Harold Hill: Ladies and gentlemen, either you are closing your eyes to a situation you do not wish to acknowledge, or you are not aware of the caliber of disaster indicated by the presence of a pool table in your community!— “The Music Man” (1962)
For those of you who have somehow never seen a high school production of “The Music Man”, the plot goes something like this. A con man by the name of Harold Hill comes to River City and convinces the town folk that their youth are on the slippery road to perdition, and that the only solution is to establish a wholesome marching band that Hill is happy to lead. Just pay in advance for those band uniforms and instruments, please.
The modern use of stock-based compensation is a confidence game, in the true sense of the word, that would be very familiar to Harold Hill. What’s the slippery road to perdition? My goodness, it appears that your management team doesn’t have enough skin in the game. Surely disaster is nigh! The solution? Why, stock-based compensation, of course. Wholesome profits for all will flow like water once management’s interests are “properly aligned” with shareholders. Just pay in advance, please.
I know it seems like I’m picking on Marc Benioff, the new savior of Time Magazine. I mean, I guess I did call him a modern-day robber baron in yesterday’s In Brief note. But honestly, I say that in the nicest possible way. Marc Benioff is a freakin’ genius, an absolute master coyote who plays the metagame better than anyone whose last name doesn’t rhyme with Mayzose or Stuffit. Hats off to anyone who figures out the market zeitgeist and parlays that into not only billionaire-dom, but liquid billionaire-dom.
No company has played the stock-based compensation game better than Benioff’s brainchild, Salesforce.com, to the benefit of not only Benioff, but everyone in management (particularly sales) at Salesforce. Here’s how it works.
