Twilight of the CEOs’ Day
With much fanfare, former General Electric CEO Jack Welch decided last week to give up a $2.8-million-a-year post-retirement perk package that included such GE-subsidized goodies as access to company airplanes, an apartment in New York complete with maid service, New York Knicks tickets, limos, country club memberships, satellite TV in his four homes and even free meals--all on top of the $9-million-a-year lifetime pension. The timing of his giveback coincided with the announcement that the Securities and Exchange Commission plans to investigate Welch’s retirement deal.
It has been a bad time lately for CEOs and high-ranking corporate executives in general. Not just the Enron crowd, or Adelphia’s John J. Rigas doing the perp walk, or Tyco’s L. Dennis Kozlowski facing charges that he cheated his company out of $600 million. There is increasing scrutiny of executives’ compensation packages. CEO perks once taken for granted in corporate life--clothes, apartments, bodyguards, private school tuition for the kids--are being scrutinized. Few shareholders cared about those extras when the economy was rolling; now, the perks look like greed.
No, we haven’t suddenly become more high-minded, and we haven’t suddenly soured on capitalism. It’s not simply the stagnant economy that has made us suspicious of, or perhaps jealous of, fat-cat CEOs. We are simply experiencing icon shift.
Until just recently, top-performing corporate executives such as Welch, even when they were more feared than loved, occupied an unassailable place in the American mental galaxy. They were, after all, believed to be responsible for the vast and widely diffused sea of prosperity on which huge numbers of middle-class Americans happily sailed just a short while ago. Many middle-class people saw the value of their homes soar hundreds of thousands of dollars. Americans, on the one hand, decried Microsoft’s Bill Gates as a predator and, on the other, gobbled up news about his marriage, his underground mansion and his latest charities. He might have been a monopolist, and his software might make users sputter, but few really begrudged him his $43-billion personal fortune. Now, Gates and his ilk are out. They’re over. They’re yesterday’s icons.
Icon shift seems to occur every decade or so. It is partly cyclical, and it is partly driven by events. The most dramatic icon shift in recent American history occurred during the late 1960s. The Vietnam War, ineptly strategized by Washington brain-trusters, did not simply waste tens of thousands of young lives; it also dissolved in a flash an ideal of tough, stoic, tight-lipped American manhood that had been an iconic staple since the 1950s. Soldierly values were out, cops were “pigs,” and the off-to-work, briefcase-lugging family dad was a dull square. So, for the 1970s, we switched icons and we got the Alan Alda-esque “sensitive man” who couldn’t stop yakking to his therapist. We got Jimmy Carter, we got stagflation, we got seemingly endless, maundering “malaise.”
By decade’s end, Americans had had enough of that, and the era of Ronald Reagan ushered in new icons for the free market and the prosperity roll that marked Reagan’s presidency: the tough-minded corporate chairman who knew how to turn his company around (think Lee Iacocca--or Welch) and the yellow suspender-wearing junk bond dealer.
The 1980s model of CEO was crude by today’s standards, and at any rate, the recession at the end of that decade, coupled with a Democratic presidency for the first time since Carter’s, required the creation of a new icon for the 1990s. That decade, of course, turned out to be even more prosperous than the 1980s, so its icon was once again a CEO--but a “new economy” CEO who combined 1970s sensitive tastes and concerns with the leveraging talents and spending habits of an 1980s junk-bonder. Think Larry Ellison of Oracle (America’s third-richest cyber-magnate after Gates and Microsoft co-founder Paul Allen, according to Forbes magazine) or the once much fawned-over Michael Saylor of MicroStrategy, a dot-com highflier until its stock collapsed two years ago amid accounting irregularities. Think ashrams in Aspen for fiber-optics billionaires. Think celebrity chefs.
Writer David Brooks caught the zeitgeist of these characters with dead-on hilarity in his survey of 1990s culture, “Bobos in Paradise.” They were the “bobos,” the bourgeois bohemians of America’s new mass elite, the latte-swillers who combined the homespun with the extraordinarily high-end. The iconic dad of the 1990s was the guy with the Rolex President Perpetual Day-Date and the toddler in the Peg-Perego stroller cell-phoning his office at the Whole Foods organic spelt bin.
But now, we are living in a new decade and a new millennium, and icon shift has struck again. The bobos among us now look a tad frivolous in their concerns and consumption patterns. Sept. 11 brought a gravity to the national scene that has not yet left us, and the objects of our reverence are now cops and firefighters, guys who can’t afford Prada but know how to rush into burning buildings.
CEOs in Hugo Boss trench coats and celebrity chefs already seem passe (real men neither eat nor can afford the tab for chanterelle foam). We just finished a war against the harborers of terrorists, and we may be fighting another war very soon on a much larger scale. The values associated with war--bravery and patriotism--have made a proud return (and war movies like “Black Hawk Down” and “We Were Soldiers” were this year’s hits).
So, when Welch voluntarily downsized his GE retirement package last week, we had to give him credit for one thing: He knew how to read the signs of the times.
