A rant about the excesses of elite executive pay!

Gosh, could I rant about the excesses of elite executive pay!

It makes my blood boil reading that the CEO of Warner Bros Discovery could walk away with more than $800m if he exits following the proposed Paramount Skydance deal.

But I’ll save that for another day.

Instead, it got me thinking about something more useful.

What can the rest of us learn from this about aligning incentives with what we actually want our businesses to achieve?

A quick bit of context.

The coverage highlighted a familiar pattern.
A CEO whose company has delivered mixed results over time, including a major earlier merger that has underperformed (Warner Bros and Discovery in 2022).
Yet through a complex mix of stock awards, options and deal-related payouts, he stands to earn an extraordinary sum.

Much of that compensation is tied not to hard financial outcomes, but to more subjective “personal” goals.

In other words, reward and reality don’t fully line up.

And while most of us aren’t dealing with billion dollar pay packages, the underlying issue is surprisingly common.

We all get the behaviour we incentivise.

A few lessons I’ve seen play out time and again.

People follow incentives, not strategy.
You can talk about quality, collaboration or long-term value all you like. But if bonuses are tied to short-term revenue or individual performance, that’s what people will optimise for.

Activity is not the same as outcome.
It’s easy to reward effort. Meetings held, proposals sent, campaigns launched. But unless those activities translate into meaningful results, you end up with motion without progress.

Misalignment often hides in plain sight.
Marketing is rewarded for leads. Sales for revenue. Delivery for cost control. Each makes sense in isolation, but together they can pull the business in different directions.

Simple beats clever.
If your team can’t clearly explain what success looks like and how they’re measured, the system won’t drive the behaviour you want.

Incentives shape culture.
What gets rewarded gets repeated. What gets tolerated becomes the norm.

In my coaching work, this comes up a lot.

Leaders often feel frustrated with behaviours in their teams. Lack of ownership. Short-term thinking. Internal tension.

When we dig a little deeper, it’s often not a people problem.
It’s an incentive problem.

So we step back and ask a few simple questions.

What are we actually rewarding here?
Where are people playing the incentive system rather than the driving the business outcome?
And if we were designing this from scratch, what would we do differently?

Small shifts in these answers can have outsized impact.

Which brings me back to that headline.

It’s easy to look at executive pay and shake our heads.

But the more useful question is this.

Where in our own businesses are incentives and outcomes drifting apart?