Preface to all posts: in an effort to get me out of a lifelong rut of avoiding humans and events at all costs, some friends are having me spend the weekend at a musical event. I’m driving very extensively and will be largely offline, so I’m putting up some Very Best of Slope posts in my absence. See you Monday morning!
The Joy of Being Overpaid
Throughout my life, there’s typically been one person who decides how much I get paid; me. Since so much of that time has been involved in starting up a small business, oftentimes my salary – – if you want to call it that – – was just minuscule.
I remember quite well in 1993 that I was only able to pay myself $1,000 per month. Let’s just say that was a challenging time.
Even when Prophet was a thriving business with a couple dozen employees, I paid myself a salary which I think most people would consider very conservative. We didn’t have any kind of venture funding, so it’s not like there was all kinds of piles of cash sitting around. Plus, as hard as everyone was working, I believed it would be immoral to pay myself a lot more than anyone else there. Trying to make my equity stage worth as much as I could seemed sufficient compensation.
This all changed quite suddenly when Prophet was bought by Investools. I was no longer the CEO of an independent little company. Now I was an executive at a much larger, and publicly-traded, corporation.
They gave me a multi-hundred thousand dollar salary. They gave me a guaranteed bonus. They gave me stock. All kinds of goodies.
So I was suddenly making more than I had ever made in my life, while at the same time………..having very little to do. The term they have for it around here is “Vesting in Peace.”
Now I realize that, compared to executives at a lot of other public companies, the kind of compensation I was drawing was inconsequential. For me, however, it seemed insane. I was being paid an absurd amount of money to sit around and do whatever I wanted. It’s not that I’m lazy – – I hope you realize that by now – – but I honestly didn’t have a meaningful function anymore.
Of course, this situation couldn’t last forever. By the autumn of 2009, over four years later, there had been a lot of changes at the company (including being bought by Ameritrade), so they were trying to figure out what to do with me. I figured it was time to go, so I said my farewells and went on my way. (As I recall, they generously kept paying me the same insane salary for another half-year as “severance”).
Early on during this bonanza, I remember sitting at one of our retreats – – it was at the Sundance Resort in Utah (where I actually sat next to Robert Redford at breakfast) and was thinking to myself, “This is the life!” I honestly couldn’t believe it. But, more important than that, it occurred to me that for the thousands of people that ultimately found themselves in this rarified position, it’s like we had all this cool collective secret which was (1) we didn’t deserve what we were getting (2) we sure as hell didn’t anyone to catch on and put an end to this awesomeness. It honestly felt like I had finally been let into a cool club, and we were pulling the wool over everyone’s eyes.
So, yeah, it was Impostor Syndrome writ large.
I’ve painted myself into a corner with this post. Perhaps I was prompted to write it after I read about the CEO of PG&E who was paid about $8 million a year to completely wreck her company. That is, of course, a much more extreme version of what I went through, and at least I didn’t blow up Ameritrade during my tenure.
I guess my only conclusion is this: the experience taught me that compensation does not equal value. Because I have often been underpaid in my professional life and, for a while there, I was paid far more than good sense would suggest.
