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What the NFL Can Teach CEOs: Management Guru

In a culture where outcries of short-sightedness are more prevalent than at a midtown Lenscrafters, the noble fix-it ideas of Wall Street critics often fall on deaf ears. "'Sure, we're not perfect but show me a better way,'' financial industry veterans often say.

And yet, with investor wrath in the post-crisis era high and showing no signs of abating, maybe —- just maybe —- the time is right for a re-think. At least Roger Martin thinks so, and he is using professional football is an example.

As dean of the Rotman School of Management at The University of Toronto, this four-time author's latest book/thesis is concurrently bold and simple. Entitled, Fixing the Game. Bubbles, Crashes and What Capitalism Can Learn From the NFL, the book argues that stock-based compensation in its present form has to go. In its place, he would like to see a system installed like the NFL's, which strictly forbids anyone directly or indirectly involved with the game from betting on it. At the same time, executives with stakes in their own companies would have to wait three years to become vested.

Before you shout "that's crazy!" and dismiss the entire idea, Martin offers a real-life success story in A.G. Lafley, the former Procter & Gamble (PG) CEO. Prior to his retirement last year, Martin says the P&G chief put his money where his mouth is by orchestrating a stock compensation plan that doesn't vest until 10 years after his retirement, and even then, only in increments of 10 percent per year. Talk about aligning yourself with the long-term prosperity of the company!

Unfortunately, for every Lafley, there are scores of (enter name of villainized CEO here) out there who sated themselves at the corporate trough long before shareholders got to the buffet. It's certainly not a new debate, but it is definitely a spirited one whose time Martin —- and many others —- feels has finally come.

We want to know what you think. Comment below or drop us a line at Breakoutcrew@yahoo.com.

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20 comments

  • college mom  •  9 months ago
    Absolutely. We have CEO"s that will search the world to find a worker that will make textiles for a $1 a day. If that worker happens to be a child in eastern Asia then so be it. That same CEO then turns to their board and demands to be paid in the millions. The boards oblige because their interests are aligned with the CEO, not the shareholders. We need a way to hold the boards accountable. If companies like P&G start doing this, others will follow. Henry Ford started a revolution of prosperity in this country by setting wages at a rate that allowed his workers to become his customers. We need a company that will start a revolution of CEO and board accountability.
  • J  •  9 months ago
    How about applying it to congress and the senate too!
  • gAuto.com  •  9 months ago
    This is right on the money. The reason why we are in decline here is the non-alignment to long-term goals. By forcing and delaying the gratification, CEOs and management will focus on strategies that offer long term growth as opposed to quick short term returns. This is WAY OVERDUE.
  • JFC1333  •  9 months ago
    Yeah, like the greedy CEO's in America will go for that idea.
  • Karen  •  9 months ago
    That sounds like common sense, no way greedy CEO's and Boards will go for it without stockholders demanding it.
  • 3-7  •  9 months ago
    yea ceos should learn from the nfl.....aslong as their not like the lions in 09
  • Harbinger  •  10 months ago
    Martin's point is that trading secondary market stocks is basically the same as betting. So compensating CEO's with stock options is like letting a player bet on their own game. Instead he argues for compensation that would payout over a much longer term. This makes so much sense that it will be implemented.
  • Strawman  •  10 months ago
    The NFL is the biggest blotted organization on the planet. They can't face the prospect of half full stadiums which is what going to happen in a double dip and a lost fan base due to a product that has lost it continuity and flow due to commercial interruptions.

    Its a classic ponzi about to implode and they won't see it comming because they have detached themselves from football fans in favor of the media echo chamber. .
    • Eric 9 months ago
      Did you actually read this article? Obviously not, because your rambling has absolutely nothing to do with it...
  • Strawman  •  10 months ago
    The NFL is great if your a star ! If you are a lineman its a job which could leave you disabled by 35. Lets see some stats on the average NFL linemen life expectancy. Bet you 65 is about average.
    • bri 10 months ago
      its 57 for lineman
    • bri 10 months ago
      its 57 for lineman
  • d  •  11 months ago
    There is also the golden rule. He who has the gold, makes the rules
  • Just A Man.  •  11 months ago
    Idealistic idea. Chances of success? 0%. zip, nada. There is a noticeable lack of altruistic minds in corporate boardrooms or Wall Street.
  • Jon  •  11 months ago
    If a CEO is invested in his company wouldn't he want it to succeed? and aren't there laws in place to protect against insider trading? Is a CEO taking the risk of spending his life in jail for making money on insider trading any different than the risk to return of a very volatile stock? I do not agree that CEOs should invest on insider information but it is their choice to make that risky decision.
    • bri 10 months ago
      they want it to succeed, but in the short term. What is best short term, and short term stock price increases are not always good for the long term. That is what he was saying.
    • bri 10 months ago
      they want it to succeed, but in the short term. What is best short term, and short term stock price increases are not always good for the long term. That is what he was saying.
  • Oh-Pooh  •  11 months ago
    With Congress about to outdo teens and preteens in social media gaffes (sexting), who do you think will have enough sense to implement this? I also think that workers ought to have residuals on patents issued and creativity. Think of the poor engineers and Phs Ds that worked for Tech and Biotech? if there was a rule that says 10% of profits from these ventures go to line workers, then everybody who had a part in the success gets something, we get a society that is better off. There ought to be some benefit to Americans over the Singapore and China engineers who reap the benefits of manufacturing American innovations while American engineers are sidelined by the Fioorinas (HP) through outsourcing and she makes out like a bandit.

    Look at who made out like a bandit at Groupon, LinkedIn and facebook? Investment houses! The workers, progammers, enginers, the universities and you and I who make these things better get nothing. Sure you and I are not entiteld to anything, but line workers at these companies ought to get say, 20% of the windfall. In Hollywoood if you are part of a movie, you get a check for ever, as long as moviee makes money. the same should be happening to the scientist who worked on Viagra, or iPhones, etc.
  • rl  •  1 year 0 months ago
    Greed will never let anything like this happen.
    • Frank N 11 months ago
      Government will never let this happen. Ending the government is the only solution.
  • Marc  •  1 year 0 months ago
    I sent the so-called Breakout crew this e-mail:

    Are you kidding? Can���t you recognize when an academician is plugging any nonsense he can think of because his university is pressuring him to publish! Were you simply using NFL in your headline to attract ad-supported views?

    Please don���t tell me that you are unable to recognize the difference between an athlete gambling on the outcome of his own games and a CEO investing I his own company. If you are unable to recognize the distinction, I will hound the heck out of Yahoo! Upper management to either terminate this Breakout feature in its entirety, or at least replace the people who are running it now due to a scandalous lack of financial expertise.

    You owe the Yahoo! Community an apology.
    • John 1 year 0 months ago
      Your post makes me think of a classic tale about a Danish Prince who said "something is wrotten in the State of Denmark".
    • Jeff Macke 1 year 0 months ago
      The NFL is in the title of his Roger Martin's book, "Fixing the Game: Bubbles, Crashes and what Capitalism can learn from the NFL". Roger is the Dean of an entirely respectable business school. We openly disagreed with his basic thesis though, as proponents of both free-markets and free-speech, we were happy to give him a platform. I assume his university is pressing him to publish; how that distinguishes him from any established author is beyond my ken.

      I compared the NFL to the most vicious capitalists in American history. I figured that was sufficient to distinguish between professional sports and modern corporate practices. Disagree with him though I did, Mr Martin CLEARLY understood the difference between an athlete gambling on his own games and a CEO. If analogies were exact they wouldn't exist ("a fine wine is like a fine wine").

      We aren't going anywhere and my financial experience is above your reproach.

      You don't have my apology and are welcome to express your opinions, simple minded and laden with empty threats though they may be.

      Disdainfully yours,

      Macke
    • Marc 1 year 0 months ago
      Ah yes, now I recall you or one of the other Yahoo! Finance content areas actually has Henry Blodgett as a participant. Yes, you're right. You aren't going anywhere. It's clear Yahoo is like Wall Street in the bubble -- peddle any garbage for a buck. You can disdain all you want . . . your expertise is still sadly lacking, as is your character and integrity.
  • allena  •  1 year 0 months ago
    just remember who the
    boss is.
  • Patriot  •  11 months ago
    Executive Compensation is out of control. Most are professional administrators not strategic planners. Executives sit on Compensation Committee on Board of Directors, do you think they will vote to reduce Compensation. Majority Shareholders are Institutional Investors, so little control there. Put some creditors on the board.

    Go back to old rule between highest paid nonexec position and Exec. No vesting (like most employees) for at least 5 years.
  • wackamole  •  11 months ago
    Pro sports is a rich man's game where ego trumps business sense. It is all about egos.
  • C. Leach  •  11 months ago
    The last I saw, the NFL was about to cancel an entire season due to the actions of the CEO's of the teams. This is some doo-doo head academic's idea of a successful operation? Or is it just an economist's (read intellectually challenged quasi-psuedo scholar) attempt to create a best seller and rake in some cash?
  • Lori fALEs  •  11 months ago
    Always trade on NEEDS not WANTS!!!

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