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As such shifts become more common, many companies are taking extra pains to keep their executives happy. To protect its executives from high taxes on immediate income, U.S. Plywood-Champion Papers, for one, has taken to offering them deferred compensation. One of the best at holding onto its executives is General Motors, which is forever shifting them into new jobs. But not even the best can avoid losing an occasional man, as evidenced when Executive Vice President Semon E. ("Bunky") Knudsen, passed over for G.M.'s presidency, quit last winter to become president of Ford Motor Co.
Men of Stature. G.M. could hardly be happy about losing a top man like Knudsen, just as Motorola was understandably distressed about losing Hogan. Yet, whatever the merits of Motorola's suit against Fairchild, the danger of executives carrying corporate secrets to a rival is generally not as great as it seems. Despite the secrecy fetish that Detroit makes about new models, almost everyone admits that automakers usually know all about one another's most guarded projects. It is often the same way in other industries. Says Michigan State's Jennings: "A secret is only a secret for a year or so anyway. And top executives seldom know intimate technological secrets."
Sometimes the biggest losers in the game of corporate musical chairs are those companies doing the hiring. By finding room at the top for outsiders, they risk discomfiting homegrown executives who are passed over in the process. Says Los Angeles Management Consultant Thomas J. Johnston: "Much depends on who you bring in. If the man has stature that everybody recognizes, you have no problem."
Most companies, obviously, are looking for men of stature. In any case, the danger of dissension in the ranks seldom seems great enough to warrant calling off the search. Executives who find themselves passed over always have the option of switching employers themselves. For companies hurt by such job jumping, there is always consolation in the fact that the practice can cut both ways. A case in point is Chicago-based Bell & Howell, whose executive vice president, William Roberts, left in 1961, to become president of Ampex Corp., taking several colleagues along with him. Casting about for vice presidents earlier this year, Bell & Howell went to Ampex and hired back two of its former men. Ampex's Roberts, now 53, is hardly in a position to complain.