It’s lonely at the top, and apparently fewer and fewer executives want the experience.
According to a new survey by Burson-Marsteller, a whopping 73 percent of chief executive officers said they have thought about quitting. Only 54 percent felt that way in a survey by the consultancy in 2000, the year before the Enron scandal heightened scrutiny of management’s daily practices.
Sitting CEOs are not the only people who find the position unappealing. When asked if they’d like to be CEO today, 35 percent of the other senior executives said they would turn down the offer. Though this figure is lower than 2002’s 54 percent, at the height of the wave of corporate scandals, it’s still higher than the 27 percent in 2001, when Enron was not the poster company for the new millennium’s misdeeds.
“Reluctance to accept the top slot comes at a time when corporate America is in need of more than a few good CEOs,” said Patrick Ford, chair of Burson-Marsteller’s Corporate/Financial Practice. “Like it or not, successfully restoring trust in corporate America lies in the willingness of upcoming qualified CEOs to take risks, roll up their sleeves and restore the reputation of the office.”
What worries CEOs the most? Worrying about the competition (86 percent), growth (81 percent), and increasing shareholder value (80 percent) top the list.
Having sufficient time to prove themselves is another source of stress and concern among CEOs. According to the survey, top executives feel they have about nine months to earn employees’ trust and to develop a strategic vision and 14 months to execute on promises made during their first 100 days. The survey also found that CEOs are expected to spend 60 percent of their time on execution and 40 percent on strategic vision.
For its 2003 study, Burson-Marsteller surveyed 1,040 CEOs, other senior executives, financial analysts, institutional investors, business media, government officials, and board members on issues relating to CEO and corporate reputation.
Interpool Names CFO Amid Accounting Probe
Interpool Inc., which is being investigated by the Securities and Exchange Commission for accounting irregularities and plans to restate two years of financial reports by year-end, named a new chief financial officer.
James F. Walsh, a former executive of GE Capital who recently was president and chief financial officer of C-S Aviation Services, will become Interpool’s CFO, effective on or before April 1, 2004.
Until Walsh’s appointment as CFO becomes effective, he will serve as executive vice president, finance, for Interpool, a supplier of equipment and services to the transportation industry. Richard Gross will continue to serve as Interpool’s interim CFO — with responsibility for the restatement of the company’s financials for 2000 and 2001 and the preparation of the 2002 results, which still haven’t been released.
Gross will become chief operating officer for Interpool’s international container division once Walsh assumes his CFO duties.
Walsh joined C-S Aviation Services as CFO in 1998 and served as its president and CFO from 2000 to 2003. He began his career with General Electric’s Financial Management Program and also served as CFO for GE Capital’s Polaris Aircraft Leasing Corp. and its successor, GE Capital Aviation Services, for more than eight years. While with Polaris, he was responsible for public reporting and related compliance for five public income funds managed by Polaris.
In July the company announced that its chief financial officer, Richard Gordon, resigned to become president of Morpheus Capital Advisors, an investment banking boutique.
At that time, the company said that Gross, then senior vice president of finance, would serve as interim chief financial officer until a permanent CFO was named. Interpool also announced that it would further delay the release of its audited financial statements for 2002 and its restated financial statements for 2001 and 2000. The company added that its audit committee hired a special outside counsel, Morrison & Foerster, to conduct an inquiry into the causes of the incorrect accounting treatment that required the restatement.
In October, Interpool announced that the SEC opened an informal investigation into accounting problems that required it to restate 2000 and 2001 results and that delayed the filing of its 2002 annual report.
On Tuesday, the company said that it hopes to file its 2002 annual report before December 31 of this year. It also reiterated that its restatement is still expected to amount to less than a 2 percent change in stockholders’ equity as of December 31, 2001.
Friedman’s CEO Resigns
Jewelry retailer Friedman’s Inc., which is undergoing its own accounting investigation, announced that CEO Bradley Stinn resigned from the company and its board of directors. He is the second top executive to leave the embattled company in recent weeks.
The board of directors elected Robert Cruickshank, who has been a directory since 1993, as non-executive chairman and appointed Richard Cartoon interim financial consultant. Cruickshank and Cartoon, along with Douglas Anderson, Friedman’s president and COO, will form an “office of the chairman” that will oversee the day-to-day operations of the company.
Cruickshank has been a director since 1993. Cartoon, who has more than 28 years of financial and strategic experience, has served for the past two years as executive vice president and CFO of Lodgian Inc. Stinn has agreed to cooperate with the company and its audit committee during a transition period.
The company also announced that it has suspended its dividend.
Last month CFO Victor M. Suglia was placed on leave by Friedman’s after the company announced it would restate its results back to at least fiscal 2000 due to concerns over its accounting of bad debt and losses. In addition, the company’s auditor, Ernst & Young, withdrew its audit opinions on previously filed annual financial statements.
The SEC and the Justice Department are currently investigating the company.
On Wednesday, Friedman’s stock closed down more than 5 percent after dropping as much as 10 percent during the day.
Boardroom Comings and Goings
Roy Disney is not the only director in recent days to be forced to step down because he reached a mandatory retirement age.
Last week Home Depot announced that William S. Davila, 72, president emeritus of The Vons Cos. Inc, and a member of Home Depot’s board of directors since May 1999, had reached the company’s mandatory retirement age. As a result, Davila is not eligible to stand for re-election at the completion of his term in May 2004.
The home improvement retailer also announced Richard A. Grasso, former chairman of the New York Stock Exchange and a member of Home Depot’s board since February 2002, confirmed his June 2003 decision not to stand for re-election in May 2004.
Home Depot requires every board member to stand for re-election by shareholders every year.
Meanwhile, Disney’s board of directors elected John S. Chen — chairman, CEO, and president of Sybase Inc. — as a new independent director, effective January 2004.
“From a strategic perspective, some of Disney’s most significant long-term growth opportunities reside in the smart use of technology, and John will help the board ensure we’re steering the company in the right direction,” said Michael Eisner, Disney chairman and chief executive officer, in a statement.
Chen joined Sybase as president in 1997 and is credited with engineering that company’s turnaround and sustained growth and profitability. He assumed the role of chairman and CEO of Sybase in 1998.
- Non-farm business productivity — that is, worker output per hour — was revised upward to a 9.4 percent annual growth rate for the third quarter, according to the U.S. Department of Labor. This is the highest rate since the second quarter of 1983.
- The U.S. Supreme Court ruled on Tuesday that an employer does not violate a federal law protecting the disabled against discrimination by refusing to rehire a worker fired for illegal drug use, but who has since been rehabilitated, according to Reuters. The justices unanimously said a U.S. appeals court used the wrong analysis in ruling against Raytheon Co.’s Hughes Missile Systems Co., which has a policy against rehiring workers who leave for violating workplace conduct rules, the wire service added.
“The court of appeals ignored the fact that [the firm’s] no-rehire policy is a quintessential legitimate, non-discriminatory reason for refusing to rehire an employee who was terminated for violating workplace conduct rules,” wrote Justice Clarence Thomas in the opinion, according to the report.
- Household Finance Corp. issued $1.5 billion in five-year global notes, up from an originally planned $1 billion. Led by HSBC Securities, the issue was rated A1 by Moody’s and single-A by Standard & Poor’s and was priced to yield 4.189 percent, or 78 basis points over comparable Treasurys.