OPINION
Time to Ring the Alarm on Tech Exec Exits?

Here's a news story you will not be reading anytime soon:

Executive X announced he was resigning his position at Technology Co. Y because the firm couldn't afford to pay him enough to stay. "It just wasn't worth it anymore," X said. "Laying off people is no fun, and this Enron thing has everyone worried we'll go bankrupt if our accountants don't use a Number 2 pencil to fill in the audit sheets. Frankly, I've thought it through and decided I'm better off playing golf."

Never happen, of course. But how refreshingly honest it would be.

After all, executives like Amazon's (Nasdaq: AMZN)Warren Jenson, Sun Microsystems (Nasdaq: JAVA)' Ed Zander and AOL Time Warner's Gerald Levin all are likely connected in some way to that central theme.

They may all deny it and cite personal reasons or other opportunities, but the fact is they can't see the light at the end of the tunnel. And without compelling proof that things are getting better, why stay on the train?

Time To Worry?

The bigger question is whether their exits are cause for alarm. And the answer is no.

These executives aren't leaving because they think tech companies have had their heyday and are unlikely to recover past profitability, stock market heights or market share.

They're leaving because they know that's not going to happen overnight. Maybe not even for a while.

Complex Math

Not that these people boil everything down to a matter of money, but the basic equation is simple: If they're going to give their hearts, souls and nearly all of their time to their companies, the payoff should be substantial.

If they're going to be the ones quoted when the company lays off a few hundred workers, the ones who represent the company when Enron-echo accounting questions are raised, they ought to be rewarded handsomely for it.

But right now, and for the foreseeable future, big-time paydays for tech CEOs are just not in the cards.

Companies get a little squirmy in their seats when they have to read headlines like the one that said E*Trade (NYSE: ET) CEO Christos Cotsakos' salary and bonus pay more than doubled in 2001 even as the company saw an operating profit in 2000 give way to a loss of US$241 million in 2001.

They get downright antsy when investors and employees read that he also had $15 million in loans forgiven and some extra stock tossed in for good measure. And it's especially unnerving when other brokerages are laying off workers.

You Could Be Next

Look at it from their perspective. Let's say you're the CEO at a tech firm and your morning Wall Street Journal, in addition to carrying news about fellow CEOs being lambasted on witness stands, has a brief about your counterpart at Priceline (Nasdaq: PCLN)receiving no salary at all in 2001. That's none, as in zero.

It might be enough to make you spill your latte on your Brooks Brothers suit, even before you read the part about the 750,000 stock options he was granted. It might even be enough to make you rethink your long-term plans.

And as you contemplated, you'd probably have to admit to yourself that before you bet on a quick and robust turnaround in tech spending, you might as well bet on winning the lottery. All signs point to a sluggish pace for at least the next few quarters.

A few quarters. In corporate time, that's the equivalent of 10 years.

By then, investors could be marching on your office, or you could have the unenviable task of heading into an annual shareholders meeting with your stock at an all-time low, like storage giant EMC (NYSE: EMC) does this week.

Portable gallows rentals are reportedly on the rise, you hear, swallowing hard and making plans to be out of the country when the shareholders gather.

Upside Too Drawn Out

Upside potential remains. It's just going to take a bit longer than many CEOs and other executives are willing to wait.

Consider: Amazon's Jenson had the wisdom and foresight to announce his resignation just after Amazon's first profit report. He went out on a relative high note. He'd probably have had to wait until the fourth-quarter report next year to do that again. Why wait and risk an even worse downturn?

For many others, there is little glory in going out now. But it beats hanging around and risking having to oversee more layoffs, more bad news and, dare we say it, a pay cut.

Payment a Problem

No one had a problem paying executives when times were good. And everyone recognizes that their departure en masse is a problem for technology companies, which need smart, capable leaders now more than ever. The problem is what to use to keep them from straying.

Some companies have the luxury of valuable stock. Meg Whitman was out-earned in terms of salary by some of her charges last year, but the fact that she still owns about 3 percent of eBay (Nasdaq: EBAY) stock -- the company has a $14 billion market cap -- probably more than makes up for that discrepancy.

For most other executives, even a tractor-trailer full of stock options isn't enough to change their minds once they realize that the light at the end of the tunnel -- which we've been talking about for well over a year now -- doesn't seem to be getting any closer.

What do you think? Let's talk about it.