Darren Rovell of CNBC just had an interesting report on the New York Yankees and Joe Torre’s potential firing. Yankee owner George Steinbrenner had said that Torre’s job was on the line with the Yankees this season. With this in mind, Rovell came up with some three points for firing a CEO/Manager:
- Performance is slipping
- Future Growth not realized
- Losing control of team/incident
Rovell says that Torre falls victim to the first point as his “performance is slipping”. The expectation that Torre set with his last contract is extremely high. Winning a lot of games and making the playoffs is not enough. Management (Steinbrenner) only cares about championships. Rovell then compares Torre with Bob Nardelli of Home Depot – who was fired earlier this year. Both are/were judged as being overpaid for their performance.
CNBC then compared the average Yankee player salary of 6.25M vs. Torre’s 7M salary (according to ESPN). That’s only a difference of 12%. The average US employee makes $29,544 with the average CEO making 10.8M, a difference of 36,455%. This is obviously a huge gap that catches the viewers attention. We’ll get to this a little later.
The segment closed with Rovell mentioning that the Yankees could lose some players who have become fan favorites if they don’t bring Torre back. In short, if Torre goes, Mariano Rivera and Jorge Posada might go.
I have a lot of questions here. Should Torre be compared to the CEO of a company? I would argue that GM Brian Cashman is closer to the CEO title. Should Torre’s salary be compared to the average of the Yankee players (as CNBC did) or the average of all Yankee employees? I would argue the later. It seems that the better benchmark would be a middle manager compare to the people he/she manages. I imagine that gap is a lot closer to the 12% than the 36,455%.
[Update: It looks like Joe Torre turned down a one-year contract, so that’s answers that.]Â