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Unions call NWA stock awards 'obscene'
Northwest released its plan for granting equity to its CEO and other top executives. Unions will oppose the plan in court.
By Liz Fedor, Star Tribune
Last update: May 05, 2007 – 9:33 AM
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Doug Steenland, CEO of Northwest Airlines
Check on NWA's stock
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Northwest Airlines revealed Friday that it plans to award CEO Doug Steenland $26.6 million in equity in the restructured airline.
Executive vice presidents Neal Cohen, Tim Griffin, Andy Roberts and Phil Haan would each receive equity grants of between $10 million and $13.5 million.
When Northwest emerges from Chapter 11 bankruptcy protection next month, Steenland is expected to be allocated restricted stock with an estimated value of $20.8 million. In addition, he is set to receive stock options with a valuation of $5.8 million. Both types of awards would vest over four years.
Leaders of Northwest unions, whose members have taken double-digit pay cuts to return the airline to solvency, labeled the stock awards "outrageous" and "obscene."This crew of robber barons used the bankruptcy process to extort the wages of its employees for excessive concessions. Now those executives are enriching themselves to obscene proportions," said Wade Blaufuss, a spokesman for the Northwest branch of the Air Line Pilots Association.
Northwest pilots took two rounds of pay cuts -- of 15 percent and 23.9 percent -- and agreed to other contract changes that are saving the airline more than $600 million per year. "We have pilots and other employees who are going through their own personal bankruptcies," Blaufuss said.
The Friday release of the details on the stock awards for the top five executives came just days before Northwest flight attendants begin voting on a contract that saves $195 million a year. A 15-year flight attendant averages $35,433 a year.
Flight attendants have taken pay and benefit cuts, and they have been working longer hours under imposed terms since last summer.
"For them to announce this now at such an outrageous amount of compensation shows how out of touch they are with their own employees," said Andy Wisbacher, vice president of the attendants union.
"The executives keep talking about retaining executive talent," said Wisbacher, of the Association of Flight Attendants at Northwest. "What they should be worrying about is retaining employees, instead of taking their sacrifices to retain the executives who drove us into bankruptcy."
The attendants will vote on a third tentative agreement from Monday through May 29.
Stephen Gordon, a top official with the International Association of Machinists and Aerospace Workers, said the IAM will join the pilots union in court in opposing the management equity plan. He described the stock allocations as "morally wrong."
The equity plan will be included in Northwest's reorganization plan, which must be confirmed by the bankruptcy court before Northwest can leave Chapter 11. A hearing on the plan is scheduled to begin May 16 in New York.
Northwest, in a statement, cited four reasons for the size of the awards to its executives. The carrier said the awards would allow Northwest to recruit and retain executives, to align compensation with the company's financial performance, to create a market-competitive plan that fairly compensates executives and to compensate CEO Steenland at a level that is competitive with his peers.
Northwest also said that Steenland's award is appropriate in the context of the stock awards given to other airline executives. In a Northwest chart, based on regulatory filings, it showed that Doug Parker, US Airways CEO, held stock worth $40.7 million as of the end of last year. American's Gerard Arpey had equity worth $37.7 million, followed by United CEO Glenn Tilton with $27.1 million and Continental's Larry Kellner at $14.9 million.
US Airways and United also were in bankruptcy in recent years.
Some Northwest employees have noted that Gerald Grinstein, Delta's chief executive, has refused to accept equity in Delta, which left bankruptcy this week.
"Comparisons between the equity compensation of Gerald Grinstein and Doug Steenland are apples and oranges," Mike Becker, Northwest's senior vice president of human resources and labor relations, said in a prepared statement Friday. "Management equity plans are designed to incent and retain executives who will lead the organization in the future.
"Mr. Grinstein has announced his intention to retire from Delta later this year and, as such, declined participation in Delta's equity plan. Northwest's board of directors, on the other hand, wishes to retain Mr. Steenland as Northwest's CEO."
The values Northwest placed on the restricted stock and stock options are based on the projected price of the airline's stock when Northwest leaves bankruptcy.
Liz Fedor • 612-673-7709 • lfedor@startribune.com
Obviously as a leader and the job he was tasked to complete with NWA provides reason for Steenland to receive a handsome pay. However, I question the amount in stock options that he will be due. Sure he can only cash them in at restricted quantities with approval of the board and as Delta has shown airlines recently coming out of bankruptcy have their stock prices fall from the initial "new" IPO, but is this ethical? Personally I would have a hard time, as the union members voice, harshly negotiating pay cuts across all unions only to receive stock options in the millions in addition to a handsome base salary. As a leader I would expect to lead by example as well as in voice. But then again he will probably be gone shortly after NWA's exit from bankruptcy having completed the job he was brought in to do.
Saturday, May 5, 2007
Wednesday, May 2, 2007
The Coach as a Leader
The Coach as a Leaderby Dan Kotaska
When people are asked, "Who is a leader?" many respond by naming politicians, presidents, senators, and governors, military leaders, business leaders, and… successful coaches.
Why are coaches included in this list? Because all coaches are leaders, coaching effectiveness is maximized by understanding how to lead. In a way, the relationship between coaches and players is a contract. Players will follow the coach's wishes or demands and in return they expect their reward, whether that is winning, playing time, positive reinforcement, or some other benefit. With that in mind, a coach has the obligation to find out what each individual's wants and desires are and to get them to believe in the ultimate team goal(s). Here are some guidelines for specific implications of what the coach as a leader should do:
Master and Apply Current Knowledge. Be willing to learn and willing to take the time to understand correct movement mechanics, strategies, and the fundamental principles of sport.
Develop Interpersonal Skills. Develop interpersonal skills especially communication skills. Have a sense of humor but scrap the sarcasm. Players need to feel that they can approach you, if they don't feel that way problems can multiply.
Eliminate all Dehumanizing Language. Treat each person with the dignity and respect that they deserve. Give positive reinforcement rather than negative feedback. Offer solutions when criticism is necessary.
Control Your Emotions. Athletes treat the coach as the role model and will emulate their behavior. If coaches are on the sidelines yelling at officials and throwing chairs, what message is that sending to the players?
Help Athletes Set their own Goals. Goals need to be established as a team and as an individual. Goals should be something that the athletes can actually achieve. Coaches are there to guide athletes in the goal setting process as well as the evaluation of the goals but they are not there to tell the athlete what their goal is or what their goal should be.
Live in the Present. Athletes don't need to be consistently reminded how good your team was last year or in prior years. You may use the past as an example but don't compare your athletes or team to prior years.
Provide Opportunities for Success. Provide good practices, time for game conditions, sensible scheduling and a pleasant atmosphere. The administrative aspects of the job are just as important as any other aspect. Planning, preparation, and budgeting are very important functions. A coach must be a leader, teacher, and an administrator all at once.
Every coach has the ability to lead but it takes work to become a good leader. By following and living by these guidelines, you will be a long way on your path to becoming a good leader.
When people are asked, "Who is a leader?" many respond by naming politicians, presidents, senators, and governors, military leaders, business leaders, and… successful coaches.
Why are coaches included in this list? Because all coaches are leaders, coaching effectiveness is maximized by understanding how to lead. In a way, the relationship between coaches and players is a contract. Players will follow the coach's wishes or demands and in return they expect their reward, whether that is winning, playing time, positive reinforcement, or some other benefit. With that in mind, a coach has the obligation to find out what each individual's wants and desires are and to get them to believe in the ultimate team goal(s). Here are some guidelines for specific implications of what the coach as a leader should do:
Master and Apply Current Knowledge. Be willing to learn and willing to take the time to understand correct movement mechanics, strategies, and the fundamental principles of sport.
Develop Interpersonal Skills. Develop interpersonal skills especially communication skills. Have a sense of humor but scrap the sarcasm. Players need to feel that they can approach you, if they don't feel that way problems can multiply.
Eliminate all Dehumanizing Language. Treat each person with the dignity and respect that they deserve. Give positive reinforcement rather than negative feedback. Offer solutions when criticism is necessary.
Control Your Emotions. Athletes treat the coach as the role model and will emulate their behavior. If coaches are on the sidelines yelling at officials and throwing chairs, what message is that sending to the players?
Help Athletes Set their own Goals. Goals need to be established as a team and as an individual. Goals should be something that the athletes can actually achieve. Coaches are there to guide athletes in the goal setting process as well as the evaluation of the goals but they are not there to tell the athlete what their goal is or what their goal should be.
Live in the Present. Athletes don't need to be consistently reminded how good your team was last year or in prior years. You may use the past as an example but don't compare your athletes or team to prior years.
Provide Opportunities for Success. Provide good practices, time for game conditions, sensible scheduling and a pleasant atmosphere. The administrative aspects of the job are just as important as any other aspect. Planning, preparation, and budgeting are very important functions. A coach must be a leader, teacher, and an administrator all at once.
Every coach has the ability to lead but it takes work to become a good leader. By following and living by these guidelines, you will be a long way on your path to becoming a good leader.
CEOs as public leaders- a Mckinsey Survey
US executives say they should play a much greater role in shaping the debate about sociopolitical issues and in leading efforts to effect change.
The minority who do play such a leadership role are likely to be board members or CEOs, often at privately held companies with annual revenues below $1 billion.
Most of them are motivated primarily by personal reasons and usually act as private citizens.
They say a comprehensive understanding of public issues and a strong network of peers with a similar interest make it easier for them to play a leadership role, while time constraints keep them from playing an even larger role.
http://www.mckinseyquarterly.com/article_abstract.aspx?ar=1909&L2=21&L3=37&srid=246
The minority who do play such a leadership role are likely to be board members or CEOs, often at privately held companies with annual revenues below $1 billion.
Most of them are motivated primarily by personal reasons and usually act as private citizens.
They say a comprehensive understanding of public issues and a strong network of peers with a similar interest make it easier for them to play a leadership role, while time constraints keep them from playing an even larger role.
http://www.mckinseyquarterly.com/article_abstract.aspx?ar=1909&L2=21&L3=37&srid=246
Fostering Innovative Culture
Fortune Magazine hosted an Innovation Forum bringing corporate leaders together to share how they foster an innovative culture.
Gap International, VP, Eric Jackson, talks about driving innovation through a change in thinking patterns.
Ariane de Bonvoisin, CEO of The First 30 Days, talks about the way that comparison and second guessing a decision kills innovation.
A Citigroup CIO discusses hiring the right people to drive innovation.
Enjoy!
http://money.cnn.com/magazines/fortune/innovation/
Gap International, VP, Eric Jackson, talks about driving innovation through a change in thinking patterns.
Ariane de Bonvoisin, CEO of The First 30 Days, talks about the way that comparison and second guessing a decision kills innovation.
A Citigroup CIO discusses hiring the right people to drive innovation.
Enjoy!
http://money.cnn.com/magazines/fortune/innovation/
Leadership in the Virtual Office
In examining corporate and strategic leadership, I wonder how the role of a strategic leader will change with the increasingly virtual workplace. Some of the traditional mythical aspects of leadership may be harder to create in a virtual world. In 20 years, will we even care about charisma or will we be obsessed with how to inspire people through e-mail or a cool avitar.
It also relates to the idea of a corporate culture. How can a virtual company claim to truly have a corporate culture. I have this image of virtual bagels and donuts in Second Life every Friday for all of your virtual employees. There could be a new business concept around the disappearance of the traditional office. Even more retreat centers or the like could look to fill the void in human interaction and create a company culture for the day.
Virtual communication also gives people time to think before they virtually "speak." Many of the bad leadership traits arise when people act rashly. Would there be less bad virtual leaders than we have reality based leaders today?
These are interesting ideas to think about as the idea of corporate leadership evolves over time.
It also relates to the idea of a corporate culture. How can a virtual company claim to truly have a corporate culture. I have this image of virtual bagels and donuts in Second Life every Friday for all of your virtual employees. There could be a new business concept around the disappearance of the traditional office. Even more retreat centers or the like could look to fill the void in human interaction and create a company culture for the day.
Virtual communication also gives people time to think before they virtually "speak." Many of the bad leadership traits arise when people act rashly. Would there be less bad virtual leaders than we have reality based leaders today?
These are interesting ideas to think about as the idea of corporate leadership evolves over time.
True North
Bill George presented at Medtronic today about his thoughts on leadership from his new book "True North." It was a great presentation and sounds like a great book...
Review: 'True North' offers leadership lessons
Posted 4/22/2007 10:23 PM
By Kerry Hannon, Special for USA TODAY
True North has a simple premise for leadership: understand your own life story.
For example, Starbucks' founder Howard Schultz was forever changed at the age of 7 when a broken ankle caused his father to lose his deliveryman job and consequently his family's health insurance and economic security.
"I wanted to build the kind of company my father never had a chance to work for," he says in True North.
Schultz's memories of his father's lost health care led to Starbucks becoming the first U.S. company to provide health insurance for every employee, including those working as few as 20 hours a week.
Bill George, former CEO of Medtronic, and co-writer Peter Sims interviewed 125 executives, ages 23 to 93.
"Your truth is derived from your life story, and only you can determine what it should be," writes George. "When you are aligned with who you are, you find coherence between your life story and your leadership." That alignment is your "true north," an internal compass.
"What emerges from these stories is that virtually all the leaders interviewed found their passion to lead through the uniqueness of their life stories," he writes. "Not by being born as leaders. Not by believing they had the characteristics, traits, or style of a leader. Not by trying to emulate great leaders."
Oprah Winfrey, for example, grew up poor and was molested. At 14, she bore a baby who lived only two weeks. Today, she has a media empire.
"It would have been easy for Winfrey to get caught up in feelings of victimhood. Yet she rose above them by reframing her story in positive terms: first by taking responsibility for her life and then in recognizing her mission to empower others to take responsibility for theirs," he writes.
Winfrey's transformation came in her mid-30s. Often, it takes that long to see "where we fit in the world and help us understand the meaning of those difficult experiences for our personal missions," he writes. George was CEO of Medtronic, a global medical technology company, from 1991 to 2001 and chairman from 1996 to 2002. He, too, had crucibles that "ultimately transformed my approach to leadership."
An only child, he was very close to his mother. He was in his mid-20s when she died suddenly of cancer and a heart attack. Eighteen months later, he was three weeks from being married when his fiancée died suddenly from a brain tumor.
"Her death came as an incredible shock. Once again, I felt all alone in the world." Friends and prayer led him to recovery.
He married not long after and began a corporate career sprint. By 30, he was president of Litton Microwave. He moved on to continue the race at Honeywell.
But one day he admitted this was not how he wanted to spend his life. His unhappiness at work was harming his relationships with his wife, sons and friends.
With such a focus on becoming CEO, "I had lost sight of the purpose of my leadership — to benefit the lives of others." Reflecting on how the support of others pulled him through his personal crises, he was able to make the connection to his life story and transform his approach to leadership.
George contacted Medtronic, whose offers he had three times declined because they had not suited his ambition to lead a large company. Within several months, he became its president.
"To become authentic leaders, we must discard the myth that leadership means having legions of supporters following our direction as we ascend to the pinnacles of power. Only then can we realize that authentic leadership is about empowering others on their journeys," he writes.
This transformation in thinking from "I" to "we" is "the most important process leaders go through in becoming authentic," he writes.
"Only when leaders stop focusing on their personal ego needs are they able to develop other leaders. … They recognize the unlimited potential of empowered leaders working together toward a shared purpose."
Review: 'True North' offers leadership lessons
Posted 4/22/2007 10:23 PM
By Kerry Hannon, Special for USA TODAY
True North has a simple premise for leadership: understand your own life story.
For example, Starbucks' founder Howard Schultz was forever changed at the age of 7 when a broken ankle caused his father to lose his deliveryman job and consequently his family's health insurance and economic security.
"I wanted to build the kind of company my father never had a chance to work for," he says in True North.
Schultz's memories of his father's lost health care led to Starbucks becoming the first U.S. company to provide health insurance for every employee, including those working as few as 20 hours a week.
Bill George, former CEO of Medtronic, and co-writer Peter Sims interviewed 125 executives, ages 23 to 93.
"Your truth is derived from your life story, and only you can determine what it should be," writes George. "When you are aligned with who you are, you find coherence between your life story and your leadership." That alignment is your "true north," an internal compass.
"What emerges from these stories is that virtually all the leaders interviewed found their passion to lead through the uniqueness of their life stories," he writes. "Not by being born as leaders. Not by believing they had the characteristics, traits, or style of a leader. Not by trying to emulate great leaders."
Oprah Winfrey, for example, grew up poor and was molested. At 14, she bore a baby who lived only two weeks. Today, she has a media empire.
"It would have been easy for Winfrey to get caught up in feelings of victimhood. Yet she rose above them by reframing her story in positive terms: first by taking responsibility for her life and then in recognizing her mission to empower others to take responsibility for theirs," he writes.
Winfrey's transformation came in her mid-30s. Often, it takes that long to see "where we fit in the world and help us understand the meaning of those difficult experiences for our personal missions," he writes. George was CEO of Medtronic, a global medical technology company, from 1991 to 2001 and chairman from 1996 to 2002. He, too, had crucibles that "ultimately transformed my approach to leadership."
An only child, he was very close to his mother. He was in his mid-20s when she died suddenly of cancer and a heart attack. Eighteen months later, he was three weeks from being married when his fiancée died suddenly from a brain tumor.
"Her death came as an incredible shock. Once again, I felt all alone in the world." Friends and prayer led him to recovery.
He married not long after and began a corporate career sprint. By 30, he was president of Litton Microwave. He moved on to continue the race at Honeywell.
But one day he admitted this was not how he wanted to spend his life. His unhappiness at work was harming his relationships with his wife, sons and friends.
With such a focus on becoming CEO, "I had lost sight of the purpose of my leadership — to benefit the lives of others." Reflecting on how the support of others pulled him through his personal crises, he was able to make the connection to his life story and transform his approach to leadership.
George contacted Medtronic, whose offers he had three times declined because they had not suited his ambition to lead a large company. Within several months, he became its president.
"To become authentic leaders, we must discard the myth that leadership means having legions of supporters following our direction as we ascend to the pinnacles of power. Only then can we realize that authentic leadership is about empowering others on their journeys," he writes.
This transformation in thinking from "I" to "we" is "the most important process leaders go through in becoming authentic," he writes.
"Only when leaders stop focusing on their personal ego needs are they able to develop other leaders. … They recognize the unlimited potential of empowered leaders working together toward a shared purpose."
Leadership in the Movies
Art often imitates life, so it’s not surprising that over time
Why Movies?
Our students are predominately adults. Those of us in education, training and/or consulting have experienced first-hand the principles of Androgogy, or the study of how adults learn. Adults learn better when: (1) their individual learning needs and styles are met, (2) their previous knowledge and experience are valued and used, (3) they have active mental and physical participation in the learning activity, and (4) there is a focus on the practical applications of the learning (Sheal, 1989).
The Leadership Challenge
One text that provides rich opportunities for movie infusion into the leadership learning process is The Leadership Challenge, 3rd ed. (TLC), by Kouzes and Posner (2002).
From nearly two decades of research, TLC describes five practices essential for effective leadership (Kouzes & Posner, 2002):
Practice #1: MODEL THE WAY
• Find your voice by clarifying your personal values.
• Set the example by aligning actions with shared values.
• Envision the future by imagining exciting and ennobling possibilities
• Enlist others in a common vision by appealing to shared aspirations.
• Search for opportunities by seeking innovative ways to change, grow and improve.
• Experiment and take risks by constantly generating small wins and learning from mistakes.
• Foster collaboration by promoting cooperative goals and building trust.
• Strengthen others by sharing power and discretion.
• Recognize contributions by showing appreciation for individual excellence.
Movies Take the Leadership Challenge
TLC PRACTICE #1: MODEL THE WAY
Movie: Schindler’s List
Oskar Schindler (Liam Neeson) is an empathetic factory owner in Nazi Germany. Schindler intends to give Jews work in his factory, so ultimately he can sneak them out of
TLC PRACTICE #2: INSPIRE A SHARED VISION
Movie: Field of Dreams
Ray (Kevin Costner) has built a baseball field in an
TLC PRACTICE #3: CHALLENGE THE PROCESS
Movie: Remember the Titans
Coach Boone (Denzel Washington), the rookie head coach of the newly integrated high school football team in northern
TLC PRACTICE #4: ENABLE OTHERS TO ACT
Movie: Twelve Angry Men (original version)
One juror (Henry Fonda) in a murder trial tries to help other jurors consider all the facts and avoid making assumptions. He convinces each juror, one by one, to change his vote.
TLC PRACTICE #5: ENCOURAGE THE HEART
Movie: Shawshank Redemption
Andy (Tim Robbins) is serving a life sentence in Shawshank Prison for a murder he did not commit. While there, he has been writing to convince community leaders to send books to improve the library for his fellow inmates. He finally gets money for needed resources.
From Journal of Leadership Education Volume 2, Issue 2 - Winter 2003
Movies offer us so much to learn about leadership and their visual depiction of pseudo-reality make it easy to absorb and remember … so the next time you hit the cinema, think of it as a possible education
References
• Reel Leadership:
Graham, Sincoff, Baker, and Ackermann (2003)
Provides information on how to apply movies to teach the tenets of the groundbreaking leadership research of Kouzes and Posner.
http://www.fhsu.edu/jole/issues/JOLE_2_2.pdf
• Reel Leadership II: Getting Emotional at the Movies
Graham, Ackermann, Maxwell (2004)
Combines the use of film with applied leadership development through emotional intelligence skill building.
Provides an excellent facilitator resource for incorporating movies into leadership development.
http://www.fhsu.edu/jole/issues/JOLE_3_3.pdf
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