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September 03, 2015

One Winner Leading 216,799 Losers?

[Larry] Merlo at CVS received salary, cash bonus and equity worth $32.4 million in 2014, a filing shows. The Woonsocket, Rhode Island-based company had more than 217,000 employees last year in 7,800 retail pharmacies and 900 walk-in medical clinics, according to its annual report. Workers in health and personal-care stores, a category that includes CVS pharmacies, earned a median annual wage of $27,060 as of May 2014, according to BLS data.

“Consistent with our pay-for-performance philosophy, annual compensation for our CEO and other executives is in line with industry standards and closely reflects our company’s financial success,” Carolyn Castel, a CVS spokeswoman, wrote in an e-mail. via Bloomberg's These Retailers Make Bank CEO Pay Look Modest

Assuming CVS employees are paid the same average annual wage of their industry peers, $27,060 then Mr. Merlot's total compensation package of $32.4 million is roughly 1200 times greater.

That means Ms. Castel, a CVS spokeswoman, is saying  there's one winner at CVS - Mr. Merlot - and the remaining 217,000 employees are all losers. Otherwise, they'd be paid more. Am I right?

But, that's not how you engage employees. No matter how you spin that message, it won't work.

Any employee engagement program with a CEO making 1200 times the average employee salary who's then defended by a spokeswoman saying they pay for performance will fail. No matter how many surveys or happy faces or casual Fridays or "employee of the month" plaques your company sponsors ... that rubber don't meet the road.

And the CEO and their spokeswoman/man will say "See? We tried." before they call their accountant for best practices on sheltering this income.

Posted on September 03, 2015 at 07:18 AM in employee engagement |

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