In December 2014, Rick Holley made a decision that startled many observers: He gave back what amounted to about $2 million of his compensation.
Holley is CEO of Plum Creek Timber Co., a Seattle-based real estate firm that owns millions of acres of timberland. In 2014, the company generated about $1.4 billion in revenues with roughly 1,200 employees.
But despite the company’s success over the years, it had struggled in the 18 months just prior to Holley’s move to return a large chunk of restricted stock to the board of directors. With flat revenues over the last year and a sagging stock price, Holley concluded that he didn’t deserve the restricted stock award.
Holley’s decision showed that he treated Plum Creek’s core values seriously. One of them is to produce “superior shareholder returns … from innovation and.”
In explaining his action to analysts in a year-end conference call, Holley said he wasn’t “comfortable taking this stock.” “And I didn’t ask the Board’s permission to do it,” he added.
For a leader to forgo such a large amount of money sends a powerful message. Holley has run Plum Creek since 1994, so he’s led the company through ups and downs, and he’s well compensated. But it’s rare for any leader to volunteer to give back a sizable stock award that’s approved by the board.
“It just wasn’t the right thing to do,” he told Fortune magazine.
— Adapted from The Purpose Effect, Dan Pontefract, Elevate.