalism depends on risk-taking. Penalise failure too harshly and you risk creating bureaucrats.
Abolishing all golden parachutes would be foolish. Far better to design them intelligently. They should be generous enough to make a dud boss leave without a fuss or a lawsuit, but no more. BP’s parting gift to Mr Tony H looks about right. Had he been the boss of an American firm, he would surely have walked away with far more. Ken Lewis made Bank of America swallow the toxic Merrill Lynch but still pocketed $125m when he left last year. Bob Nardelli banked $210m in 2007 after a six-year value-destroying reign at Home Depot.
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