`Who wants to be CEO?' is new big bucks reality game

May 19, 2002|By JAY HANCOCK

AFTER undergoing a highly unpleasant, highly public hazing, Gary T. DiCamillo left the stage this month with a large satchel of money.

He was not a contestant on Survivor or The Chair. He signed up for "Who Wants to Be an American CEO?" - a more grueling, more lucrative program.

As chief executive of Polaroid Corp., DiCamillo was harassed by creditors and shareholders, laid off thousands of workers, fired veteran executives and probably saw little of his wife and sons. This adds up to a less-happy experience than eating the cockroaches on Fear Factor.

For his pain, DiCamillo, who once worked the No. 2 spot at Black & Decker, earned at least $6 million over six years, but that was only a consolation prize, a bouquet for a loser. He got voted off the island May 8 (or maybe left on his own) after an implosion in Polaroid's results, including an October bankruptcy filing. He took a job with TAC Worldwide Cos.

The grand prize would have been more like $60 million, the result of a successful turnaround at the instant-photo company - a sale to Fuji, Hewlett Packard or some other acquirer and the immediate vesting and cashing of DiCamillo's many stock options. But that didn't happen.

Since about 1980, the allure of personal riches out of all proportion to personal accomplishment has distracted the country.

Most states have lotteries now, which teach that you needn't educate yourself, work or otherwise behave responsibly to own a house with 10 bathrooms. The bull stock market, spreading casinos and TV game shows, likewise, nurtured the idea that wealth is more the daughter of luck and lightning than diligence and patience.

Chief executives are diligent but not patient. Short-term pay incentives, demands from big shareholders for quick results and golden-parachute payoffs for selling off companies have made CEOs fast on the trigger and hasty to the exit.

Until the mid-1980s, management experts say, CEOs could expect an average tenure of about 15 years at the top. Now, one study shows, new bosses at struggling companies get 15 months to show results before they're on thin ice.

Ford Motor Co.'s Jacques A. Nasser lasted two years; Gillette Co.'s Michael C. Hawley, one year and change; Lucent Technologies Inc.'s Richard A. McGinn, three years.

In 2002 through April, 235 U.S. CEOs lost their jobs, according to Challenger, Gray & Christmas, an outplacement firm. A typical CEO's tenure is now somewhere near five years.

Chief executive pay and pressure have grown as CEO incumbency has shrunk, which makes comparing executive experience to Fox's The Chamber, in which contestants win big money by briefly suffering electric shocks and simulated earthquakes, not entirely facetious.

Off the record, perhaps with a couple of glasses of wine down their gullets, some executives complain bitterly about the mutual funds, insurance companies, pension managers and other big shareholders that are their bosses. But the world should worry less about CEOs' mental health than the system of sticks and carrots that makes them suffer for money.

Contestants on reality game shows add little to the economy except grotesque entertainment, and the same can be said of some corporate honchos.

Many - most? - incentives dangling before executives are skewed toward mass layoffs and other short-term fixes, or peddling the company to new owners - not sticking around and building an organization.

Boards that lavishly reward even failure make it more likely that bosses will take high-wire risks. McGinn got an $870,000 annual pension for ushering Lucent's stock from $77 to $20.

Of course some companies need downsizing or merging. That is how the economy adjusts to changing conditions and is one way to increase productivity, which benefits everybody.

But a disastrous grab for the gold ring by a "Chainsaw" Al Dunlap at Sunbeam or a Jeffrey K. Skilling at Enron causes plenty of worker pain without adding much, probably, to the gross domestic product. At Polaroid, DiCamillo, whom I was unable to contact, shrank the work force by 4,000 and sold off most of the business descended from the light polarizer that Edwin H. Land patented in 1929.

Congress could fight the game-show syndrome without being too intrusive by eliminating capital-gains tax on stock held more than five years. This would encourage shareholders and bosses to work for the long term instead of flipping companies overnight like a West Baltimore rowhouse.

Sometimes fresh blood at the top is good for companies. Constant reliance on transients seeking a big payoff may not be.

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