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High CEO pay – does it really drive performance?

Economic growth, Financial Events
By Paul Hodges on 03-May-2008

Archie Norman is one of the most successful CEO’s of recent years. When he joined ASDA in 1991, it was a struggling, nearly bankrupt, UK food retailer. 9 years later, it was sold to Wal-Mart, after he had transformed it. Shareholders benefited from an 8-fold increase in the share price over the period, whilst Norman earned just £300k ($600k) a year.

Looking back on the experience, Norman does not think he was treated unfairly. In an interview today with the FT, he comments:

• ‘It has never occurred to me that money would have any bearing on my pace of work. I don’t work harder or less hard depending on the amount of money I earn. You are only as successful as your last challenge. I regard the things I have done in my career as a preparation for the next project’.
• His tip for successful management is also refreshing. ‘You have to be humble. You have to be prepared to listen to people whether they are cleaning the floor or in management’.