Wednesday, September 9, 2009

Celebrity Compensation

This isn't the first time I've blogged about celebrities and human capital management. In my post about Non-Monetary Benefits, for example, I discussed the motivational benefits of hiring celebrities as managers instead of just normal people. And in my Diddy post I showed how performance management is alive and well in reality TV.

As a compensation specialist it was therefore inevitable that I would eventually fix my sights on celebrity compensation.

So let's talk about American Idol. I don't watch American Idol but I have caught snippets while channel hopping or being held captive at someone's house while they were watching it and on those occassions felt myself drawn to Randy Jackson's laid back competence and Paula Abdul's warmth.

Recently Paula announced that she would be leaving the show due to dissatisfaction with her compensation. Although the offer was rumored to be around $10 million, which you and I would probably find fairly generous, the sticking point seemed to be how it measured up to her colleagues' compensation.

Is this a case of gender discrimination or could it be fairly argued that Paula wasn't performing as well as her AI colleagues and therefore received a lower offer?

In any event, the AI producers decided to let her walk without upping the offer and I find myself pondering whether they made a good decision.

On the one hand, I am a firm believer that talent management is about treating good people fairly and well, so I personally side with Paula in her demands for more equitable compensation. I think paying her more would have been an overall win for the show since she clearly has a loyal fan base and has played a significant role in making the show a huge success.

On the other hand, after much soul searching I can't honestly say the producers made a mistake from a purely business point of view because no one is irreplacable once a critical mass of success is reached.

Not even someone who helped make a business venture successful and continues to do so.

What do you think?


  1. Mmm... not a big Idol fan.. still, if they paid ME 10 million to watch, then I'd sacrifice my principles... ;-)

  2. I think Paula made the right move for herself. I'm no AIdol compensation expert but certainly her two male cohosts were making more. But let's not forget the other female cohost who has been on the job for one year. I supect that Paula with her years of experience showed her the ropes, while Karla (the newest judge) was most likely making what Paula made or very close to it. Too many times in business you have to practically quit and then get rehired just to make what the other newbies around you are making. So instead you leave and hope to find validation elsewhere.


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