'CEO's don't run popularity contests, they take tough calls'. A rightful statement by Citi Group's master CEO, Vikram Pandit. True, executive directors of any business or non-profit or not for profit business organizations, are (or rather should be) more like army generals leading their troops into the battle for a strike. An executive director is chiefly a senior manager of a company, business firm corporation of non-profit (not-for-profit) organization and is responsible for the day-to-day execution, management and planning of the organization.
Subsidiaries, joint ventures, regional and off shore offices, enterprises and other such corporate initiatives can also have executive directors. There are several terms which are synonymous to the post of executive director, such as regional director, off shore directors, Chief Executive officers, Chairman, General Manager and in some cases, in commonwealth nations, Managing Directors.
It must be noted that the executive director is not necessarily the major shareholder or the owner of the company. He also may be a veteran manager or a business genius, or a really, really clever management expert. On the whole, an executive director can be any person appointed by the owners of the business or the shareholders and stock holders of the company, or the board of directors. The executive director's salary by default is very high.
It must be noted that in countries like the United States, charitable and non-governmental organizations which are engaged in not-for-profit/non-profit activities, officially have an executive director as their Commander-in-Chief.
Details about Executive Director Salary
Now the salary of an executive director can range from a few thousand dollars to millions of dollars, with several executive directors having made to the Forbes and Fortune 500 lists. For the sake of argument though in this article, we have included the average salary of the executive directors. Here are some details:
- As per some prominent surveys, the basic pay scale of an executive director extends from $44,839 to $166,767, with a large chunk of these people in the class of $74,000 to $76,000.
- Executive directors also get a bonus which according to surveys tends to extend from $1,000 to a $50,000, depending upon several aspects such as performance and growth and development of the organization.
- A similar range for the profit-sharing has also been observed.
- On the whole, the 'executive compensation and pay' includes a salary, also known as the basic pay, bonuses such as short-term incentives, long-term incentive plans, employee benefits, perquisites and other things such as insurance plans and health plans.
It must be noted that in accordance with the legal systems of the state and nations in which the company is operating, the non-basic elements of the salary tend to differ. For example, it is a common world-wide norm that the non-basic elements of the salary of an executive director cannot exceed a specified percentage of net or gross profit.
In fact such a limit is often imposed by the legal system and corporate laws. Anyhow, the comprehensive executive director's salary can amount to an average range of $43,571 - $197,118. Though at times, you will have directors who are ranked among the richest people in the world. This is often seen due to the fact that the companies give their executive directors substantial non salary benefits such as share holding, sweat equity, etc.
The Big Shots
The Forbes and Fortune 500, makes surveys of some of the best executive directors and Chief Executive Officers, here are some personal favorites:
- Larry Ellison, the CEO of American company has been estimated to be the current, highest paid CEO at a cool $84.5 million salary. A person who has been highly instrumental in taking the software company through the tough recession. Well a job well done on his part as the company not only did good in the recession but at the same time conducted well certified takeovers.
- Vikram Pandit of Citi is yet another example of a CEO who charged at the infamous recession, with his Citi cavalry. The result was the company, has regained the well-respected status of a financial institute and a bank, rather than being loan and financial instrument wholesale shop cum junk yard. The company has not only paid off substantial portion of the bailout and is cruising down the success-way.
- Richard Kinder, of Kinder Morgan is not just known for being a business genius, a Top Gun, in the eyes of many, but also for benevolence he shows for his own company, its employees, investors and other creditors. He did opt for a One-dollar salary in 2008 in the difficult times.
- Larry Page, of Google, included in all lists of business people, CEO's, managers and leaders. The genius of Larry Page and Google's immense contribution to the World Wide Web have made Google an industry in itself so much so that it is referred to with a verb of its own 'Google it'.
- Ratan Tata, of TATA group, the benevolent Godfather of the Indian and Asian economic sphere. He is included in this miniature list because of several, the prominent reasons being that he lead the company to design and produce the cheapest car in the world, acquired some of the oldest automotive manufacturers in the world and put the company in the list of the largest steel producers. Need I say more?
Becoming an executive director is a great ambition, and you know what, any person can do it. Some executive directors in today's industry didn't even complete college, well that's not the point right here. The point is with a good graduate or postgraduate degree, some hard and smart work, even you can do it in no time.