Are you worth $40,000 an hour?  How can you be worth $40K per hour?  That’s the question people often ask of the top public speakers, the keynoters, the ones who have written bestsellers and whose names you probably know. 

In fact, celebrity speakers, like former presidents and prime ministers, make considerably more -- $100, 000 - $250,000 per speech.  Malcolm Gladwell, with bestsellers like Blink and The Tipping Point to his credit, asks $86,000 per speech.   President Reagan was famously paid $2 million for a speech he made shortly after leaving office.

But still, $40K per speech?  How can that be justified when the minimum wage is $7.25 per hour? 

Three points about that apparently obscene compensation.  First of all, the hour you see is not the whole story.  To get to that stage, a speaker at the $40K level has to have written one or more books.  That speaker has to have achieved success in her field, enough so that the public wants to hear about it.  And that speaker has to create the speech, rehearse it, and travel for days to hard-to-reach places in uncomfortable airplane seats to get to the venue, where she has to try to please a roomful of strangers so that the whole process can begin again.  In fact, there’s a lifetime of hard work leading up to that golden hour in the spotlight. 

Second, $40K is the cost of a coffee break at a moderately funded conference for 500 people or so.  Most of the money – a million or two – for that conference has gone to the venue, for room and board.  The entertainment is a relatively small part of a typical meeting budget.   

Finally, if you’ve ever been inspired by a speaker to change your thinking – or your life – you know that a speech can indeed get people thinking and doing in new ways.  Speeches can topple governments, launch careers, and inspire movements. 

Speeches can change the world.

And that’s worth $40K an hour.  That’s why the market pays it.  Every time. 

Comments

[Nick Morgan]

Hi, Amanda --

Thanks for your comment. You suggest a great post -- stay tuned!

[Amanda Wang]

Hi Nick! Great post — I'm beginning to understand that it's not just the talk that you take into consideration but everything that has led up to those 60 minutes. Do you have a post or any suggestions on how someone starting out comes up with a speaking fee, or the kind of questions to ask in order to figure it out? Always love your posts. They're so helpful! Thanks Nick!

[Nick Morgan]

Hi John --

Thanks for the great story, even if apocryphal. True mastery is the sum of all your experiences to the present moment.

[John Zimmer]

A nice post, Nick. Reminds me of the (apocryphal?) story of Picasso.

Picasso is siting in a small restaurant enjoying a meal with friends. A wealthy woman at another table spots him and decides to get him to do a quick portrait.

"Mr. Picasso," she says, "I am a great admirer of yours. I absolutely insist that you do a drawing of me and I won't take no for an answer."

Seeing that she won't be put off, Picasso gets some paper and a pencil and does a quick sketch of her in 2 or 3 minutes. He hands her the drawing.

"Beautiful," she says. "How much do I owe you?

"It's no charge, Madam," Picasso replies.

"Mr. Picasso, I absolutely insist on paying you for your work!" she says.

"In that case, Madam, the price is $5,000," says Picasso.

"$5,000!" she exclaims. "But it only took you 2 minutes to draw it!"

Picasso smiles and says, "No, Madam, it took me all my life to draw it."

Cheers!

John

[Nick Morgan]

Hi, Richard --

Thanks for the comment, and the point. Here's a link to Richard's blog about Neil Gaiman speaking to junior high school in Minnesota and a Republican legislator taking exception to his fee: http://bit.ly/ihMjYC.

[Richard I. Garber]

When the speech is paid by state funds politicians may complain loudly about paying that market rate, as they did in Minnesota about Neil Gaiman. See my May 17th blog post, What does a $40,000 speech sound like.