FOOL ON THE HILL
CEOs Have Cooties

The CEO title has been tarnished in recent months. The fact that smart people are doing dumb things is almost as troubling as the fact that it's rich people committing petty thievery. Is it too late to save the CEO moniker? Let's hope not.

Format for Printing

Format for printing

Request Reprints

Reuse/Reprint

By Rick Aristotle Munarriz (TMF Edible)
August 2, 2002

Pardon my retro hiccup here, but am I the only one who remembers the age-worn debate on what should reign paramount -- a CEO's devotion to shareholders or employees? Either way, it seemed as if a CEO's agenda of self-interest would rank a distant third.

Then came Enron. Then came a spate of stories about CEOs abusing everything from corporate jets to lush company-sponsored residential digs. The large salaries were always a bone of contention, beaten hard like a steady drum through decades of labor disputes and the occasional case of flat-out envy, but at least it felt that, in many cases, the sums were well earned. But then these mostly overpaid corporate leaders began hitting up their companies for loans and shipping empty boxes to New Hampshire to skirt New York sales taxes.

Integrity used to mean so much more. Now it's just a matter of time before someone coins the word outegrity.

In Big Business, Big Evil? four months ago, I came to the defense of CEO ranks being targeted as villains in everything from rap music to video games. "The one profession being blasted for having so much control is also the only one powerless to act when it is being disgraced," I wrote. Band together, I urged. Hire an image consultant. But now that Enron was just the tip of the iceberg, does any company chief want to come over for dinner? I'll be serving crow.

I'd like to think that crooked CEOs are like pedophiliac priests. Sure, it's a serious problem that needs to be reckoned with, but it's not as widespread as the media would lead one to believe. In either case, the painful purge and rewriting of the appropriate code of conduct will make the group stronger in the long run.

Still, it's awfully hard to praise the creators of wealth when they're willing to destroy everything for something so insignificant. Why would Martha Stewart risk the fate of Martha Stewart Living Omnimedia (NYSE: MSO) over a wee bit of insider trading -- or what they call "interior decorating" in Martha's world? Why would Tyco's (NYSE: TYC) deposed CEO Dennis Kozlowski attempt to cheat the taxman by sending fine art to his New York home, while using bogus transactions to Tyco's New Hampshire office as a front to avoid sales tax? All this while being hounded for years by noted bear analyst David Tice over the possibility of accounting irregularities at Tyco itself? Giving up so much for alleged acts of theft so petty -- it won't be long before someone engraves "CEO Winona Ryder" on a mahogany desk plate.

It's just getting too easy to bash the top brass. On Fortune.com last week, an article singled out ridiculous CEO Perks That'll Drive You Berserk. This is Fortune we're talking about, a magazine named after the very art of accumulating great amounts of wealth. It's just a matter of time before the media dubs over Gordon Gekko's Wall Street creed, "Greed is good. Greed is right," with "Greed is so-so," just to avoid upsetting the movie-viewing audience.

The CEO title has gone from revered to reversed. It's the fiscal equivalent of the cooties. The guy wolfing down bald eagle at the local buffet won't even come to the aide of this endangered species for fear of being politically incorrect. Before you know it, folks will be demoted to CEO.

I hear you, though. You're saying it's not just the CEOs abusing the system. Athletes do it, too. When millionaires on the field throw it all away by latching on to drugs, we assume they don't have a firm grasp on reality because success came all too soon.

But things are different for CEOs who allegedly worked their way to the top. CEOs have a corporate ladder to climb, only the rung of ethics is apparently missing on a few.

The lesson in moral fortitude need not be long. Thanks to Hollywood, you can whittle it down to five seconds' worth of sound bites from two epic movies: E.T. telling Elliott, "Be good" -- then Capt. John Miller's last words to Private James Francis Ryan in Saving Private Ryan, "Earn this."

Be good. Earn this.

Four words. Four meaty words. But until that happens across the board, I'll just brace myself to mutter another four words when I hear the next CEO has soiled his reputation: Say it ain't so.

Rick Aristotle Munarriz doesn't really think that Winona Ryder would make a good CEO. Then again, stranger things have happened. Rick's stock holdings can be viewed online, as can the Fool's disclosure policy.