The problem with executive comp: Employees are paid too little

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Top executives get paid too much, corporate consultant says.

"The problem may not be that executives are paid too much, but that employees are paid too little," writes corporate consultant in Donald P. Delves in the most recent issue of Directors and Boards, a trade magazine that focuses on corporate board governance.

In his column, Delves credits a reporter for prompting him to think about why so many people complain about executive compensation, when, in fact, there are increasingly more trends that link pay to performance. That's all well and good, the reporter said to Delves, but what about the regular worker whose pay has not increased in real terms for decades?

Delves said he didn't mean that everyone should get a big raise. But, he said, companies put so much thought into how to compensate the top dozen executives that they haven't turned enough attention to the rest of the group.

"What if we used some of that talent and creativity to design incentive programs for all employees? What if the board focused a portion of its time on making sure the company was getting the best out of all employees and giving them the opportunity to contribute and share in the gains?"

I think he's on to something. Of course everyone would like more money, but the opportunity to contribute matters as well. How many times do employees make suggestions, offer to help and try to participate, only to be told, subtly or not so that they can participate by doing their jobs.

What a waste.

"It is not just senior executives," Delves wrote,  "who have natural business abilities, entrepreneurial spirit and the ability to think and make productive decisions."

Delves is the president of the Delves Group, based in Chicago.  Thanks to the editor of Boards and Directors, Jim Kristie, for sending me a link to Delves' article. Congratulations to him on his 32d year with the magazine.

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