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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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An Unexpected Display of Class

Comments (10)

I had a pair of situations recently with executives from two different companies that reminded me what a pleasure it is to work with A+ people.  I won’t single them out by name in order to not embarrass them, but they know who they are.  Both demonstrated what I call “an unexpected display of class” in completely unnecessary, but appreciated ways.

Case 1: This person was promoted from controller to VP Finance.  She had been with this company from their inception, is an incredibly hard and diligent worker, and is extremely capable.  Her reaction to a quick congratulation note regarding her promotion can be summarized as “thanks, but a title change wasn’t necessary – I’ve been here since the beginning – I’m extremely committed to the team and the investors – I’m excited about the future.”  I had to reread the email a couple of times, not because I was so surprised by her response (it was completely in character), but it stands out in stark contrast to the endless discussions I have had over the past 10 years about title inflation, desire for more “external recognition”, and general noise from execs about how important it is to have the right title to position themselves “properly.”

Case 2: I was at a board meeting recently and the CEO voluntary requested that he not be paid his 2004 bonus because it was the difference between the company being profitable for the year.  We had acrued for his bonus throughout the year and the company had outperformed at the EBITDA level (they were solidly EBITDA positive), but just barely missed being Net Income positive for the year.  This CEO had decided – prior to the board meeting – that it was more important to him to post a Net Income year for 2004 then to get paid his bonus.  After some discussion, we agreed to his request, but insisted that we have a separate mid-year bonus test for 1H05 performance that is independent of his 2005 bonus plan and that the board reserved the right to grant him a discretionary bonus mid-year.

In both cases, these execs acted in a humble and selfless way – clearly putting their company ahead of their own ego and financial interests.  Fortunately for me, this is not unique in my portfolio – as I’m really proud of the group of people that I have running the companies I’ve invested in.  However, these two examples both felt like great object lessons that were worth singling out.

I personally try to regularly have “unexpected displays of class.”  It’s obviously one of those things that is very hard to “self measure” – I hope I compare to the two folks above.

  • Dave Jilk

    Brad, you set the standard. It is unfortunate that occasionally people view this as an opportunity to negotiate harder, rather than for the class and generosity that it is.

  • http://sshu-s4.tripod.com/blog Steve Shu

    The board’s response in Case 2 is really nice. A couple of notes: 1) what I’ve often struggled with is how much to use these kind of methods (often manifested as out-of-cycle bonus or incentive plans) at below the exec level, and 2) if these plans can be efficiently (and how efficiently) implemented below the exec level, can they ever be achieved in non-venture environments to incent the workforce.

  • Brady Bohrmann

    Brad, reminds me of a situation in which we replaced a CEO and he declined his one year severance. It’s no that he didn’t need the money, he did. He simply said that he had been treated very fairly by the board and the Company needed the cash.

  • Sandy Kumar

    Case #1 is Wow! I think its noble for a salaried working professional to be above title /prestige/perks , because thats ulitmately ones reward for good work .Its certainly different for executive team and investors, because they have a skin in the game that automatically rewards them when the company succeds, so its only common-sense that a CEO make a gesture like in case #2.

    This is also kudos to the CEO of case #1 company , who has sucessfuly created an environment of empowered ownership, a source of true passion

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