145. What is excellent leadership worth?

Or maybe the better question is "what *isn't* good leadership worth?"

 

SCRIPT

Way back in episode 54 I wondered about how we could possibly know how much to pay a CEO if we don’t know their compensation floor. In other words, if we don’t know how low a CEO’s pay can go before they will quit, or at least start to under-perform, then we are missing a critical variable to understanding the range of executive compensation that we have to work with. Well, there’s another equally important question: what is excellent leadership worth? Or maybe an even better question would be what ISN’T excellent leadership worth? Sure, senior executives – CEOs especially – tend to make an eye-watering amount of money. And obviously there are a tonne of philosophical, social, economic and moral questions that are important to examine in terms of whether extremely high compensation is good or bad for the world overall. But in the context of a specific organization, and taken in isolation from other intersecting factors, let’s ask the question: what ISN’T excellent leadership worth? Whether you’re a tiny, cash-starved local organization or a massive multinational, what wouldn’t you pay to get the *perfect* leader? Not that you should irrationally pay more than you need to, of course, but I meet organizations that are, in my opinion, unnecessarily anxious about paying too much for great leadership. In my experience, though, it’s a lot easier to find more money than it is to find an excellent leader, regardless of the organization.