Written by John Spencer | 11 January 2012

There is much talk at the moment, in the media, of the ‘bonus culture’. In particular it’s being said that it’s wrong to pay large bonuses to a few individuals when the majority don’t share in the distributions. It’s also said that it’s wrong to pay bonuses to those who haven’t added value to their companies; indeed in many cases paying bonuses to those who drove them to the wall. The banking crisis highlighted these cases, but it’s a phenomenon not restricted to banking.

What doesn’t seem to be getting as much air-time, column inches or webspace is the lack of sense of ownership which actually underpins this phenomenon. If that could be robustly addressed much of this issue could be reversed.

In essence, what is lacking is a sense of ownership of the companies that executives work for. Headhunted to take executive positions, many senior people take the job with no other sense of involvement than their remuneration package. What is my salary? Pension? Benefits? And bonus of course. And what do I have to do to earn all that? Well.......just be there. Succeed? Well, that would be nice but if I don’t succeed so what – I get my package anyway.

Perhaps the clearest feature of this phenomenon is that when taking a job it is now a feature of the initial interviews and discussions to negotiate the EXIT package. When the time comes what will I get as a Golden Goodbye? As my pension? How many years’ salary do I get when I walk away? And ensuring that that exit package is contractual whatever disaster the executive might cause in his time at the company.

It’s not popular to talk about returning to the values of the Victorian Mill owners  - there was great exploitation, greed, and the Victorian times were great to live in for only a very few. But one image might be worth preserving; those Mills, and most businesses of the time, were family businesses. Whether your family flourished and thrived depended on running the business successfully. It was – literally – your money and you protected it with effort, application and drive. There was no exit strategy because there was no exit.

Families do, for the most part, run global businesses anymore and ‘gun for hire’ executives are probably here to stay. But we need to encourage and reward a culture of ‘sense of ownership’, we need to explore reward packages that force executives to fight for their survival depending on results. Indeed, perhaps punish – financially for the most part – lack of application and effort and success.

We need to make the rewards worth fighting for, and not a right given for just occupying a chair.