Tuesday, September 23, 2008
BoSacks Asks: What's a Pound of Flesh Worth These Days, Anyway?
By Bob Sacks
Publishing Executive Magazine
What's a pound of flesh worth? What's a fair wage? Is your day's labor in the publishing salt mines worth what you earn?
Here is another question, which seems particularly relevant and timely in light of recent reports showing that some executives at magazine industry associations earn annual salaries of $400,000 to $740,000: Do they think that - at a time when the industry is as challenged as ever - they have earned that pay in the same salt mines for a job well done?
I mentioned this line of questioning to my son, who proceeded to practically rip off my head. He asked what right I had to comment on another person's salary. Well, I responded, when I see General Motors, once the world's largest automobile corporation, driven willingly off a cliff by management that has been ineffective for more than four decades, the very same management that makes hundreds of millions of dollars in salary and compensation, I believe I have the right to an opinion.
What should we expect from an association officer in exchange for his/her compensation? I'm not looking to condemn or single out any one executive or association. I'm simply calling for an industrywide discussion. Is there, or should there be, a correlation between compensation, results and revenue at any industry association?
It was pointed out to me by a friend, whose perspective I sought for this column, that there is no such thing as "fair" in economics. His opinion was that people do not engage in an economic transaction unless they feel that they are getting a benefit greater than their costs. In this case, I am not so sure that concept can be applied. This is just not a typical business relationship of vendor and supplier.
So, it seems to me that the question comes down to this: What is the benefit to the association membership of paying association management the salaries they are being paid, and who determines this value? The obvious answer is that the associations' boards of directors decide both the criteria and the range of compensation packages.
But that answer has limitations and is complicated. Often, volunteers oversee associations. Also, there are no stockholders expecting a financial return for their decisions and managerial oversight. This is a system of limited accountability that creates potential problems or sometimes just simple overcompensation - or, if not overcompensation, then compensation based on no real, measurable data, unless you use the state of the industry as the de facto guideline. And if association salaries were based on the industry's condition, then we would see years of plenty followed by years of lean. But surely that's not the case here, because we are in a time of lean, and yet association salaries remain extremely generous.
Is it possible to actually measure the performance of an association? No, not really. Should associations be judged on how well their industry is performing compared to others? Can associations be measured on how healthy and robust their individual membership is at any given time?
Let me be clear: I don't think we can hold associations responsible for industry variations in circulation, ad pages and assorted revenue streams. But how else can it be measured? And the next logical question is, by what criteria should management's compensation be determined?
If your company was run using the same, nonspecific criteria that guide an association, how long would you expect to remain successfully in business? If your board of directors - which hired your publisher and other senior management - was managed by a series of non-paid volunteers, would you have confidence in long-term profitability? These questions seem worthy to discuss and ponder as our industry moves forward into the digitized 21st century. I am greatly interested in your opinions on this subject.
Bob Sacks (aka BoSacks) is a printing/publishing industry consultant and and president of The Precision Media Group (BoSacks.com). He is also the co-founder of the research company Media-Ideas (Media-Ideas.net), and publisher and editor of a daily international e-newsletter, Heard on the Web. Sacks has held posts as director of manufacturing and distribution, senior sales manager (paper), chief of operations, pressman, circulator and almost every other job this industry has to offer.