Barra Episode Illustrates Fallout of ‘Leaning In’ Movement
Sheryl Sandberg may have prompted a new conversation across business about “leaning in,” but surely the Facebook COO and champion of female CEOs everywhere didn’t actually mean to create a silly season for gender-policing pundits. There are lessons here for companies that sincerely try to elevate women executives.
February 23 2014 by Dale Buss
The issue of female equality in the corner office, it turns out, remains a powder keg, even as there are more women, and more prominently, more women becoming CEOs. Boards as well as chiefs must continually re-calibrate sensitivities when succession plans include elevating more females to top posts and developing more women executives for prominent roles.
Take what happened this week to Mary Barra and General Motors as an example. The company had to issue a news release defending itself against media pundits’ charges that GM had elevated Barra to CEO – becoming the first automaker in a century of CEOs to name a woman as its chief – only to turn around and discriminate against her in compensation because of her gender.
Here’s how it got to that point: In January, as she took over from Dan Akerson, the company revealed that Barra’s salary and short-term incentive compensation would total $4.4 million. From that, some critics immediately concluded that GM wanted to stick it to her, because her predecessor, Dan Akerson, had been compensated a total of $9 million for his last year at the helm.
So this week, GM had to explain that Barra also is eligible for long-term compensation that could total as much as $10 million additional, or as much as 60 percent higher overall compensation than Akerson actually received. (His total for 2013, by the way, was the last year under which the federal government capped GM executive compensation under terms of the 2009 bailout.)
GM said it was disclosing all of Barra’s compensation ahead of its required proxy filing in April “to correct misperceptions created by comparisons that used only a portion of Barra’s overall compensation.”
Barra already has indicated that she doesn’t foresee a huge boost in profitability this year at GM for a number of reasons, including the financial requirements of straightening out the Opel brand in Europe.
And like any new CEO, of either gender, Barra can’t necessarily expect to make as much as her predecessor because, well, she’s new and unproven just as any male CEO in her position would be. Certainly, based on what she and those who know her have said, Barra herself would have it no other way.
“As a new CEO, Mary’s total compensation is in line with her peer group and properly weighted so that most is at-risk,” GM Chairman Tim Solso said in a statement. “The company’s performance will ultimately determine how much she is paid.”
One lesson for other boards here is that reaping the full benefit of quantum leaps like the one GM took with Barra requires more than just making the leap and standing around to take the credit. Despite more such moves, the issue of the old “glass ceiling” — and whether, even today, corporate men are really allowing corporate women to breach it often enough – remains fraught with perilous “gotcha” complications that also must be anticipated and managed for such transitions to be completely successful.
Otherwise, other companies will run into critics like MarySheila McDonald, who wasn’t satisfied even after GM’s explanation of Barra’s entire compensation package. The associate dean of business at LaSalle University in Philadelphia warned, according to Christian Science Monitor, that the long-term compensation package offered to Barra could be a “smoke screen” to protect the company from a full commitment because her appointment is so unprecedented.
“They can be thinking that they are making this big leap, so are going to wait and see if she can really pull her weight and prove she deserves long-term compensation,” McDonald told the publication. “Would they do that for a man? You wonder.”
Well, yes, Ms. McDonald. It happens every day.