The C.E.O. Who Promised There Would Be No Layoffs

So what I did when I came here is, I didn’t give annual or quarterly guidance. I give three-year guidance. I tell my investors, you should expect to see over the next three years us growing at an average growth rate of this, to this, this range, within average profitability of this, to this, this range. And I’m not going to make other commitments to you. I’m going to run my company. I want to grow revenue, not maximize my profitability.

With so much uncertainty early this year, what gave you the confidence to pledge that there would be no pandemic-related layoffs?

It was the right thing to do. One thing we didn’t need to do at a time like this was to add more fuel to the fire by making our employees insecure, by making them worry about their jobs, as compared to worrying about their health and their family. It was a very easy decision. So we told our people, focus on your health, on your family, and then focus on your clients and your work and stop worrying about your job.

And how has the pandemic affected spending?

The average deposit in every bank account went up because of the stimulus payments, and because people weren’t spending on holidays and theater and travel and that kind of stuff. But now with the fiscal stimulus drying up, I’m actually quite worried about a K-shaped recovery, where those who have it have enough money to spend. And then there are those who are suffering — small businesses, women, minorities, the people who got laid off from service-sector jobs.

Earlier there was a K because of inequality, but a rising tide was lifting all boats. If you think about the last 10 years, even those who got deeply impacted during the prior recession, their lives had begun to improve over this period. Wages had begun to go up. Unemployment had come down. Industries were booming. Restaurants were booming. The service industry was booming. Now it’s not happening that way. So I’m actually quite worried about that.

Given that, how do you square the inequality in this country with what many people say is excessive executive compensation?

I believe you can be paid well, if you do well. But it has to be aligned properly. My pay is very strongly aligned to total shareholder return. So if my investors benefit, I benefit. I’ve got no problem with that. I have a problem if you ignore that and you get paid, and that’s disconnected from those who have invested in you. That, to me, is a deep disconnect. I also have a problem if you don’t do some things with your employee base, that allows them to feel that their lives have been improved. When I originally came here, employee stock ownership in this company was tiny. Today, 70 percent of the employees get some form of stock-based compensation every year.


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