Looking for the incontrovertible corollary to guide your investments? Try this one: CEO handicap down, company stock up. Sometimes, it even works in reverse.
America's business leaders are not necessarily playing more, they tell us, but they want the rounds they play to be more enjoyable. Paradoxically, the golf course serves not only as a retreat but as an extension of the office: a place where deals are done and strategic partnerships are formed.
Calls to the offices of America's Big Business leaders generally elicited intimate knowledge of the boss' game -- and a few all-too-candid assessments of the boss' abilities: "He thinks he's a golfer, but he really isn't," reported one personal assistant. "Aren't they all golfers?" another asked.
Well, not all CEOs, but certainly a majority. We can attest to this after contacting all of the 1999 Fortune 500 as we expanded Golf Digest's exclusive CEO Golf Handicap Rankings from 1998. Since our 2000 ranking lists only the top 200, a number of CEOs didn't make the 22.2 handicap cut. Others play too casually to have a real handicap.
Grab a cup of Java while perusing America's Golfing CEOs: The Top 200 (Click here to view the Best of Business list). Sun Microsystems' Scott McNealy, 44, is again No. 1, with a USGA Handicap Index of 3.3. (For McNealy's office practice tips, click here).
Although he has refrained from chanting "I am not worthy," the voluble former Harvard golf captain does question his lofty position. "No way should I be No. 1 after being trounced by (General Electric CEO) Jack Welch not once but twice," McNealy says. "I just hope he waits long enough to retire so I can beat him." McNealy and Welch met via our 1998 ranking, with Welch winning the golf matches and McNealy getting a seat on the GE board of directors.
Welch, meanwhile, has slipped in our rankings from No. 2 to No. 16, with an Index of 7.1, but with scalps including Greg Norman's hanging from his belt, he is likely to be the No. 1 retired CEO when he leaves GE in April 2001.
Welch, 64, acknowledged the presumably temporary increase in his handicap with characteristic frankness. "My Index did go up in the last four months (of 1999), because I stunk," he says. "But I'd like to think it was related to my bad shoulder and not age."
The new No. 2 is Bob Walter, 54, a 3.6 whose Cardinal Health offices are located in golf-crazy Dublin, Ohio. Walter declines to shed any light on his two-stroke improvement from his '98 Index, but those familiar with his game did. "He's simply a brilliant guy and a great competitor," says one. "He brings those qualities to the golf course and just figures things out on his own. He's an excellent course manager."
Rounding out the top three with a 3.9 Index is Ed Blechschmidt, 47, CEO of Olsten spinoff Gentiva, North America's largest home health-care company. According to the head professional at his club, Blechschmidt, like Walter, doesn't take much time for golf but does enjoy practicing with his kids. "He's long off the tee and has a great short game," says his pro. "It's not because of any help I've given him. He's had maybe two lessons in three years."
How closely related are success in the board room, on Wall Street and on the golf course? We can only observe that, as a group, our CEOs are ahead of the curve as golfers. The number of single-digit players has more than tripled since our 1998 listing, with 37 making the grade.
The average of all the CEOs for whom we found a handicap was 14.4, well below the national average of 16 -- even as many of their companies posted record revenues and profits. Although a woman has yet to make our list, Avon CEO Andrea Jung is taking up the game.
As for whether good golf is good business, we offer this: After our original list was published in 1998, our parent publication, The New York Times, looked at the 51 CEOs who appeared both in our list and in the database of large-company executives maintained by Graef Crystal, who edits a newsletter on executive compensation. The Times reported that the 11 executives whose companies delivered the best stock-market performance over three years also had the best average Handicap Index. Crystal, who performed the complex calculations, told The Times: "For all the different factors I've tested as possible links to predicting which CEOs are going to perform well or poorly, this is certainly one of the oddest -- but also the strongest -- I've seen."
Because the longstanding Golf Digest formula for determining Most Improved award winners at the grassroots level takes into account the difficulty of getting an already low handicap even lower, Cardinal Health'Ís Walter, strictly speaking, would be our Most Improved CEO of 2000. The competition, however, is fierce: Consolidated Edison's Eugene McGrath has gone from a 19.0 to a 13.7 since he appeared on our list in 1998, and IBM's Lou Gerstner went from a 13.1 to 8.7. In North Carolina, Rick Priory of Duke Energy has improved from a 10.0 to a 6.3.
Gerstner has an interesting explanation for his improvement: "A truly great teaching pro, tons of practice, wonderful Callaway woods and a wife whose golf has improved so much in the last two years that she is a threat to beat me. All that notwithstanding, my handicap could go up in the future just as fast as it came down."
Most Consistent CEO might seem an appropriate accolade for Microsoft's Bill Gates, whose Index remains at 23.9, exactly where it was in 1998 and keeping him just outside our top 200 list. But those familiar with Gates' game are skeptical about his handicap -- just as they are about Low CEO Presidential Candidate Wannabe Donald Trump, whose private company falls outside our Fortune 500 criteria. Trump tells Bob Verdi he's "a 5 or 6" handicap but is on the books with a 0.9 Index. Handicap guru Dean Knuth says that Trump's and Gates' handicaps mirror their personalities: "When I was at the USGA, I concluded that Trump's handicap is mostly a "vanity handicap" that he can't play to and did not include all of his scores. Gates has been too competitive with his handicap on occasion and has had a 57 net score in a tournament."
A few tips from the topCEOs in our large Most Cooperative category (those who responded to an initial mailing that predated the phone calls to the offices of those who didn't) provided several insights into their success with their submissions of the "best tip I ever got." While "stay on the tennis court" (from infrequent golfer Alan G. Hassenfeld of Hasbro) and "I'm still waiting" (from Alan R. Hoops of Pacificare Health Systems) were our favorites, the tip cited most often was more pithy and familiar: "Relax!"