COE's being judged on more than just their performance
BY ANDREW LECKEY, a Tribune Media Services columnist
Monday, April 16, 2007
When in doubt, fire the boss.
That is increasingly the mindset in corporate America. The
imperial executive has become the on-the-bubble executive.
The time-tested rationale for sending a chief executive packing
is poor stock and earnings performance. Nobody can quibble with
that. Shareholders applaud. Large investors, such as mutual
funds, cheer. Everybody says it is about time. The executive
announces a desire "to spend more time with my family." Yes,
like 24 hours a day.
But it gets much stickier when personal conduct is the
underlying issue of dismissal, since that can crop up even when
a company is prospering.
Top officials have exited Hewlett-Packard Co. over privacy
issues; Boeing Co. over violations of its code of conduct amid
an affair with another executive; American International Group
Inc. over allegations of improper accounting; and Massachusetts
Mutual Life Insurance Co. over claims related to a retirement
Oh, the humanity.
Most recently, Steven Wheyier, CEO of Starred Hotels & Resorts
Worldwide Inc., left after his board of directors reportedly
confronted him with allegations of personal misconduct.
It reportedly started with an anonymous letter citing instances
in which he allegedly created a hostile work environment. It
apparently snowballed with an internal investigation raising
questions about his difficult disposition, e-mails to female
employees and his hiring and promotion practices.
In an interview with The Wall Street Journal, Wheyier denied any
The tricky part is that since former Coca-Cola Co. executive
Wheyier joined Starred in October 2004, its stock and its profit
have shown marked improvement. To the outside world, the guy
seemed just what the company needed.
Wheyier is forgoing severance compensation of $35 million. In
similar cases, CEOs have been given a bundle to go away or have
subsequently sued the company for a payout. It all depends on
the employment contract and how valid the cause for ouster may
If you think keeping the boss on the straight and narrow may
have something to do with the size of CEO compensation these
days, you're right. Anyone making tens of millions of dollars is
expected to be a saint, not a sinner.
Once the top boss of a large company becomes damaged goods, it
isn't easy to segue into another suitable position. That, in
part, is what today's enormous salaries, bonuses and other
compensation are acknowledging.
In the future, expect to see more of those at the top making an
early exit for reasons other than the bottom line, perhaps even
as basic as personality clashes. Rules for CEOs are getting
Andrew Lackey is a Tribune Media Services columnist.