CEO reputations are still taking a beating.  The media are looking at balance sheets, then looking at executive compensation packages, and doing a double take.     

A recent report from the Associated Press found that yes; CEOs are taking a hit from the recession — less total compensation, smaller bonuses, and some nearly worthless stock options — however their companies are already making adjustments that could mean their compensation bounces back in the near future.  

This is not sitting well with the media.  In journalism they call this a story with “legs.”  It won’t go away.  It provides constant fodder for the television and radio pundits, as well as the print and online media and the bloggers.

And here’s what’s really interesting.  They don’t differentiate between companies or CEOs.  A CEO can be doing the right thing, reducing pay and perks significantly, and he or she will still get lumped in with every other executive.

Long range, I don’t know how much CEOs are concerned about this.   It is worth considering the impact this will have on the individual CEOs ability to bring a company through the recession, drive change and take advantage of market opportunities.  A leader has to have the ultimate respect and admiration of employees, stockholders, and the media drives perceptions.

Here’s the thing.  When the average American sees that a company is profitable, hiring people, and strengthening the U.S. and global economy, they really don’t care.  And the media usually doesn’t mention it except when they put together the highest paid CEO lists.   

But when times are tough this feeds the drumbeat of negativity about CEOs in the media.

Here are the facts.

·         The median pay package for CEOs of companies in the Standard & Poor’s 500 Index fell 7 percent to $7.6 million in 2008.

·         The potential hit to their pocketbooks could be even larger if stock prices don’t rebound.

·         One clue: 90 percent of the $1.2 billion in CEO stock options granted last year are “under water,” meaning the current stock price is too low to yield a profit, the AP analysis shows.

·         However, boards are trying to cushion the blow. The AP found that some have changed the rules to make it easier for executives to qualify for bonuses. Others are doling out more stock options, which give executives the right to buy shares in the future at prices locked in today.

·         Four of every five CEOs took home a cash bonus in spite of the fact that the stock prices of the companies in the survey fell by an average 36 percent and profits fell 31 percent. 

·         And the survey found companies remain largely generous with perks.  As the AP reported, these are unfathomable to the average American worker, chauffeured cars, body guards, club memberships, financial planning services and free travel in company jets.

If you’d like to read more, click here for WCVB TV’s Project Economy.

Also don’t forget our special offer until May 15^th.  Read on to the next blog entry for details.  This is a fantastic way for you to easily to get a copy of both books for the price of one.  Just remember to copy and paste your confirmation number from Amazon.com and send it to mconnor@bates-communications.com with all of your info: name, address, title, company, phone and email so we can send it to you and reach you if we have any questions!

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