The current situation regarding executive compensation is that executives of large companies in the US are believed to be earning more in they’re annual salary than they deserve. Some executives making larger percentages, when in fact the company stock prices have been going down in their terms as CEO.

Company shareholders are getting increasingly involved and more aware about the fact that executives of the company that they invest in are earning up to almost 370 times that of the average worker.

Executives get paid in several ways:

Salary - A salary is a form of periodic payment from an employer to an employee, which is specified in an employment contract. From the point of view of running a business, salary can also be viewed as the cost of acquiring human resources for running operations.

Shares – A small piece of a company and/or organization. Shares of stock retain a small value of the company, and will change in value according to the positive or negative affects of the company statistics, market, and economy.

Options – Right to buy a specific number of shares of your company's stock during a time and at a price that your employer specifies.

The concern for rapidly growing CEO salaries are relevant to business today simply because the market continues to expand along with it. More and more shareholders in public companies will be acting and voting based upon how well the CEO is stabilizing and developing the company while in his term. It’s important that CEO’s are paid according to their overall performance with in company.

Not all executives are paid fairly for their efforts. As a matter of fact it really depends on the companies structure in payments. Some executives are indeed overpaid for really not doing anything, and some receiving increasing salaries even causing company value to go down.

Recent efforts to implement a system where an executive gets paid based on his performance is a solution I think most can agree at. It’s only fair, and will provide a payment solution that neither executives themselves nor stockholders can complain about. This way an executive will not lose out for good efforts within the company, and stockholders will be less disgruntled when the company executives’ salary goes up, only after their share values have gone up.

Lets look at the core factors that Enron had balanced itself upon. Let’s try to understand why a company like Enron once was a highly respected powerful organization, and why it no longer exists.

Next, lets elaborate what each of the foundations of these core factors are, and how the functions were infused within the company.

Reputation – Enron obtained and sustained a mark of high standards of reputation, not only within the business identity, but also through its innovators and employees. Their strong reputation alone deployed sales, investors and shareholders, technologies and markets to rapidly increase and expand year after year.

Vision – Did Enron have a vision? Of course they did, perhaps too many visions for them to handle being "America's Most Innovative Company". Enron employed over 20,000 people and was one of the world's leading electricity, natural gas, pulp and paper, and communications companies, yet wanted to expand in a variety of areas. They enforced visions, goals, and techniques while perpetually delegating them to their employees compiled of MBA’s, ex-Military, Harvard Students, and Entrepreneurs.

Confidence – Enron used many methods of instilling various traits of its visionary characteristics within it’s managements, staff, investors, and employees. “The floors of the parking garage were marked by words to remind employees of valued attributes: bold, innovative, smart, united, ambitious, accomplished, resourceful, creative, confident, adventurous, adaptable, and undaunted.” (Leadership Reader, Enron: On the Side of Angels)

These are just some of the many aspects that have driven Enron into creating such a powerful world-renowned corporation. Now lets try to compare and contrast these foundations within laws of Leadership from John Maxwell’s Leadership 101. Although there are many levels and laws of leadership we can evaluate, I’m only going to speak of a few and why Jeffrey Skilling and or Ken Lay compromised them.

“…An employee shall not conduct himself or herself in a manner, which directly or indirectly would be detrimental to the best interests of the company…” (Leadership Reader, Enron: On the Side of Angels)

After reading Enron: On the Side of Angels, while understanding the groundwork that holds and encompasses leadership traits and attributes, finding invalid evidence that can tumble a leader to his knees should not be very hard to point out. Although not provided all details that assemble the story of Enron, lets evaluate the levels of leadership and where Enron’s Executives stood on the graph.

Position – People follow you because they have to. Sure, I think most of us can say that executives of a corporation start out at this level. Their positions are based solely on their title, and people will follow them because of either their nametag, or because they hold higher authority and the power to un-employ you. All executives on Enron can start here.

Permission – People follow you because they want to. Although applying much less than the first level of leadership position, there are still many cases of employees of Enron that followed just because they wanted to. Successful people still do get inquired for mentoring and teaching their skill sets, primarily because people simply want to be successful, and will look up to those who have accomplished it.

Production – People will follow you because of what you have done for the corporation. Another true statement that most likely played role in Enron’s Organization. Who else would have made Enron the multi-billion dollar corporation that it was, if not for the management, executives, and investors that accumulated the tools, techniques and knowledge to generate more revenue than most companies around the world! Yet another reason to follow the lead of Enron.

Personal / People – People will follow you because of what you have done for them. This is a level that is clearly displays itself vibrantly. “More than 2000 Enron employees were millionaires. Employees received free laptops and hand-held devices, expensive ergonomic chairs, and lunches at Houston’s finest restaurants”.

Enron did a lot for it’s employees, especially those of physical pleasures and tangibles that would help sway in many decisions needed for public expansion. Come on, who wouldn’t follow someone who was paying dividends of millions? I sure would….

Personhood – People follow, because of who you are and what you represent. This is the stage that Enron never made it to, and quite frankly they never would have. This level of leadership achievement relies on the factor of another irrefutable law of leadership, one of Trust. “Lose your peoples trust, and you’re through as a leader” Over and over Enron had betrayed it’s loyal workers and employees, some of who have been their for over 20 years, that were simply just told to leave.

The final step of leadership, which they had failed to acknowledge and implement, had caused the company to crumble to ground. Had they understood the importance of not just pretending to honest, and in reality making every effort to truly enforce it, they might have still been a successful organization today. Here is one of their phony attitudes…

“We want to be proud of Enron and to know that it enjoys a reputation for fairness and honesty that is respected…Lets keep that reputation high” (Leadership Reader, Enron: On the Side of Angels, page 11)

“You don’t know what you can get away with until you try” – I think we can all agree that this quote from Colin Powell’s Lessons of Leadership, was something that was practiced very well within Enron’s Management. It’s only too bad that the public now knows of what they have gotten away with, when trying to keep it a secret from the entire world and federal government for several years. Again, this broke the “law of solid ground” as Enron violated their trust, not only within their company, but most importantly with the Federal Government.

“Being responsible sometimes means pissing people off” – Most really wish Enron had taken this into account. Instead of forging numbers, they should have been honest with their investors no matter how many of them they would have lost merely from statistical information. But, by not being responsible enough in informing the public of true valid numbers, they had compromised and indeed lost everything.....