And nike is replacing ceo john donahoe after a series of missteps that have cut its market share. Nonetheless, over nearly five years in charge, he's earned nearly $104 million, despite the company losing $40 billion worth of value. Another company to lose billions in value is planemaker boeing. Is planemaker boeing. Its recently departed boss, its recently departed boss, dave calhoun, lost his job dave calhoun, lost his job after struggling to deal after struggling to deal effectively with a series effectively with a series of safety incidents, including two fatal accidents. Of safety incidents, including two fatal accidents. Despite that, he got a pay despite that, he got a pay package worth more than package worth more than $30 million as he was leaving. $30 million as he was leaving. This graph marks the change this graph marks the change in ceos, and as you can see, million last year. In ceos, and as you can see, that can sometimes lead that can sometimes lead to a pretty big swing to a pretty big swing in a company's value, in a company's value, as investors express as investors express their confidence or otherwise in the their confidence or otherwise in the individual leading a company. Individual leading a company. For those individuals running for those individuals running an s&p 500 company in the us, an s&p 500 company in the us, the median pay package has been the median pay package has been rising steadily, rising steadily, hitting a record high of $16. 3 hitting a record high of $16. 3 million last year. Shares often make up a big part of the typical award. The top earners were way above that. Hock tan, who runs chipmaker broadcom, got $162 million. Nikesh arora got $151 million at cybersecurity firm i'm proud of the opportunities we've created for them, because there's been huge upward mobility in our company by the very people that started at the bottom i'm one of them and enabled themselves to not only work their way up, but to work their way up and earn more. However much an employee earns, elon musk is hoping to outstrip them all. The founder of the electric carmaker tesla is going through the courts to get the $56 billion package shareholders awarded him. If it comes off, it would be the biggest pay package in us history. As the boss, he's had to make difficult decisions, like at x, where he cut lots ofjobs quite abruptly when he took over. He explained the responsibility to my colleaguejames clayton. I wouldn't say uncaring. You know, the issue is, like, the company's either going to go bankrupt. . . . . If we do not cut. Costs immediately. This is not a caring/uncaring situation. It's like, if the whole ship sinks, _ then nobody's got a job. So what does it take for the ceo to make sure they're doing theirjob properly? what are the skills they need and that are worth so much money? i've been speaking to one top executive coach who works with the likes of microsoft, avon and standard chartered bank. Alisa cohn, welcome to the programme. I just want to begin with this, because one of the most recent eyewatering pay packets that we've noticed totalling eyewatering pay packets that we've noticed totalling more than $110 million, plus the use of a jet to commute has been for the new boss of starbucks. So, how does a company decide what a boss a single individual is actually worth? mostly, it's the board who decides, based on market comps, based on certainly bringing external consultants in, and also getting a little bit of a sense of what this new person could do, you know, for the company. So, in the case of brian niccol being brought into starbucks, i think it's pretty obvious that there's a big hope for him and his ability to turn that company around, which is certainly needed right now. If we stick with starbucks's brian niccoljust for a moment, he's been brought in to try and turn around a company which employs nearly 400,000 people around the world. And he has a host of problems, including products, stores and pricing. So, how does a single individual go about tackling a list of problems like that? a single individual does it because he's the ceo, and what he's able to do, what the ceo is able to do is to certainly set a new strategy. So, that may sound kind of like pieinthesky, but i think it's really important for the ceo to really assess what's going on and to set up a specific game plan to make that turnaround. The second thing the ceo can do is set the culture so, for example, in the case of brian nicoll, him making sure that people are coming back to the office to work together, not in a draconian way, necessarily, but understanding that there is a need to bring people back into the office. I don't agree or disagree with that, but setting the culture and setting the expectations is one example of what he's able to do to turn a large company around with, as you said, 400,000 employees. Alisa, how important is it to the success of a ceo that they understand the culture of a company? so, for example, are inhouse promotions a better bet for the ceo position, as recent events at nestle and nike indicate? what they are able to do is for contacts and they're low to be the lightning rod. That's why it's so hard to be the ceo. That's why it's so hard to be the ceo. I honestly think that the new nike ceo is probably there's a lot of pressure to keep the northstar inside of the company in light of so many different opinions and criticism. Alisa, how important is it to the success of a ceo that they understand the culture of a company? so, for example, are inhouse promotions a better bet for the ceo position, as recent events at nestle and nike indicate? it's such an interesting question because so often, boards want change, so they want to bring in someone from the outside. And when that person doesn't understand the culture, doesn't understand how to work inside of the company, that is in some ways a huge impediment. At the same time, you probably would think somebody who's been internal, for example, at nike and even at disney, they've been internal for a while, and they maybe understand the culture too well and are, in some ways, not the agents of change. So i think as a board, when you're thinking about who the new ceo needs to be, you need to balance the need to do something inside of the culture, to sort of find somebody who can do a good job in working inside of the culture, but also be able to bring the change. What they are able to do is for contacts and they're low to be i honestly think that the new nike ceo is probably the best exemplar of that, in the sense that he obviously was there for 32 years, and then also he had time away, so he brings the sort of external/internal view that would be very useful hopefully will be very useful for nike right now. You coach executives at some of the biggest names, including google, etsy and johnson &johnson. So what are the most important characteristics to be a successful ceo? and can they be taught? can anyone take on being a ceo at one of these major companies? the most important quality that you need to be the ceo is knowing that you will be able to be the ceo. There is a sense of confidence and, you know, healthy ego that you need to bring to the table. The second thing you need to bring to the table is an ability to adapt. So, you've got to be able to assess the situation, make some important decisions and then adapt them as you go. Can that be learned? i think it's an interesting question. I always think about inside and then also outside. You need to develop your own sort of internal state there soon if you will get stuck in corporate america because they don't have the ability to be decisive and exacted adaptive. I always think about inside and outside. You need to develop your own internal state to know that you can handle the pressure, the as i was telling you, there is normall know;e gap as i was telling you, there is normall know thatip as i was telling you, there is normall know that you internal state to know that you can handle the pressure, the difficulty, the spotlight, and difficulty, the spotlight, and you also need to know the you also need to know the external skills around decisiveness and adaptability external skills around decisiveness and adaptability and strategic skills to be able and strategic skills to be able to do a good job in that role. To do a good job in that role. Given all the executives you've given all the executives you've worked with, worked with, what would you say what would you say motivates them? motivates them? is it as simple is it as simple as money for them, as money for them, or is there something or is there something more innate? most ceos that i coach more innate? most ceos that i coach are motivated by knowing are motivated by knowing they can make a difference, they can make a difference, knowing that they can, knowing that they can, you know, turn a company around you know, turn a company around there is normally a huge gap or grow a company even more. Or grow a company even more. Also they're touching also they're touching hundreds of thousands of people's lives hundreds of thousands of people's lives and that matters a lot to them. And that matters a lot to them. And the ceos that i coach and the ceos that i coach really get excited about really get excited about the ability to have an impact the ability to have an impact in the world. In the world. And then, of course, and then, of course, there are trappings that there are trappings that come along with that, come along with that, but they're really but they're really focused on stewardship. Focused on stewardship. Alisa cohn, thank you very alisa cohn, thank you very much forjoining us. Much forjoining us. Thank you very much thank you very much for having me. For having me. As i was telling you, as i was telling you, there is normally a huge gap between what the ceo of a big corporation gets paid and what the average worker gets. So, what impact does that gap have on companies and societies? i've been catching up with a top expert on ceo pay from the washingtonbased progressive think tank the from the washingtonbased progressive think tank, the institute for policy studies. Sarah anderson, welcome to the programme. If we look at the s&p 500, 19 companies paid their bosses more than $50 million last year. And, yes, a lot of that was in shares, but how on earth do these companies come to those numbers? what makes one individual worth so much? this is based on the foolish notion that the person in the corner office is somehow almost singlehandedly responsible for corporate value and that the people on the frontlines in these companies, who might have their actual hands on the product and delivering the service, are worth only a fraction of that. Those extreme gaps between ceo and worker pay, you tend to have lower morale and lower productivity and higher turnover rates. And so it's bad for business. It's not sustainable over the long term. What are the broader impacts for an economy when you have the figureheads of companies such as tesla boss elon musk earning so much i mean, he's still going through the courts to try and get his $56 billion pay package versus the lower pay of key workers such as nurses and teachers? i think runaway ceo pay is bad for our economy, bad for democracy and bad for business. Too much money is being siphoned and extracted from workers who are doing tough jobs at lower levels of the pay scale and funnelled up to the top, to the point where we have so much money concentrated in so few hands that it is a threat to our democracy. It's a threat to pushing for policies. We have not had a raise in the minimum wage in the united states for over a decade. Big, powerful corporate interests have blocked that kind ofjust small, modest steps of progress to having a more equitably shared economy. And it can contribute to people shirking their responsibilities cos they feel like, why should i try that hard when i'm getting such a small reward for the labour that i'm putting into this? a recent bentley university gallup survey found that 82% of americans think it's important to avoid a major pay gap between the ceo and the average worker. And a think tank recently suggested higher tax rates for companies where the gap is too big. Do you think that's the sort of idea that could be a votewinner in the upcoming election? or is it politically too toxic for presidential candidates given they end up dealing with these individuals? pushing for policies to crack down on ceo pay would absolutely be a votewinner. I have spoken to groups in small towns in swing states in four different states now. I would walk into audiences of republicans and expect to get a lot of debating, and i'd be allarmed with my arguments against extreme ceo pay levels, and what i found was enormous common ground. The problem is that big money has huge influence over our political system, and candidates are afraid to rock the boat when it comes to their campaign finance. Not all of them, but every poll is showing that this is a transpartisan issue. Across the political spectrum, people are just fed up. Sarah anderson, thank you very much. Do you think the pressure and the majority of workers have been feeling has made companies and politicians any more inclined to act on executive pay? i inclined to act on executive. A ?. 4' inclined to act on executive a ?. ~. ~' inclined to act on executive a 7. ~. ~ pay? i would like to think so. I'd also like _ pay? i would like to think so. I'd also like to _ pay? i would like to think so. I'd also like to think pay? i would like to think so. I'd also like to think that pay? i would like to think so. I'd also like to think that the | i'd also like to think that the pandemic should have made it so much _ pandemic should have made it so much even pandemic should have made it so much even more obvious that people much even more obvious that people doing some of the lowest paid work in our country are absolutely essential. And yet, as soon absolutely essential. And yet, as soon as the heat was off, companies stopped giving out their companies stopped giving out their little extra hardship pay and went right back down to the rock bottom wages that a lot of the essential companies. I'm still the essential companies. I'm still waiting for it. I thought after still waiting for it. I thought after the 2008 financial crisis. _ after the 2008 financial crisis, the mystique would be gone, crisis, the mystique would be gone, these were not top talents gone, these were not top talents in our economy that were talents in our economy that were responsible for driving our economy off a cliff and resulting in millions of people losing resulting in millions of people losing their houses and their jobs losing their houses and their jobs and _ losing their houses and their jobs. And yet almost immediately, the big banks and other_ immediately, the big banks and other financial firms that were complicit _ other financial firms that were complicit in that national crisis _ complicit in that national crisis turned around and started _ crisis turned around and started giving out big bonuses again started giving out big bonuses again. So, asjust a very deeply again. So, asjust a very deeply entrenched systemic problem and it's going to take public problem and it's going to take public policy to change it. Sarah anderson, thank you very much. All right, thanks. So how does one individual cope with all the weight and responsibilities of running a business? there any numbers of big decisions to make. Hundreds of thousands of staff and their livelihoods, it could end a lot of pressure, but some individuals seem to thrive