Power Sheet – May 27, 2016
I’m just speculating, but I’d bet money that Disney CEO Bob Iger’s inbox is bulging with emails from fellow CEOs saying, in effect, “Let him have it and don’t let up!” Which raises the question, Why don’t more CEOs do what Iger did?
The story in brief is that Bernie Sanders ripped into Disney with special vim on Tuesday, telling a crowd in Anaheim, California, home of Disneyland, that “Disney pays its workers wages that are so low that many of them are forced to live in motels because they can’t afford a decent place to live. Meanwhile Disney made a record-breaking profit of nearly $3 billion last quarter,” and “the CEO of Disney made $46.5 million in total compensation last year. That is what we’re talking about in a rigged economy.”
Iger responded by going on Facebook and actually saying what every CEO in his situation would want to say: “To Bernie Sanders: We created 11,000 new jobs at Disneyland in the past decade, and our company has created 18,000 in the US in the last five years. How many jobs have you created? What have you contributed to the US economy?”
Disney isn’t the first big company to get lambasted in this presidential race, but as far as I can tell, Iger is the first CEO to show he can give as good as he gets. Sanders and Hillary Clinton have repeatedly roasted Johnson Controls for its planned merger with Tyco International, which would move Johnson Controls’ tax domicile to Ireland and reduce its U.S. taxes. Just before the Indiana primary, Sanders, Clinton, and Donald Trump all condemned United Technologies for planning to close a Carrier plant in Indianapolis and move production to Mexico. “The greed of United Technologies is unbelievable,” said Sanders. Trump went further and promised action: “Carrier will not leave Indiana if I’m president.”
Yet unlike Iger, neither Johnson Controls CEO Alex Molinaroli nor United Technologies CEO Greg Hayes made a peep, at least in public. They were probably wise, not cowardly.
Both of their companies were taking specific actions that were economically justified and arguably necessary but not widely popular. Responding to candidates’ criticisms would only draw more attention and inflame the issue. In addition, Clinton or Trump will probably be the next president, and no CEO wants potentially to damage his or her company’s competitiveness by being on record as an outspoken opponent of the world’s most powerful person.
Disney, by contrast, is doing nothing especially controversial at the moment and is performing excellently. Iger had a powerful riposte on job creation, and Sanders is not going to be president. Because Iger is supporting Clinton, he can’t be dismissed as a stereotype CEO who hates Democrats.
So bravo, Bob Iger! I wish more of his peers would speak out as he did. But it was only a rare combination of circumstances that enabled him to do so; for most CEOs, emulating him must remain a cherished fantasy. The reality is that we won’t hear many CEOs taking high-profile positions on this race – especially since most CEOs don’t like any of the remaining candidates. But that’s another topic.
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