Editor’s Note – Steve Gifford, MBA, SPHR, is the Director of Human Resources for Eurpac Service, Inc., a national grocery and retail brokerage. His first HR job was in the US Army during his second tour in Iraq, where every employee in his client group carried an automatic weapon. It helps him keep the problems of retail employees, who show up to work late, in perspective..
I finally got around to reading last month’s Fortune magazine – yes, the dead tree format and everything. It included a long investigative piece on Robert Kelly, the former CEO of BNY Mellon, and the circumstances that led to him being a “former” CEO. The article is here and is similar to pieces that Fortune does every few months on boardroom intrigue.
I have three take-aways from the article.
- Don’t let boardroom drama fool you. Sure, it takes place behind closed doors, among mostly white, mostly older, mostly male professionals. It is still every bit as politically fraught and petty as the best episodes of Jersey Shore or Real Housewives.
- BNY overpaid. They paid Kelly $18 million per year, and he got a $34 million severance package. I live within commuting distance of New York, and was available to be their CEO for 20% of that total package. I’m still available for any Fortune 500 looking for a CEO at the bargain mid-seven-figures range – contact KD for details (and, if you mention this blog post when you call, I’ll even pick up Kinetix’s commission out of my side!)
- Boards of Directors are in the Talent business in a big way. None of them have HR in their titles, and I doubt that any of BNY’s Directors spent much time in an HR department, but time after time in this article, their focus on human capital comes through. Consider:
- The board had identified two potential successors to Kelly and was very concerned when each of them left (one went to Fidelity, and one just left – retention doesn’t look much worse than that).
- The board makes a counteroffer to keep Kelly from going to Bank of America, and ultimately regrets that choice.
- The board sets compensation and bonus targets for the CEO (and presumably other executives).
- “In December 2010 the compensation committee collected its annual written appraisals from the 12 independent directors. Many of the reviews were extremely critical. So in February of this year the board assigned five directors to meet with Kelly and discuss the poor evaluations. The board believed it was sending him a major warning signal.” There’s really no way to read this other than as a write-up.
So, what does this mean for those of us who work several floors down from the board room, in a windowless office that still says “Personnel” on the door? We’ve been doing our HR thing, and we’ve noticed that:
- Everyone in the succession plan is over 55, but no one has ever really looked at that document;
- Five all-star performers from different departments have left for the same competitor in the last two years, and no one read the exit interviews;
- Revenues haven’t gone up in a while, but salespeople are consistently at 100% of their bonus plan.
Yes, you say, you’ve been talking about these things for years, and they get ignored just as surely as your sexual harassment training! This article tells me that someone, somewhere at the very top of the company, is paying attention to the things we pay attention to. How you connect with that person is going to be different in every organization – it may mean that your memo needs to go to someone besides your boss, or it may just mean you make your boss look like a proactive genius. But there are people who care about the things we care about, and they want to know.
Steve Gifford, MBA, SPHR, is the Director of Human Resources for OEM America, a PEO of more than a hundred companies and more than two thousand employees. His company gives small businesses the buying power and HR expertise of a big company, but without the bureaucracy! In the past, he’s been the HR guy for marketing, manufacturing, retail, and government organizations. His first HR job was in the US Army during his second tour in Iraq, where every employee in his client group carried an automatic weapon. It helps him keep the problems of employees who show up to work late in perspective.