Of course, Nardelli managed to leave the firm with an “exit package” totaling $210 million, but Preston insists “that was part of the price of luring him from GE, where he was a star under Jack Welch. A contract is a contract. Could Home Depot have found cheaper talent? Sure, but Nardelli was considered one of the nation’s top execs at the time. And while his arrogance may have done him in at Home Depot, he was no slouch, doubling the company’s sales and more than doubling its earnings per share during his six-year tenure, while creating 100,000 net new jobs.”

REWARDING VIRTUE

In the face of abundant evidence that providing high executive pay, and even generous bonuses, will often make solid business sense, critics of the current compensation system tend to turn their attention from the companies that write the big checks to the corporate leaders who receive them. Regardless of the impact on the corporate bottom line, the argument goes, multi-million dollar pay packages serve to corrupt and distract the very people they’re meant to benefit. Psychoanalyst Kerry J. Sulkowicz wrote in Business Week (November 20, 2006) about the “psychology of CEO pay,” urging that “we should also look at compensation’s impact on a chief’s personality and on his board relationships. Superstar pay can reinforce latent grandiose tendencies in those so predisposed.” Dr. Sulkowica cites a 2005 analysis by Washington University Law School professor Tony Paredes who theorizes that “high pay can contribute to a CEO’s overconfidence – in the face of which, board members are likely to be more deferential and less able to spot bad business decisions.”

There is a long and honorable tradition, of course, behind the widespread fear that fabulous wealth will spoil the character and shatter the integrity of those who’ve achieved it. Matthew’s Gospel (19:24) quotes the enigmatic declaration of Jesus that “it is easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of heaven.” The common understanding of this famous verse suggests that the accumulation of riches makes it less likely to achieve the spirit of humility, meekness, and kindness associated by Judeo-Christian tradition with Godliness. The receipt of executive pay packages averaging more than $10 million a year can surely enhance a propensity to arrogance, a sense of entitlement, and isolation from ordinary folks who never fly in private planes, ride in limousines, receive elaborate plastic surgery, or ski at Gstaad. It’s no accident that the most celebrated of all American films, “Citizen Kane,” portrays a visionary, hard-driving executive and entrepreneur who ends his life as a bitter, lonely old man not in spite of the business empire he successfully constructed but because of it.

While there’s never a shortage of baleful examples of business leaders who disgust the world with their rapacity, ruthlessness or rudeness, it’s worth noting that the free market system generally punishes such appalling attributes rather than rewarding them. On May 19, 2009, New York Times columnist David Brooks wrote a richly insightful piece about the traits most reliably associated with executive success. He cited a recently completed study called “Which C.E.O. Characteristics and Abilities Matter?” by Steven Kaplan, Mark Klebanov and Morton Sorensen. They compiled detailed personality assessments of 316 corporate chiefs and linked their personal qualities to the performance of their firms. “They found that strong people skills correlate loosely or not at all with being a good C.E.O. Traits like being a good listener, a good team builder, an enthusiastic colleague, a great communicator do not seem to be very important when it comes to leading successful companies.”

What counted far more as a contributor to business success was an ability to focus—the disciplined, reliable, concentrated pursuit of clearly defined goals. As Brooks reports, “the traits that correlated most powerfully with success were attention to detail, persistence, efficiency, analytic thoroughness and the ability to work long hours. In other words, warm, flexible, team-oriented and empathetic people are less likely to thrive as C.E.O.’s. Organized, dogged, anal-retentive and slightly boring people are more likely to thrive.”

The new study conformed closely to the conclusions from similar analysis of the ingredients for corporate success. “Good to Great,” a 2001 bestseller by Jim Collins, found that the top-performing chief executives were “humble, self-effacing, diligent and resolute souls who found one thing they were really good at and did it over and over again.” That same year, Murray Barrick, Michael Mount and Timothy Judge surveyed a hundred years of scientific analysis of business success. As Brooks describes it, they reported that what mattered most in scores of studies was “emotional stability, and, most of all, conscientiousness – which means being dependable, making plans and following through on them.”

While Brooks never mentions it, the characteristics he delineates as crucial for executive leadership read like traditional and old-fashioned definition of virtue. According to an abundance of authoritative analysis, the corporate system rarely honors boisterous, erratic or flamboyant behavior – or at least honors such conduct only on an occasional, short-term basis. The lasting achievements stem from discipline, consistency, reliability, and the ability to defer gratification—the same qualities that my grandmother (and everyone’s grandmother) tried to encourage in the younger generation. In the long run, self control will count more than salesmanship, and concentration more than charisma.

Anyone who has already mastered such characteristics should find an open road to business advancement. And anyone who hasn’t yet internalized these shamelessly bourgeois values most directly linked to executive command will see them implanted and encouraged as he seeks to climb the corporate ladder. If, as commonly assumed, the business system will help shape personalities, then the natural selection process should discourage anti-social, disruptive and destructive behavior and promote respectability and industriousness. Rather than molding narcissistic crooks and exploitative frauds, experience in the free market economy should promote unassuming but dedicated achievers who illustrate two of the most cherished aphorisms in “Ethics of the Fathers,” the most celebrated volume of the Talmud. There, Rabbis from nearly two thousand years ago urged their students to “say little and do much” while answering the question, “Who is mighty?” with the ringing declaration that it is “He who controls his own inclinations.”

No wonder that artistic personalities, with their emphasis on emotion and spontaneity, feel no affinity for the world of business. As Brooks concludes, “the virtues that writers tend to admire – those involving self-expression and self-exploration – are not the ones that lead to corporate excellence.”

Rabbi Daniel Lapin emphasizes the inherently virtuous aspects of business success in his book, “Thou Shall Prosper.” He writes that “deep within traditional Jewish culture lies the conviction that the only real way to achieve wealth is to attend diligently to the needs of others and conduct oneself in an honorable and trustworthy fashion…The astounding news for the Jews was that God wants humans to be wealthy because wealth follows largely righteous conduct, which is His ultimate goal for His children.”

Later, he counsels against the temptation of emphasizing a few deplorable examples—like the Bernie Madoffs of this world -- to mischaracterize an overwhelmingly benign system of productivity and mutually beneficial relationships. “Conceding the many imperfections in the system that allows humans to cooperate economically,” Lapin writes, “is not the same as discrediting the entire enterprise of business, nor is it reason to do so. Yes, there have been many business professionals who have behaved scandalously. Business is a tool of human cooperation, and like any tool, it can be misused and abused. However, you should distinguish between judging certain conduct by business professionals as unethical and judging business itself. Only humans are capable of making moral decisions, and only humans can be judged and held accountable for those decisions and for the actions that flow from them. Like a sharp scalpel that can be used for healing in the hands of a dedicated surgeon of for assault in the hands of a thug, business can bring goodness and hope to all, or it can hurt.”

In the long run, however, only one effort can insure profitability and prosperity: reliably providing to others some good or service which they need or want, and for which they are willing to pay with the fruits of their own labor. In this sense, every successful executive becomes a benefactor to his customers, as the free market system compels service to your neighbor.

In a moving account for the popular magazine Youth’s Companion in 1896, the great nineteenth century steel baron and philanthropist Andrew Carnegie described his excitement upon bringing home his first week’s pay for hard labor at the age of twelve. “I cannot tell you how proud I was when I received my first week’s own earnings,” he recalled. “One dollar and twenty cents made by myself and given to me because I had been of some use in the world! No longer entirely dependent on my parents, but at last admitted to the family partnership as a contributing member and able to help them! I think this makes a man out of a boy sooner than almost anything else, and a real man, too, if there be any germ of true manhood in him. It is everything, to feel that you are useful.” (Italics added)

This sense of usefulness, of service to a larger network of people, represents a richer reward for productive business activity than even the most lavish corporate pay package.

That’s why business bashing usually falls flat when Americans have the chance to put the anti-capitalist messages in context. In the midst of presidential primaries of 2008, the widely-admired former CEO of General Electric, Jack Welch, (in collaboration with his wife Suzy, former editor of the Harvard Business Review) responded to a demagogic Democrat from North Carolina who said, “For the past seven years, we’ve had a President who has stood up for corporations. It’s time we had a President who stands up for you!”

“You, who?” the Welches asked. “Who are these ‘you’ people, we wonder, who aren’t part of business in some way? Sure, some portion of the population is made up of students, government employees and workers in the nonprofit sector.

“But let’s be real. The vast majority of Americans make their livelihoods from business, and not all of them are faceless, bloodless, megabonus-earning executives on Wall Street. They are the field workers of Big Oil, toiling in some of the harshest conditions on earth, from the oil sands of Canada to the high seas off the coast of Norway. They are the immunologists and oncologist of Big Pharma, hunkered down in their labs trying to find cures for AIDS and cancer.

“They are immigrants from Ecuador and Vietnam, running the restaurant around the corner or launching a high-tech venture in their garage. Our point is, corporations are not a bunch of buildings. Like all businesses, they are flesh and blood. They are human beings. And most of the time, they are human beings trying to make the world a better place for their families and employees….

“Business isn’t the enemy of people –it is people. And business doesn’t destroy hope. It creates it.”

THE HARPOONED WHALE

Which brings us back to the hopeless condition of one-time CEO Dennis Kozlowski, disgraced and imprisoned following the collapse of his high-flying career with Tyco. In his hauntingly poignant prison interview with Peter Hossli, Kozlowski continued to protest his innocence. “I think the jury got it wrong. I believe I earned those bonuses. I think I’m here simply because of the times. People lost money in the stock market in 2001 and 2002. Somebody had to be blamed for that. I became the poster boy for that. ...In some years I made a $100 million. I think having been tainted with that amount of money that the average person will say, ‘Well, he must be doing something wrong.’ That’s why I was found guilty…

“Nobody deserves $100 million,” he continued, “no matter how good you are. But most of it came from stock appreciation. Our stock doubled every year for three or four years. I was paid about a million dollars to about a million five in cash. And everything else was earned through appreciation of the stock. I could have earned $100 million or I could have earned zero in the process.”

Looking back on his obsessive pursuit of success, Kozlowski naturally regrets the lost time with his two daughters, and his single-minded commitment to the company he served for 27 years. “I wanted to have Tyco become one of the best corporations in the world. I’m a competitive person and I enjoyed having Tyco rise above its peers. And I wanted to be a CEO who led Tyco to becoming one of the most prominent companies in the world.”

After several years in his tiny jail cell in upstate New York, Kozlowski now realizes that he fell victim to the conspicuous and even reckless scale of his own prosperity, and he regrets abandoning the focused, results oriented, self-effacing style of the CEOs with the best long-term record of success. “There is a saying that the only whale that gets harpooned is the one that comes up to the surface. I should have been content with far more modest growth in the company. With staying off of the radar, or returning shareholders a very reasonable rate of return and to be a more pedestrian CEO – doing a good job and then trying to go out there and do a great job. So I don’t think there were any rewards, only penalties associated with getting on everybody’s radar and coming up to the surface.”

In other words, he appropriately regrets trading humility for hubris, corporate loyalty for faux fig wreaths. He aspired to be great rather than merely good, and in the full glare of public resentment he ended his career by losing both greatness and goodness.