Daily Walk of Fame: Corporate Heroes

The Daily Walk of Shame series usually examines things that just aren't right in the world of finance and investing. Today, though, we're replacing the "Shame" with "Fame." Feel free to spread the love in the comments section below.

Today's subject: Last week, I called out cowardly, money-grubbing corporate leaders. But it's not always productive to heap scorn on the ne'er-do-wells of the business world. For a change of pace, let's spotlight a few of the folks doing things right instead.

Why you should be heartened: First, I should probably take a short walk of shame myself. In my zeal to call out gutless "leaders," I accidentally dissed Starbucks (Nasdaq: SBUX  ) CEO Howard Schultz, accusing him of preserving his own pay while his company closed stores and laid off workers. Starbucks quickly let us know that Schultz actually did ask the board of directors to cut his salary in January. This year, it'll drop from around $1.2 million to less than $10,000.

I'd never heard about Schultz's request to reduce his pay, but I'm not too cowardly to admit when I've made a mistake. I wished that more corporate leaders would voluntarily share the pain of tough times with workers and shareholders, and accept responsibility when business goes south. Commendably, Schultz has done just that.

In truth, some corporations do have reasonable leaders who display passion for their jobs, rather than their paychecks. Several CEOs even take modest paychecks during prosperous times:

  • Costco's (Nasdaq: COST  ) CEO Jim Sinegal has always taken reasonable compensation; in 2008, his base salary was $350,000, and his cash bonus was $80,000.
  • Despite his legendary investing skills and vast personal wealth, Berkshire Hathaway's (NYSE: BRK-A  ) Warren Buffett takes a very modest $100,000 per year from his company. He's also been an outspoken critic of outsized executive pay for undersized performance.

Several CEOs have actually taken pay cuts recently because of their companies' lack of performance. My Foolish colleague Selena Maranjian noted voluntary salary cuts at 373 struggling public companies, including Ford (NYSE: F  ) , EMC (NYSE: EMC  ) , and Motorola (NYSE: MOT  ) . Still, that's a small number among the thousands of companies listed on public exchanges. Clearly, such heroic measures by CEOs -- or their boards of directors -- remain few and far between.

What now? Even those of us who consider ourselves capitalists must realize that out-and-out, me-first greed is lousy behavior from both a business and a personal standpoint. Proponents of conscious capitalism, for example, recognize that true leaders serve the enterprise and all its stakeholders, not the other way around. For conscious capitalists, business isn't a war, but a holistic web that can connect companies, workers, suppliers, customers, and shareholders for the betterment of all. And of course, solid, well-run companies with smart, ethical, passionate management are far more likely to succeed over the long haul.

If I missed the news of Howard Schultz's selfless salary cut, who knows what other heroic CEOs or boards have also escaped my notice? That's why I need your help, Fools. Do you know of a company whose management is behaving responsibly and protecting its stakeholders? We've already complained about the cowards; now's the perfect time to celebrate all the members of corporate America who strive to do the right thing. Please let us know about your executive heroes in the comment boxes below.

Berkshire Hathaway, Costco, and Starbucks are Motley Fool Stock Advisor selections. Berkshire Hathaway and Costco are current and Starbucks is a former Motley Fool Inside Value selection. The Fool owns shares of Berkshire Hathaway, Costco, and Starbucks. Try any of our Foolish newsletter services free for 30 days.

Alyce Lomax owns shares of Starbucks. The Fool's mild-mannered disclosure policy always seems to be running toward the nearest phone booth.


Read/Post Comments (3) | Recommend This Article (23)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 28, 2009, at 12:22 AM, TMFBrich wrote:

    Alyce, I'll submit Dan Amos from Aflac.

    Amos adopted "say on pay" proxy resolutions back in 2007, saying:

    "Our shareholders, as owners of the company, have the right to know how executive compensation works…An advisory vote on our compensation report is a helpful avenue for our shareholders to provide feedback on our pay-for-performance compensation philosophy and pay package."

    And last year, he gave up $13 million in compensation:

    http://www.marketwatch.com/story/aflac-aims-to-lead-pack-on-...

    -Brian

  • Report this Comment On October 28, 2009, at 12:37 AM, mountain8 wrote:

    I notice you didn't mention anyone in Banking.

  • Report this Comment On November 05, 2009, at 11:24 PM, CityWealth wrote:

    The real issue is that "performance" is an illusion, the only real reason why any rich person can command such salaries is because of VOLUME and population size. Take 30 billionaires and stick them on an island with all their money, and their money and toys are meaningless.

    It's an artifact of a specialized society and using money is a medium of exchange. Since no business person determines their success, the success is the result of a population spending money and an artifact of being allowing anyone to set any price.

    Setting prices is a political act, and I think we should start seeing money for the political institution that it is with all the BS that has gone over the last 2 years in the markets, money is a political weapon who's acquisition and use has to be controlled.

    The founding fathers attempted to put checks and balances on government, what they didn't forsee totally was the rise of money taking over the government completely and that there needed to bechecks and balances on the distribution of wealth and redistribution by force if necessary, since money determines who sets policy, so money is over-represented in government while the people are not.

    No checks and balances on the acquisition of monetary power is really at the root of almost all of our problems unfortunately.

    Capitalists who deny this are in denial.

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