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E-mailSoldiering through the financial crisis has clearly changed the way CEOs view life in the corner office. The number of chiefs who say the top job is more rewarding today than it was three years ago plummeted to 38 percent, down from 60 percent last year and at the lowest level it’s been since the survey began asking the question. Virtually all CEOs — 98 percent — say the job is more time-consuming than in the past. Although business leaders outside the U.S. have traditionally viewed the CEO role as more rewarding than their U.S. counterparts do, this year only about half of them report feeling that way.
“While it remains very fulfilling to lead a company, the chairman and CEO roles carry a great deal more scrutiny,” says Alan Boeckmann, chairman and CEO of Fluor Corp. (FLR). “Also, a significant amount of liability stems from constant legislative changes and negative public perceptions toward business in general.” For instance, Boeckmann cites the “never-ending changes and new accounting interpretations that move us further and further away from true cash flow accounting and more toward what some might call politically based accounting.”
Yet regardless of whether corporate America is in or out of favor with the public, Ed Fritsch, president and CEO of Highwoods Properties Inc. (HIW), says he tries to remain a “credible cheerleader” for his company. “You can’t candy-coat things,” says the chief of the Raleigh, N.C.-based REIT, “because then people will lose confidence. As CEO, my job is to deliver a sincere and accurate message to all stakeholders about what’s happening within our company.”
One group that CEOs say they are spending more time with is their board of directors. Sixty-five percent of respondents say that “reporting to the board” and “working with the board” are consuming more of their time today than three years ago. “I communicate with directors at my company every day of the week,” says Jerre Stead of IHS. “Thirty years ago it was about three times a year.” Setting strategy, managing risk and securing capital and financing are also taking up more of a CEO’s calendar. Getting less time are day-to-day management, media relations and workplace diversity initiatives.
Michael Earley, chairman and CEO of Metropolitan Health Networks Inc. (MDF) in West Palm Beach, Fla., believes there’s a bottom-line cost to such time allocation. “We spend so much time dealing with compliance, SOX and regulatory issues with the board that there’s just less time for innovation and strategy, and that’s not good for the company in the long run,” he asserts.
Executive Pay
For the first time, CEOs were asked to talk about changes to their company’s executive compensation plans. And more than half of the U.S.-based chiefs say they faced adjustments in the past year, compared with 36 percent of non-U.S.-based CEOs. The compensation change by far most often reported by CEOs involves salaries. Sixty-three percent of business leaders say executive salaries at their company were either frozen or cut during the past 12 months, compared with just 14 percent who say there were salary increases. More than half report that raises have been cut or eliminated, and 47 percent say they’ve done the same with bonuses. Scott W. Smith, CEO of Houston-based Vanguard Natural Resources LLC (VNR), believes language is partly to blame. “The word bonus has come to mean reward, and when stockholders are watching what’s happening to profits and share prices, they’re not happy about giving out rewards,” he says. “Take salaries up to reasonable levels, and there won’t be these huge bonuses at the end of the year and the debate over whether people are entitled to them.”
When it comes to stock options and restricted stock grants, fewer CEOs say there’s been much change, with 30 percent reporting that options have been cut or frozen.
