Meaningful incentive.

From today’s New York Times:

Legg Mason, the money manager in Baltimore, gave its chief, Raymond A. Mason, 70, a pay package worth more than $35 million for the fiscal year that ended March 31. Mr. Mason, who has run Legg for 25 years, received $14.5 million in cash, and options that the company valued at $21.2 million.

Legg’s board granted the options "to provide a meaningful incentive for Mr. Mason to remain fully engaged and focused on the success of the company," according to Legg’s proxy statement. To collect them, he must stay on until July 19, 2007.

Imagine $35 million to provide the incentive to work for a single year. Yet there are so many people who manage to find the incentive to remain engaged, for a lot less.

Do you really want someone who can’t find a "meaningful incentive" to "remain fully engaged and focused on the success of the company" unless you pay them an exhorbitant salary?


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