Last October, there was an article on StarTribune.com, the Web site of the Minneapolis-St. Paul daily, about Ameriprise Financial in Minneapolis having reported a loss of US$70 million for its third quarter. Several readers who posted online comments about the story claimed that the loss had resulted in layoffs and that more were expected. One reader said that the layoffs included "many" technology workers. If that's true, imagine how disgusted those workers would have been if they'd known that their boss was enjoying a compensation package in excess of $6 million.
According to Janco Associates, an IT consulting firm in Utah, the salary of Glen Salow, executive vice president of service delivery and technology at Ameriprise, is $475,000, but financial attaboys have made him a multimillionaire. If that disturbs you, you'll be more disturbed to learn he is hardly unique.
As Computerworld's Patrick Thibodeau reported last week, a recent Janco study found that while IT executives in general are taking a hit because of the economy, some CIOs aren't sharing the pain.
Bob DeRodes recently left his job as CIO at The Home Depot to become chief technology officer at First Data. The offer must have been extremely attractive, given that at Home Depot, he was raking in almost $5.2 million. With a salary of about $700,000, the extras seem fairly generous. Actually, "obscene" is probably a more fitting description, when you consider that the retailer announced in May that it was eliminating 1,300 jobs and closing 15 stores. According to Bloomberg News, Home Depot earlier in the year laid off 500 people from its headquarters and acknowledged that another 1,000 cuts might be made.
Joseph Antonellis, meanwhile, is doing quite well for himself as CIO at State Street Corp. in Boston. According to the Janco report, Antonellis draws a salary of $669,000. You might presume that State Street has been faring pretty well, since Janco says the CIO's total compensation was $6.3 million, nearly 10 times his salary. But you'd be very wrong. Just last month, The Boston Globe reported that State Street plans to cut 1,600 to 1,800 jobs, or 6% of its workforce, through the first quarter of 2009.
There are other examples, but these are certainly enough to make it clear that a question raised by a reader who posted a comment on Thibodeau's story is a fair one.
"Add about 25-30% onto [my salary], for benefits, and that is my 'compensation package,' " the reader wrote. "My 'compensation package' is nowhere near 10 times my salary as these people are getting. How many people have they laid off to maintain that level of compensation?"
Another reader chalked it all up to greed and made no attempt to hide his disgust. "Corporate America really needs to have good leaders," he wrote, "not greedy leaders."
This is where the discussion gets especially interesting. Can these people who accept millions in compensation, knowing that their companies are axing hundreds of jobs as a means of saving money, be considered good leaders?
There's no question in my mind that the ones I've cited are extremely accomplished and have outstanding leadership qualities. I know that because all three have been honored by Computerworld for those very attributes.
It so happens that DeRodes, Salow and Antonellis are Computerworld Premier 100 IT Leaders, from the classes of 2001, 2004 and 2005, respectively. As anyone who has any familiarity with the Premier 100 program knows, its honorees are truly exemplary.
So yes, DeRodes, Salow and Antonellis are indeed good leaders. And I'm confident that the leaders who have reached the highest levels tend to be the ones who worked the hardest, and should be compensated accordingly.
But a system that rewards some so lavishly while so many others are stripped of their means of livelihood is a broken one. It appears it will take even better leaders than the ones we have now to fix it.
This story, "CIOs' pay shows they aren't sharing the pain" was originally published by Computerworld.