Harvard blog

CEOs are still paid too much, period.

Flame on!

Am I the only person grossly offended by current executive pay? The Bank of America CEO Kenneth Lewis took home $20 million for the job he did last year. As consolation for the 12,500 people he’ll be laying off nationally, the $1,200 per person he’s pocketing would only have paid their salary for a week or so, so it’s really not that outrageous after all. Besides, reports UNC Professor Tony Plath, it’s really in line with other CEOs of similarly sized companies.

Why is this expected to make sense? My conclusion isn’t that he’s properly paid, it’s that the rest of them are vastly overpaid. And with pay packages like that, they all have tens if not hundreds of millions in the bank. If they’d all reduce their salaries to manageable levels, the averages would be lower, and perhaps some of that money could be returned to the people working their butts off to make the company succeed.

I’ve heard people cry, “But how could they survive on less? They have a lifestyle to maintain!” Uh, huh. You’re saying they’ve made choices that give them a run rate 1,000 times the run rate of an upper class member of society? Poor them. If that’s what they’ve done in their personal life, how many more billions could their companies be taking home with someone who knows fiscal responsibility at the top?

There’s always the argument that he met all his goals and surpassed them. So frickin’ what???? The average person meets their goals at work and their reward is that they don’t get fired at the next round of layoffs. If they exceed their goals, maybe they get a $500 bonus and a 7% raise at their next review.

What does a CEO get? Regardless of their performance, they get the ego blast that comes with the title. And the ego blast—which no doubt extends to the size of their critical biological equipment—only gets bigger if they head up a huge company.

The CEO is being paid a salary (over a million dollars—enough to support a family of four for 20 years at a decent standard of living) to meet their goals. That’s their job: meeting and exceeding their goals. An average employee must work for their money, while CEOs need ten million dollar bonuses to motivate them just to come in and do the job we’re paying them a salary for!

Anyone that unmotivated doesn’t deserve to be heading up a company to begin with. In fact, maybe the CEO job should be the lowest paid job at the company. Then the only job candidates would be people with genuine aptitude, who care about the company and/or the people, and who are deeply motivated wanting the job.

Flame off!

I guess all in all, it’s just me taking out a bunch of frustration on poor, misunderstood CEOs. I just finished reading parts of the GEO-3 report which reports that we have about 1.2 billion people who don’t get enough fresh waster to survive, and 2.7 billion who wallow in their own garbage for lack of adequate sanitation facilities, living on less than $1/day.

Rather than funneling resources to these people, we give them to CEOs whose only possible use for an incremental dozen million is to platinum plate their already gold-plated toilet seat.

Rather than promoting business practices that keep people employed and attempt to create a prosperous society, we’ve adopted a virtual religion of funneling productivity savings into the pockets of executives. Sadly, layoffs seem a de riguer part of productivity improvements, these days.

If we’re getting more productive, we could use that productivity to make everyone’s lives better. But we don’t. Rather than applying the extra money to shortening work hours, improving quality of life, or restoring our environment or the healthfulness of our food, we leave many people jobless, overwork others, and give the profits out as bonuses and option grants to executives.

Someone, somewhere, has to be the one to stand up and change the system. And it isn’t going to happen until one of those CEOs actually says “No, thank you, I have enough.” to their next over-the-top pay package. And keep in mind that “over-the-top” probably applies to salaries as “small” as $500,000/year (a mere 10 times what many people are using to support a family of four).

It isn’t going to happen as long as we judge the reasonableness of wealth distribution using Plath’s logic, which basically says that the way we (over)pay now justifies continuing the trend.

And since I’m not a grossly, obscenely overpaid executive, I can’t stand up and make that change. But I promise: if I’m ever a senior executive in a large company, I’ll refuse an obscene pay package and return the money to the people who made it, rather than laying them off to improve my bottom line. Or at least, I’m pretty sure I’ll do that. Well, I promise to do it after I have a safe $10 million in the bank. Or maybe $15 million. After all, a person has to keep a little saved away for a rainy day…

Why do we keep a sex offender’s registry?

It’s time to renew my driver’s license, and the form that came in the mail had a big black banner proclaiming that all sex offenders must remember to register with the local police department. Am I the only person who wonders about this?

Now, I’m no fan of sex offenders. In fact, criminals of all kinds make me a bit uncomfortable. Violent muggers leave a bad taste in my mouth, and drug-crazed murderers are distinctly not invited for brunch. But isn’t a pretty crucial part of our justice system the notion that once you’ve served your time, you have another chance to prove yourself?

Apparently not, so I’m in favor of registering everybody who’s ever been arrested for anything. In fact, let’s publish it in Excel. Using the convenient “Autofilter” capabilities, it would be a snap to sort by the type of crime. Since there are always a few who fall back to their wicked ways, you might be able to find good contacts to score some recreational drugs. Or you could sort by street address and send anonymous letters to serial killers, addressed from Jesus, to see if you can spark them on another rampage. The possibilites are endless!

I’m rushing to City Hall now to find out what it will take to get a referendum on the ballot.

Whoever thought a driver’s license renewal notice would spark social reform?

Why does voicemail think we’re stupid?

I’ve been having problems with my phone system and am looking for a voicemail systems that lets me receive voice and fax messages by email, web, or phone. I’ve been trying different services and marveling at how uniformly they present a lousy experience for the caller.

The best I’ve found so far is one I’ve been trying for the last few days. Here’s how it sounds to get my voicemail:

My voice: “Hi, This is Stever. Please leave a message.”
Pleasant voice cuts in: “To leave a message, press 1. To leave a fax, press the send button on the fax machine. To end this call, hang up.”

If you then wait, assuming you can leave a voicemail by waiting, instead it goes right into a FAX receive and starts squealing in your ear.

If you press 1 to leave a voice message, you hear:
Pleasant voice: “Begin recording after the tone. When finished, hang up or press pound for more options.”

Now let’s think about this for a moment.

First off, the prompts are dumb. Anyone calling me can tell the difference between me and voicemail. If not, I want to know! After all, if my voicemail system seems more alive than I do, my therapist should give me a refund. So let’s not tell people to press 1 to leave a message. Let’s just give them a beep. If they don’t know the beep means “start speaking,” they probably aren’t someone I want to talk to. After all, as a liberal elitist New England intellectual, I have my standards.

Astonishingly enough, four out of five of my callers also know that to end a call, they can hang up. Yet the system feels obliged to mention this twice. Did the founder have an early life tragedy, where a beloved Aunt starved to death on the phone, not able to figure out how to end the call? If so, maybe they should donate 10% of MaxEmail’s profits to education. Fix the problem at the source… that’s my motto!

Remember mechanical answering machines? By the early 90s, no one said “leave a message at the tone any more.” In fact, “You know what to do!” followed by the beep worked quite nicely.

Somehow, when voicemail come into being, the creators decided we’d all turned stupid. Wrong-o. We know how to speak after the tone. And if anything’s stupid, it’s a machine that requires me to press 1 so it can tell the difference between a fax tone and a human being; I can buy a $5 plastic doo-hicky at Radio Shack that can do that!

If you know of a voicemail system that takes phone and fax messages, delivers them via phone and email, and lets me have a short, simple recording, please let me know. It should be child’s play for a company that understanding how people use their system.

What’s with UPS “Brown” anyway?

A friend of mine in high school spiked his hair and wanted to be known as “Spike.” But that phase passed, and eventually the haircut became exactly that: a haircut. Now, we think of him as a person, not a hairstyle.

When it comes to building a brand, it’s the person behind the hairstyle that matters. A brand stands for something. Coke stands for cola-flavored soft drinks. WalMart is low-priced superstore. Nike is about professional-quality athletic performance. Staples is trying to build a brand around making your office supply experience easy.

Along with the meaning they want to give a brand, companies choose a look and feel that stays the same and makes it easy to identify the brand. Coke’s classic bottle shape and it’s red logo, swoosh, and typeface all identify the brand. WalMart’s logo, font, and star do it. And who could forget the garish red, STAPLES logo with the L that looks like a bent staple?

UPS, however, is revolutionizing the brand world. They have a logo, and it’s brown. So they’re building their brand all around … yes, the color of their logo, trucks, and uniforms. They seem to have confused the symbol with what it stands for, and assume that the color will somehow convey something about the product benefits or what it does. I don’t know what you think, but here in my household, it just ain’t working.

To this day, I think the strongest brand in the shipping industry was Federal Express’s original slogan: When it Absolutely, Positively Has to Be There Overnight. Boy, did that etch itself into my brain. I knew who they were, and what they did: speedy delivery guaranteed. These days, if they even have a slogan any more, it’s watered down beyond belief. I think it was “The World on Time” for a while, but that was about as inspiring as beige. Maybe they’ll soon realize their greatest asset is the recognizable red-white-and-blue envelope, and rename themselves, “Flag-colored.” It could combine patriotism (sure to be a hit overseas) with a new, 21st century color-based brand. It’s a thought…

Saddam Hussein had nothing to do with 9/11

“The art of leadership … consists in consolidating the attention of the people against a single adversary and taking care that nothing will split up that attention…. The leader of genius must have the ability to make different opponents appear as if they belonged to one category.” — Adolf Hitler (1889–1945), German dictator. Mein Kampf, vol. 1, ch. 3 (1925).

In some clips from yesterday’s Senate debate on The Daily Show last night, several Senators were giving testimony that repeatedly made it sound like 9/11 and Saddam Hussein were linked. Give it a rest, people. The two had nothing to do with each other. Even George Bush says there was no link.

Oh, and by the way, the other featured event on the Daily Show is that apparently the White House created fake news reports supporting the Medicare bill and distributed them to TV stations as if they were real. I’m hoping it was a fake story, but it’s a sad commentary that I can easily believe it. Shudder

Scientific data suppressed for dogma?

As a graduate of MIT and Harvard Business Schools, two institutions noted for doing empirical, statistically-valid research in their areas, I like the idea of data. Science is cool. You can actually tell things about the way the world works. This isn’t the same thing at all as believing how the world works, however.

Beliefs are nothing more than things we don’t question. When things fit our beliefs, they feel familiar. When they feel familiar, we feel safe and secure. Beliefs don’t affect the underlying reality one iota, though they certainly affect our behavior (and possibly our health, but that’s for the placebo researchers to document).

You see, the cool thing about science is that although it has its share of politics, it’s about finding out how the world works, independent of our beliefs. We can believe the world is flat. We can believe heavy objects fall faster than light objects. Scientists can point out that the empirical, measurable, repeatable observations are not consistent with our beliefs. We can then change our beliefs or hang the scientists. Hanging the scientists has, until the latter 20th century, often been the popular choice.

And now, it seems it’s happening again. Yesterday, the Union of Concerned Scientists—a decades-old MIT-founded society with 100,000 members concerned with seeing scientific data used properly in policy—released a report.

Policy-makers generally start with facts and then argue about how to best respond to those facts. For example, let’s say that a study shows that bussing promotes racial integration as measured by the racial diversity of a schoolchild’s friends. We can argue about whether we want our children bussed around, but it’s important to have that argument with our hands on whatever data we have that we can use to understand the implications of our policies. (By the way, this is a made-up example. I have no idea about bussing whatsoever.)

The UCS’s document, heavily footnoted with all references and supporting sources included, concludes that the Bush Administration has been suppressing the data before it even makes it to conversation. That’s extra-bad, because without the data, intelligent policy can’t be made by anyone on any of the related topics. (Not to mention that we look like fools to the rest of the first world, whose scientists aren’t suppressed by the government.)

One example:

The document says the CDC (Center for Disease Control’s) website used to mention several studies that show abstinance-based sex education simply doesn’t reduce teenage pregnancy or sex. No matter how much people want to believe it does, it doesn’t. In fact, studies show regular sex education may reduce or delay teens becoming sexual, while abstinance-based education may be linked to higher rates of teenage male sexuality. After the Bush administration took over, the CDC, the Govt’s supposedly trustworthy source for medical information, replaced its content with a vague discussion of epistemology talking about how condoms don’t work all that well. No mention of studies, science, or any of that unpleasant fact-based stuff.

It’s scary. Very scary. So scary that the people I’ve told all have the same reaction: “Nonsense. That couldn’t happen in America. Surely someone would have publicized it by now.” Well, Ladies and Gentlemen, no one has. Until now, and it’s barely getting a mention in the press.

Go read the document for yourself. Tell your friends. If science is suppressed, if the proper use of facts is suppressed, then democracy suffers. Please take the time to spread the word.

Think twice before buying “activation required” software

Microsoft has certainly endorsed a dangerous trend: software that requires activation to install and run it. More and more, it’s not enough that you purchase software and install it with a serial number they give you; you must also be connected to the internet or call their telephone activation center to activate the software when you run it.

The reason for this is simple: the software publishers basically don’t trust their users, and want to monitor every installation of the software closely. It makes sense from their point of view, as long as you assume your users are out to screw you. But from our point of view, this trend is dangerous.

The first of these activation schemes was Adobe Corporation’s “Type on Call.” They would sell you a CD full of fonts, and you would call Adobe to “unlock” fonts you had purchased.

Over the years, I purchased over $2,000 worth of fonts from Adobe. That really isn’t as many as it seems, as some of the nicer faces cost upwards of $500 to purchase all the different weights and styles. My corporate identity was built using the Adobe fonts.

Then a couple of years ago, I bought a new computer. I went to install my Type-on-Call fonts and discovered that the activation servers had been shut down. Adobe had decided to discontinue the service, and suddenly I was no longer able to access fonts I’d paid dearly for. No one at Adobe was able to help, until bombarding the upper management with letters led one marketing manager sent me a CD-ROM of the fonts in question.

Herein lies the danger: in the interests of their fraud protection, you are integrating the business fortunes and decisions of the software vendor into your infrastructure. If they go out of business, get acquired, or just decide to stop supporting their service, the next time you need to install their software, you can’t do it. If that software is critical to your business, you’re just plain out of luck.

And even if they’re still in business, it’s still a business burden for you. You won’t always have a net connection when setting up a new machine. Sometimes–for security reasons or otherwise–you might want to install your software with your new machine disconnected from the network. Whatever the case, you’ll now have to jump through activation hoops. Windows already takes way too long to reinstall, thanks to its convoluted architecture. If you have to make activation phone calls and convince the $3.95/hour clerk on the other end that you own the software you’ve already bought and paid for, you’re spending more of your time and money just to satisfy their paranoia.

Of course, no company would ever use this as a technique for forcing you to upgrade. Microsoft, for example, would never abuse their activation system by dropping activation of old products, forcing you to upgrade. But if a Microsoft doobie reads this article, watch out, they just may change their mind.

Some of the best software I’ve ever used (and continue to use) has been discontinued over time. If it had required activation, I’d be out of luck, forced to use inferior software. Some great software has started requiring activation, so I’m sticking with the last version I could install at will:

• Windows 2000. XP is nice, but requires activation.
• Macromedia Dreamweaver MX. MX 2004 is nice, but requires activation.
• AdSubtract Pro 2.55. AdSubtract Pro 3 is nice, but requires activation.

Anyone have anything else to add to the list? It’s a sorry state of affairs when vendors so callously disregard the business integrity of their customer, but as a customer, be wise and pressure vendors to sell us software that works the way our businesses require.

Put your trust in technology and you’ll enjoy an interesting life

Well. Isn’t that special? It seems someone put our home voice line into a fax database somewhere. Though unsolicited faxes are illegal, we’ve been awakened virtually every morning for the last several months by a happy ringing and fax machine trying to send us a 5 a.m. fax. Finally, I had call forwarding installed on the line. Now, when a fax comes in, I forward the phone to my work fax so at least I can receive the fax and call up to have myself removed from their database.

Most are for mortgages, leading me to think it may have been a bank or mortgage company that accidentally put our voice number into a fax field.

Interestingly, we have a system where a number can be put into a database and spread far and wide, but there’s no way to get the number back out of the database. Individual merchants may let us opt out of their fax database, but there’s no mechanism for complete removal.

This is a serious problem. The current systems and laws may take different positions about whether one should opt-out or opt-in, but all of them assume the number on a fax call list is, indeed, a fax. There’s no mechanism for correcting these mistakes.

Similarly, as we trust our lives more and more to databases compiled by $3.50/hour clerks in huge data warehouses, we’re happily giving up our privacy on dozens of levels. “So what,” you cry, “I have nothing to hide anyway.” And well you may not. But has it ever occurred to you that that isn’t the issue you should be worrying about?

The deeper issue is that there are no controls on these databases. You can’t find out what databases exist. You can’t find out who controls them or who can access them. Does your mortgage company outsource customer service to India? If so, do you know the laws on privacy and theft of information in India? Probably not. But even if a company swears up and down they’re secure, if you were a $8,000/year worker with the chance to pull in a hundred grand by selling ten thousand valid credit card on the black market in a country where it’s not a crime… well … once the information’s out there, it’s hard to get it back.

Even worse, our court systems are more and more accepting records, paper trails, and databases as evidence. Phone records are used to trace who was calling whom where, with no real examination of whether those records could be easily forged or tampered with. What if someone with a grudge (or just someone gleefully malicious) forges an entry on your record that could incriminate you for a crime? You have no way of examining your records and no way of correcting them.

So in short, we’re quickly becoming the victims of our own technology. We’ve made it easy to create and compile data in vast quantities, while deploying it within a system where there is great economic incentive to exploit the data, and very little incentive to make sure it’s not misused.

What can you do? Probably nothing. We trust technology to save us and it often disappoints. So don’t bother worrying about your lost privacy, or your inability to protect yourself from corrupted databases; worry instead about handing over the integrity of our democracy to electronic voting. See this article and this one for the barest touch of the discussion on why e-voting (which can never be made secure short of having a parallel pencil and paper record) is one of the worst threats to our Democracy around today.

Ain’t technology wonderful?

For Goodness Sake, Use Precautions!
Another email virus trashes the net. We’re surprised?

Wow. The internet is once again being crippled by a ho hum computer virus. And surprise, surprise–it spreads via the Microsoft Outlook address book and by people clicking on attachments without know what they are. Can we have a little more Hollywood formula tragedy, please?

C’mon people. It’s 2004. Face it: Outlook is a piece of non-security crap and has been since its inception seven years ago. It’s always been the biggest security hole in Windows (other than Internet Explorer), and its open-API address book has been used by just about every email virus to propagate far and wide. I know one company that lost about $400,000 due to two Outlook-spread viruses. They still use Outlook! What’s up with that?

Furthermore, if you know anyone who still clicks on attachments trustingly, please tell them to stop. It requires a driving test to get behind the wheel of a car. Perhaps we shouldn’t let people click a mouse without answering a multiple-choice test about some basic computer smarts.

Now Microsoft could take steps to protect us. They could stop allowing people to embed random programs in the middle of web pages and email messages. They could launch attachments in a “sandbox” where the attachment wouldn’t be allowed to muck with the rest of your system. They could even ship Windows with its security turned on instead of turned off, by default.

But they don’t do this. I don’t know why not, but they don’t. So it’s up to us. Practice safe computing, my friends:

• Never, ever use Outlook. Just don’t do it. Use Eudora or Opera for email. If you must use Outlook, at least don’t store your address book there.
• Don’t open attachments unless you know what they are and are expecting the attachment.
• If you’re a techie, check out “Tiny Personal Firewall,” which gives you the sandbox around your programs I mention above.
• Don’t open attachments unless you know what they are and are expecting the attachment.
• Use an outbound firewall (e.g. ZoneAlarm at www.zonelabs.com) so if something invades your system, you’ll know it when the something tries to dial back out to the net.
• Did I mention? Don’t open attachments.
• Back up your system regularly to something write-only. That means a CD-R, folks–something no virus can destroy. I recommend Retrospect Backup software set to do a daily incremental backup of your critical data files.

Above all, compute safely!