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When David Maxwell became CEO of
Fannie Mae in 1981, the company was losing $1 million
every single business day. Over the next nine years, Maxwell
transformed Fannie Mae into a high-performance culture
that rivaled the best Wall Street firms, earning $4 million
every business day and beating the general stock market
3.8 to 1. Maxwell retired while still at the top of his
game, feeling that the company would be ill served if
he stayed on too long, and turned the company over to
an equally capable successor, Jim Johnson. Shortly thereafter,
Maxwell’s retirement package, which had grown to
be worth $20 million based on Fannie Mae’s spectacular
performance, became a point of controversy in Congress
(Fannie Mae operates under a government charter). Maxwell
responded by writing a letter to his successor, in which
he expressed concern that the controversy would trigger
an adverse reaction in Washington that could jeopardize
the future of the company. He then instructed Johnson
not to pay him the remaining balance—$5.5 million—and
asked that the entire amount be contributed to the Fannie
Mae foundation for low-income housing.22
David Maxwell, like Darwin Smith and Colman
Mockler, exemplified a key trait of Level 5 leaders: ambition
first and foremost for the company and concern for its
success rather than for one’s own riches and personal
renown.
There is perhaps no more corrosive trend
to the health of our organizations than the rise of the
celebrity CEO, the rock-star leader whose deepest ambition
is first and foremost self-centric. Read more from The
Misguided Mix-Up of Celebrity and Leadership.
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