Pardon our optimism, but there are growing signs that the era of the imperial CEO is coming to an end. A value shift is much needed in the corner office, with modesty replacing celebrity, teamwork replacing ego, longevity replacing brevity of office, and fair compensation replacing getting rich quick. What started as anger against CEOs from Enron, WorldCom, and other scandal-ridden companies has now spread. CEOs who were successful without cheating, but with outsize egos and compensation, now appear selfish and unseemly. Witness the reaction to Jack Welch's recently disclosed retirement perks, which strike most as generous to a fault. Paid incredibly well for a job well done at General Electric Co., he received a very rich pension and appears to have been compensated yet again for living expenses ordinary folks pay out of their own pocket. In today's new climate, the games CEOs and their boards once played no longer are accepted.
At a time like this it's important to underscore what should be obvious: that there are plenty of good CEOs who play by the rules. They do good for shareholders and employees while being ethical and responsible. What sets these executives apart is a willingness to defy Wall Street's pressures, a long-term commitment to the company, a self-effacing approach to the job, and a measured view of their worth.
The good-guy CEOs, by and large, don't use a Wall Street-style financial model to pump up their companies' performance. They don't count on huge numbers of mergers and acquisitions for quick revenue expansion. Instead, they look to internal, organic growth to boost profits. BusinessWeek focuses on six of them.
The good CEOs innovate a lot, but mostly from within. They favor incremental improvements over time and watch the pennies. They don't engage in fancy financial engineering, either; their balance sheets are relatively clean. These CEOs get paid well, but it won't make them billionaires. Their boards give them stock options but in relatively modest amounts. These CEOs are also loyal. They aren't free agents jumping from one company to another. A CEO in 2001 was in office an average of three years. The good CEOs have been at their companies far longer.
In a post-bubble, post-September 11 America, this set of chief executives provides a collective role model for the new group of leaders who are beginning to replace the old guard of the '90s. They exhibit restraint, commitment, and fortitude. They instill trust. They are examples for the future.