You may have read that an employee at Wells Fargo, Tyrel Oates, sent an email to his CEO and copied the majority of his co-workers (200,000 of his work besties). He eloquently requested that they all receive a $10,000 raise. One of the strongest arguments for said raise was that this would allow Wells Fargo to be a compensation leader in their industry and maybe turn the tide on the executive pay phenomenon.
WHAT? Seriously?
Ok, let's back up a bit. I think most of us are in agreement that CEOs are overpaid, to varying degrees. (The executives I know and work with bust their a$$ and deal with a crazy stress level that I never would welcome into my life. It's not a job most of us aspire to so we do need to keep that fact in mind). I could write a post (or several) about executive compensation, but let's save that juiciness for another day.
What makes me scrunch up my face in quizzical disapproval is the request: Please give everyone a $10,000 raise. Is he making out his wish list for Santa? Does he know that even though the retailers in this country want you to think Christmas is right around the corner it is actually months away?
While the letter was professionally written, he makes a weak business case for a blanket raise, citingminimal reasons to do so. What doesn't sit well with me is that he asks for everyone to receive the same amount. I don't know about you, but I don't want the slacker sitting next to me getting a raise just because. Must be the HR lady in me. What about pay for performance? What about putting some cold hard cash behind a motivating bonus program and rewarding top performers, at all levels, to retain talented employees in a competitive labor market? How about taking the company on a vacation, because experience is lasting and it would encourage employee bonding and employee engagement is higher when we feel like we work with our friends? No, just dole out money like grandma won the lottery. How is that a good business model?
This is a conversation we need to have. The pay inequity is just going to get more extreme. But much of it is supply and demand (remember Econ 101? Nah, me neither). I was sitting on a plane earlier this week talking to a consultant for Exxon (well mostly he was talking and I was a captive audience 40,000 feet in the air). He was telling me he lost $150,000 in the stock market in the last month alone. Yup, I agree, that sucks. I aspire to have $150,000 to lose, but that tidbit gave me a peek inside his world. He then provides me with an unexpected economics refresher as he continued to (over) share that he turned down a contract because they only wanted to pay him $27,000 a month and he felt they were "shorting" him on the living allowance because they only offered $3,000. But, he is in a high demand industry in a position very few are well qualified for. Supply and demand, baby! How can you argue with that? In fact, according to my new friend, they had no takers and were now upping the value of the contract. He was going to chew on that. Maybe we should too.
So, let's thank Tyrel Oates at Wells Fargo for his thoughtful, well written letter and the dialogue that will ensue. Let's give him the benefit of the doubt that he sent that email to shine the light on what is possible for all of us (and not to cash in his 15 minutes of fame chip). He seems like a smarty-pants. Maybe he will go on to be CEO one day and show us how we can do better. You know that is what it is going to take: the next generation insisting on "fair" pay for all to change the status quo. That is always what it takes.