Re: Job Titles and Job Banding

Thanks for your message. I do think we need to talk this through. In the
meantime, though, let's not make anymore VPs until this is resolved. As I
said in my original message, I am not looking to undo what has been done, but
to make sure we don't do it again unless the process is followed.

I understand that there are significant title differences across the regions
we operate. In fact, one of the people in my organization who did not make
VP is Dennis Vegas, who has done an extraordinary job in Latin America.
Notwithstanding his regional focus (and the significance of a VP title in his
region) he was put through the company wide process and he, David Haug, and I
submit, everyone else on the Exec Comm, understood that every new VP would go
through the same process regardless of regional assignment (with the
exception of certain joint venture companies). But, I maintain that we need
some consistency in the VP title in particular -- i.e. that it remain an
Enron-wide title, granted only through the PRC process. Though I don't
personally feel this way, for many people in the organization the VP title
means something separate from the compensation structure; it implies
something like "making partner" in a legal or consulting firm. Making that
cut should not vary based on where you live or what region you support.

I also understand the point about needing a certain title for external
purposes. In my organization we are dealing with very title-conscious
elected officials and media. I can make the case for every one of my
directors and senior directors that they would be more effective externally
if they carried a more senior title, regardless of any change in
compensation. As an executive committee, we elected to make such an
exception only for "legacy" title holders -- i.e. people who had previously
made VP outside the process. Everyone in my organization

To: Cindy Olson@ENRON, Steven J Kean@EES
cc: Sanjay Bhatnagar/ENRON_DEVELOPMENT@ENRON_DEVELOPMENT
Subject: Job Titles and Job Banding

From reading the e-mails on the issue regarding Regional Vice President at
Enron India, it sounds like there will be more discussion on this issue. I
know that issues like this generally come up at the Enron ExCom level. There
are a few issues that need to be kept in mind, and although Cindy and I have
discussed these in the past, I have not had an opportunity to pursue them
further (but would be happy to help out on this). I have noticed these not
only in India but also in the other international settings where I have
worked for Enron during the past several years.

1. International job titles and domestic job titles do not correlate. For
example, in India, the title "Director" implies a very senior person within
the organization (well above VP), whereas in the Enron domestic world, it is
a position below VP. "Managing Director" within Enron is below the most
senior levels, but in India a MD is the Ken Lay equivalent. For this reason,
I cannot use Managing Director in my title or on my business card, although
this is my title for Enron Houston purposes.

2. Job titles are much more important in an international setting than in a
domestic setting. For example, in Houston, we have people at the director
(and probably manager) level who lead deal teams and bring deals to
successful closing. In an international setting, particularly India, to get
to the decision-makers in your counterpart organization, an officer title of
VP or above is very often required. To a certain degree, this is form over
substance, but that's what works over here.

3. To solve some of these problems, Enron should consider doing what some
other international companies have done (and I think Cindy and her team may
already be working on this). A job banding study should be done and based on
responsibilities, everyone globally should be placed in a band. It would not
be a title band of VP or director or manager, but rather a band with a
non-title classification. I hate to suggest a band with numbers, such as 1
through 15, because that sounds way too much like the government, but
something like that would work. Once this is done, communication is made to
employees that the band is what is key in determining their compensation and
level within the organization. Then, the business units can rely on their
particular market dynamics or on what their competition is doing to determine
job titles. Thus if the Global Origination group needs to have a title of
Senior Trader and EECC needs a title of Project Leader and Enron India needs
a Regional Vice President, all can be accomplished while keeping these same
people at a consistent level for global Enron purposes.

I will be happy to discuss this further with any of you. Plus, I will
volunteer to participate in finding a solution that works for all of Enron
while taking into account the specifc business unit and/or global function
needs.

Wade