CEOs

Updated August 21, 2008 at 11:02 AM PST with comments from Glassdoor's CEO.

Glassdoor.com uses an online questionnaire so employees can rate their companies and CEOs. I took the questionnaire. It's all the usual stuff, like what do you think of the leadership abilities and competence of senior management, would you recommend your company as a place to work, that sort of thing.

I thought it would be interesting to track the stock performance of the

public companies with CEOs that had the highest approval ratings versus those with the lowest approval ratings.

Guess what I found?

Over the past five years, shares of all the companies whose CEOs had the highest approval ratings were in the black, while shares of all the companies whose CEOs had the lowest approval ratings were either in the red or flat. We're talking 8 of 8 in the black, 8 of 8 in the red or flat.

What does that tell you?

First, that we live in America, the great land of greed and capitalism. If you're stock is in the money, the CEO's a god. If your options are under water, he's a dog. And don't flame me, it's what employees had to say, not me. But for what it's worth, I don't think that's a bad thing.… Read more

In baseball, you get three strikes and you're out. As for technology CEOs, that depends. It depends on the magnitude and visibility of their screw-ups, the aggressiveness of the board, all kinds of things.

Sometimes it just takes one event, if it's big and hairy enough. On the other hand, I've seen CEOs swing and miss dozens of times for years on end, and they're still in the game.

Let's take a look at five recent examples of CEOs getting canned and see what we come up with:

Patricia Russo of Alcatel Lucent. It came as no surprise when Alcatel Lucent announced on July 29 that CEO Russo would step down. She had a decent run at the helm of Lucent, but the 2006 merger with Alcatel has been a disaster for both companies. This is a great example of one huge, high-visibility strike doing a CEO in. Incidentally, Chairman Serge Tchuruk is out, as well.… Read more

The concept of corporate governance implies consistent and effective laws, methods, and metrics for governing our nation's public companies. The sad fact is that there is no such thing. It's a myth. Here's why:

People talk about the fiduciary responsibility of boards of directors. What that means, in plain speak, is that boards are supposed to:

1) Hire and fire the CEO and appoint other corporate officers 2) Compensate the CEO and other corporate officers 3) Oversee corporate strategy 4) Represent shareholders in the transparent and effective governance of the company

As an ex-officer of several public companies and as a consultant, I've been involved with lots of boards, executive staffs, investment banks, VCs, corporate attorneys, and the like. At least in my experience, boards don't operate the way they're supposed to.

Let's take the last point first. Shareholders are offered a slate of directors and a handful of issues to rubberstamp. That means they have two choices: accept or reject.

Now, let me ask you this. If your spouse or doctor says, "Here's my recommendation, take it or leave it," what do you do? That's right, you take it. Is it the best thing for you? Who the heck knows? You had a gun to your head so you nodded up and down.… Read more

Technology executives are notorious for their out-of-proportion egos and hot-headed tempers. Michael Dell, Larry Ellison, Bill Gates, Steve Jobs-- even Andy Grove--are all members of a long list of distinguished high-tech executives who are famous for not suffering fools lightly, among other things.

But what happens when they're the fools? What happens when a high-powered executive has his head up his you-know-what and has lost all sense of objectivity? What happens when a gutsy employee speaks up? Well, in many cases he gets his head chopped off for his trouble. In shrink speak this is called transference, which in this case means unconsciously taking one's own feelings of inferiority and guilt out on another.

Given a choice, the vast majority of people would rather forgo the whole decapitation thing rather than declare that "the emperor (or should I say executive) has no clothes." Not surprisingly, this phenomenon is rampant in the technology industry.… Read more

Nobody knows exactly when Hewlett-Packard's $13.9 billion acquisition of EDS will close, but it may already be too late for the tech giant to take a run at IBM's leadership in global technology services.

Eight years ago, then-CEO Carly Fiorina looked into acquiring PricewaterhouseCoopers to expand HP's services business, but it ultimately balked at the deal. IBM scooped up the consulting firm for $3.5 billion just two years later, a move that accelerated its famously successful repositioning as a services company.

Now HP Chief Executive Mark Hurd is trying to do what Fiorina failed to do eight long years ago--eons in today's ultrafast-pace technology world.… Read more

Corporate fraud didn't start with Enron, Tyco, and WorldCom and it didn't end with them, either. Fraud is rampant in the technology industry. What most employees, investors, and consumers don't realize is how much it costs them.

Excuse me for stating the obvious, but you'd be surprised how many people think there's some magic pile of dough somewhere that pays for companies to comply with investigations, contest charges, and remedy issues. In fact, the costs are born primarily by the corporation. That means it comes right out of shareholders' and employees' pockets. Consumers also pay, albeit indirectly.

And yes, we're talking about costs that materially impact earnings, balance sheets, and cash flow. We're talking about internal and outside lawyers, accountants, consultants, crisis PR, D&O (directors and officers) insurance, Sarbanes-Oxley compliance, exit packages, and even recruiting costs to replace executives.

Of course, the biggest cost is in terms of loss of market capitalization.… Read more

If you've ever been involved in any sort of home construction, you know it always takes longer than the contractors say it will. For the past 10 weeks, the Tobaks have been doing a swimming pool project. So far, so good.

Last night, as the Bay Area cooled down from a three-day heat wave, my wife said, "It would sure be nice to get water in the pool in the next two weeks."

"What do you mean?" I exclaimed, "You know the pool company is scheduled to come out tomorrow and fill it up on Tuesday. Two weeks? We'll be swimming in two days!"

"Uh huh," she said.

The next morning, my wife pulled the pillow off my snoring head and announced, "We have no water."

I replied with a blank, bleary-eyed stare.

"The pool guys are all here and we have no water."

"Okay," I replied, "I'm getting up."

Apparently, a stuck check valve in our irrigation system had been dumping precious water faster than our well pump could pump it. Our holding tanks were dry.

No water meant the pool guys couldn't do their thing. An hour later, the whole gang packed up and left.

When you live in a rural mountainous area, this sort of thing happens from time to time. That means every few years.

So I'm sitting here trying to figure out how my wife knew something was going to happen. She couldn't possibly have known. Wait, I know. She sabotaged the irrigation system just to appear prescient. Nah, that's just crazy.

When I asked her about it, she said she'd just had a feeling.

That got me thinking: Is there such a thing as intuition? And if so, what is it and how does it matter to you and me?… Read more

Nestled in the redwood trees of Northern California's Santa Cruz Mountains is one of the most beautiful office facilities you'll ever see. The impeccably landscaped grounds include ponds, tennis courts, a swimming pool, an auditorium, a fitness center, a large outdoor eating area, and loads of light throughout the open-style architecture.

The facility even has its own exit-entrance ramp off the northbound side of highway 17.

Philippe Kahn, the French-born CEO of Borland International, spent nearly $120 million of capital to build the Scotts Valley campus for Borland's 1,200 employees. When the new corporate headquarters opened in 1993, it was full to capacity. It was all downhill from there, but I don't think Kahn knew it at the time.

You see, in September of 1991, Kahn acquired Ashton-Tate for $440 million. To say the merger would prove to be the biggest mistake of his career would be a gross understatement. It was disastrous, as both company's product lines stalled and Ashton-Tate's dBASE database management program completely missed the transition to Windows. … Read more

Occam's Razor essentially says that all things being equal, the simplest solution is the best. The principle has implications in virtually every field of science, not to mention philosophy, aesthetics, marketing, business, you name it.

If for some reason you don't buy the word of a 14th-century Franciscan friar, it might interest you to know that Albert Einstein also believed the universe loves simplicity. I don't know about you, but I'm in no position to argue with that guy.

You'd think that keeping things simple would be the easiest path, but that's not necessarily the case. Sometimes it's downright impossible. Look at the personal computer, for example. The need for backwards compatibility with legacy programs and interfaces has forever rendered the PC more complex than any of us would like.… Read more