CEO Salary…You’re Doing What?!!
Updated: Sep 5, 2019
I’ve seen that look before. The last time I saw that look on my wife’s face was when I told her I wanted to quit a stable well-paying CFO role, in order to start a new venture that had never been done before, in an industry I have no experience in, and taking minimum wage. Plus, I was going to do it while we were expecting our second child and after we bought our first home with a mortgage.
“So, tell me why are you doing it? Why are you giving away half of your salary?” she asked calmly.
I was glad she didn’t say I was crazy although she may have thought so.
I explained my reasons:
An example for my kids – As a young child, my parents and grandparents always taught me that it is not how much you give that is important but what you are willing to give to help others. I want my kids to realize (when they eventually grow up) that the measure of success is not the size of your paycheque, but rather the positive impact you can make in the life of others (whether that is in an environmental, educational or social context).
Shareholder alignment – I am a big believer in CEO's aligning their personal financial interest with their shareholders. Every January 2nd or so, I see reports of CEO's of large corporations making the equivalent annual compensation of their employees by lunchtime of the first day of work. It is disappointing to see that this wage gap continue to persist and is even increasing. As such, rather than growing my compensation and wealth through an executive salary, I plan to apply a simple formula – if I want a raise, increase the dividend, and if I want to grow my wealth, grow the share price.
Redefining wealth – For me, wealth is defined as having the time and ability to do what you love to do and at your own terms. That means having dinner with my wife and kids daily, being involved in their lives, to not have to rack up the travel miles, to go on the occasional vacation, to get excited chasing a passion everyday (and calling it work) and to be continuously learning. Wealth also means being able to give back and make a difference in the lives of the communities we work in and the shareholders and clients we work with.
Supporting what is important to our shareholders – When I speak with our shareholders (who are typically individuals and family offices), I discover some of the most amazing causes that they support. Whether it is to combat poverty, provide shelter, free education, medical support, or environmental protection, I am constantly inspired by the work that they do, which most of the time goes under the radar. Just as our shareholders have supported us, we will support them in the causes that are important to them.
Feels Darn Good To Look At A Spreadsheet! – While I may not be on the front lines of the true heroes helping bring food and shelter to the downtown eastside of Vancouver, education to orphans in Nepal, or medical resources to children in Ethiopia, knowing that 50% of each hour I spend staring into a financial worksheet or reading a technical report is helping others, brings an unbelievable fulfillment to my work day.
Start a Movement! – My hope is that if I can inspire one CEO of a large corporation or even a partner at a law, accounting, or investment firm to replicate this for a year, my goal would be complete. While this is not even close to the same scale as The Giving Pledge, I hope that there will be a small ripple effect from my actions. The charitable need is great and immediate, and I do not want to wait until I am a billionaire, or when I have passed on, before doing something about it.
As a bonus, the next CEO/Partner/MD, to do this will get the branding rights to this movement!
In the coming months and years, our team will share on our blog some of the incredible causes our shareholders are involved in, and those that we will be supporting and contributing to.
First up in an upcoming blog post, is the Union Gospel Mission in the downtown eastside of Vancouver, who are helping those in Canada’s poorest postal code.
“So, how long do you plan on doing this?” my wife asked. “As long as I am CEO of RE Royalties?”
I stared back at her. “Ok” she nodded. Thankfully, she didn’t think I was crazy.