A Portrait Of The Bossby
What does it taketo join the ranksof the Corporate Elite? Age, experience, and staying power. The man running the typical BUSINESS WEEK 1000 company -- there are no women -- is 56 years old. He has been working for the same company for more than 22 years, and he has been in the corner office for more than eight.
The chief's air of stability extends beyond the office. Nearly all of the CEOs in the Corporate Elite are married. Only 32 out of 1000 will admit they are currently divorced. Along with wedded bliss, the boss is a firm believer in progeny. Our typical CEO has 3.1 children, compared with 2.1 for the average American couple.
Members of the freshman class are not quite so prolific -- they average only 2.8 offspring. The standout among new CEOs: Allied-Signal Inc.'s Lawrence A. Bossidy, with nine kids. And for many corporate leaders, business is a family affair, too. Over 10% of the executives in the Corporate Elite have children working for the company they manage.
Besides being almost uniformly white and predominantly Protestant, these bosses are a homogeneous bunch in other ways as well. You don't get to the top of the typical company, with $3.8 billion in revenues and $177 million in profits, by doing things differently. You get there by doing the right things, only better than everybody else. Our typical CEO went to college, where he majored in business. The odds are better than 1 in 5 that he played varsity sports. More than half of the Corporate Elite went on to graduate school. A majority -- 52% -- did a stint in the military, though their numbers are declining as many World War II veterans move into retirement.
It's small wonder that after reaching the highest rung on the corporate ladder, the boss wants to stay there awhile: The rewards of running a BUSINESS WEEK 1000 company are plentiful. Our typical leader earns an average of $868,000. Pity his younger counterpart, who has been in the executive suite a year or less: This poor fellow isbringing home $608,000 this year.
To learn more about the group of men who collectively control $3.8 trillion in revenues, read on.
POWER DIPLOMAS The tiger has taken a bite out of the bulldog. Yale University has traditionally produced the most CEOs in the Corporate Elite. But this year, Princeton University edged out the Elis as the leading alma mater for BUSINESS WEEK 1000 chieftains, with 35 alums in the corner office. Among them are H. Brewster Atwater Jr. of General Mills, Richard B. Fisher of Morgan Stanley, and William D. Ruckelshaus of Browning-Ferris Industries. Yale fell to second place this year, with 30 CEOs. Harvard University remained No. 3, with 24 grads.
Other elite schools that graduated a large number of corporate bosses include the University of Pennsylvania and its Wharton School, with 20; Northwestern University and Stanford University, both with 16; and Cornell University, with 15. Stanford is the only West Coast school represented among the Top 10 CEO-producing colleges.
Among the freshman class of CEOs, Princeton, Stanford, and, surprisingly, Purdue University had the most grads. State schools with the most CEO alums are Wisconsin, Michigan, and Texas.
When it comes to graduate diplomas -- which hang on the walls of nearly half the members of the Corporate Elite -- no school comes close to Harvard. Nearly 10% of the CEOs have a Harvard graduate degree in business, law, or some other specialty dressing up their resumes. Next in line is Stanford, which has had 27 corporate bosses pass through its grad programs. Other popular places to earn a graduate diploma include Columbia University and Massachusetts Institute of Technology, both with 19, and Northwestern, with 17.
Among state schools, Michigan was the leader, with 16 CEOs earning graduate diplomas in Ann Arbor.
FOLLOW THE YELLOW BRICK ROAD What's the best path up the corporate ladder? As in previous years, more CEOs started out in finance or accounting than in any other area. A quarter of the bosses in the Corporate Elite won their management stripes by crunching numbers. Marketing was the second-most-popular route to the top -- nearly 21% of today's CEOs were once marketing men.
But just because you don't have a finance or marketing background doesn't mean you won't sit in the corner office someday. About 16% of corporate bosses began their careers in engineering or technical positions. And the numbers are even higher among the freshman class of CEOs, where 22% identify themselves as techies, including Anthony S. D'Amato of Borden Inc. and Alfred M. Zeien of Gillette Co.
Besides these technical types, some chief executives make it to the top floor from the shop floor. Fully 9% of BUSINESS WEEK 1000 companies are run by managers who started out in manufacturing or production.
It used to be that a law degree was the ticket to a career in government. But these days, knowing how to write a legal brief seems to come in handy in the private sector as well. About 7% of the Corporate Elite identified law as their career path, and over 10% of CEOs are law-school graduates.
Five CEOs can raise their hands the next time someone asks: "Is there a doctor in the house?" Among them are P. Roy Vagelos of Merck & Co. and Theodore Cooper of Upjohn Co.
The groves of academe were the training grounds for five corporate bosses. Among those who honed their management skills in an educational setting: Kroger Co.'s Joseph A. Pichler, who is the former dean of the University of Kansas School of Business.
TO GET AHEAD, GO ABROAD If you're thinking about ducking that foreign assignment in order to stay close to the corporate nerve center, think again. Based on the responses of executives running BUSINESS WEEK 1000 companies, a stint abroad is becoming a valuable step in the corporate climb. Only 13% of all CEOs said they did a tour of duty overseas. But 20% of the men who took the helm in the past year have worked outside the U. S.
Not surprisingly, Canada was the country where most American bosses went to gain foreign experience. Sixteen CEOs say they have put in time north of the border. Proximity and lack of a language barrier obviously make a Canadian stint easier than one in Peru or Jordan.
After Canada, Britain was the most popular destination for future CEOs, followed by Belgium. Among the heavyweights who spent time in Britain are Exxon's Lawrence G. Rawl, Ford's Harold A. Poling, and Xerox' Paul A.Allaire.
By and large, CEOs with foreign experience got it in Canada or Europe. Very few corporate bosses have lived and worked in Latin America or the Far East.
But there are exceptions. Among those who were posted to exotic locales were Brian G. Dyson of Coca-Cola Enterprises, who worked in Venezuela. Ronald W. Haddock of Fina Inc. commuted between China and the U. S. every six weeks from 1982 to 1986. Robert J. Pfeiffer of Alexander & Baldwin Inc. is one of the few members of the Corporate Elite to have spent time in Japan. His Asian experience also includes Korea, Taiwan, the Philippines, and Hong Kong.
A CEO BY ANY OTHER NAME Nearly all of the bosses in the Corporate Elite carry the title of chief executive officer. One who doesn't: Joseph M. Clapp, who heads trucking company Roadway Services Inc., where there is no CEO. Clapp is Roadway's chairman and president.
Another special situation: Herbert M. and Marion O. Sandler, the husband-and-wife team who operate Golden West Financial Corp., alternate as chief executive year by year. Because it's Herbert's turn as Golden West's CEO this year, there are no women running BUSINESS WEEK 1000 companies.
Almost half of the CEOs in the Corporate Elite also hold the office of chairman. An additional 20% serve as president of their companies, too.
And how many of these honchos wear three hats -- chairman, CEO, and president? Quite a few. Nearly a quarter of these corporate bosses occupy the top three spots in their company.
A handful of CEOs double as chief operating officers. Among them are Robert F. Daniell of United Technologies, Morry Weiss of American Greetings, and Roger W. Kober of Rochester Gas & Electric. And a few CEOs act as vice-chairman, including Stewart D. Blair of United Artists Entertainment, John J. Shea of Spiegel, and Edward E. Penhoet of Chiron.
But some of the additional roles played by members of the Corporate Elite are a bit more exotic. American Express Co. CEO James D. Robinson III is also the company's chief quality officer. At Apple Computer Inc., Chief Executive John Sculley serves as chief technical officer. And Daniel E. Evans of Bob Evans Farms Inc. acts as his company's corporate secretary.
Some corporate bosses hold management jobs at more than one company. For instance, Milton H. Ward of Freeport-McMoRan Copper & Gold Inc. is also chief operating officer of parent company Freeport-McMoRan Inc.
HOW THEIR COMPANIES ARE DOING In exchange for his hefty paycheck -- which we take a closer look at below -- the CEO manages a weighty enterprise. A BUSINESS WEEK 1000 company averaged $3.8 billion in sales in 1990, up 7.4% from $3.6 billion in 1989. But our typical CEO had better keep a closer eye on the bottom line: The average profit slipped5%, to $177 million from $186 million. General Motors Corp. had the highest sales of any company, with $123.3 billion. GM also lost the most money -- $2 billion. Gensia Pharmaceuticals Inc., which does drug research, was the company with the smallest sales -- zero for the past two years. IBM earned the most -- $6 billion.
Fortunately for CEOs and investors alike, the decline in profits hasn't hurt average market capitalization, which is up 26.6%, to $3.2 billion from $2.5 billion. The rising stock market has lifted the average price per share of a BUSINESS WEEK 1000 company by 23.9%, to 45 3/4 from around 37. But excluding off-the-chart Berkshire Hathaway Inc. -- recently trading at $8,500 a share -- the average stock price was up 21%, to about 37 from around 30 1/2. Exxon Corp. has the largest market capitalization of any company on the list, at $72.5 billion. On the other end of the spectrum is Measurex Corp., with a market cap of $385 million.
Along with rising stock prices has come a boost in the average price-earnings ratio of the BUSINESS WEEK 1000. It's now 18.1, compared with 13.6 a year ago.
THE CUTBACKS STOP HERE Recession? What recession? Even though average profits for the BUSINESS WEEK 1000 fell last year, Corporate Elite paychecks continued to grow. The average CEO's base salary and bonus hit $868,000, up 3.2% from 1989. The rate of increase has slowed, though, from last year's 7% growth.
Not everyone in the Corporate Elite bags that kind of cash. Some, such as David Rockefeller of Rockefeller Center Properties Inc., collect no salary. Of course, he can probably afford it. Similarly, Berkshire Hathaway Inc. CEO Warren E. Buffett limits his annual salary to a modest $100,000, though he takes in more from Berkshire dividends than some CEOs see in their paychecks. Buffett is also forgoing a salary in his new post as head of beleaguered Salomon Brothers Inc.
If earning big bucks is your top concern, stay away from utilities, where the average CEO paycheck of $452,000 is the lowest of any sector. Other industries at the bottom of the list are containers and packaging, with an average CEO take of $592,000, and building materials, $602,000.
The fattest paychecks are collected by bosses in theconsumer-products business, where CEOs get an average of $1,367,000. Heads of conglomerates get the second-biggest checks -- an average of $1,357,000 -- while bosses at leisure-time companies earn an average of $1,209,000.Reebok International Ltd.'s Paul Fireman earns the most: $14.8 million. Walt Disney Co.'s Michael D. Eisner is close, with $11.2 million. Herbert J. Siegel of Chris-Craft Industries Inc. made $8.4 million, and Charles Lazarus of Toys 'R' Us Inc., $ 5.4 million.
'IN MY PREVIOUS LIFE, I WAS...' While the Corporate Elite seem like a pretty predictable bunch at first glance, many of today's CEOs took some strange detours on the way to the executive suite. A newspaperman who likes hanging out with cops? Washington Post Co.'s Donald E. Graham once worked as a policeman.
At least one CEO really knows his way around the golf course: The head of Textron Inc., Beverly F. Dolan, got his start in something much humbler than conglomerates. He founded golf-cart maker E-Z Go, which Textron acquired in 1960. Before joining the fabric business, Hancock Fabrics Inc. CEO Morris O. Jarvis was a manager at United Funeral Service.
The door between government and business continues to revolve. Stewart W. Bainum Jr. of nursing-home operator Manor Care Inc. was formerly a Maryland state senator. All told, at least four bosses came from federal government agencies, while seven came directly from the military.
And the door between General Electric Co. and executive suites elsewhere revolves at an ever-faster rate. A dozen CEOs came from Jack Welch's school for managers -- eight of them in the freshman class alone. Among the new bosses who spent time at GE are Borden's Anthony S. D'Amato, Allied-Signal's Lawrence A. Bossidy, and Rubbermaid's Walter W. Williams.
If you can't work for GE, try donning a green eyeshade. At least 19 CEOs in our Corporate Elite joined their companies from accounting firms, while at least 10 others came over from consulting firms.
WUNDERKINDER AND ELDER STATESMEN The average CEO is in his mid-50s. But who's average? Youngest is Michael S. Dell of Dell Computer Corp., at 26 years old, while elder statesman Milton J. Petrie of Petrie Stores Corp. is 89. There are two other bosses who are octogenarians -- As-sociated Communications Corp.'s Jack N. Berkman, 86, and Lawter International Inc.'s Daniel J. Terra, 80. And an additional 16 are 75 or older, including Block Drug Co.'s Leonard N. Block, 79, and Dillard Department Stores Inc.'s William T. Dillard, 77.
But 17 of the top bosses are under age 40. Some of these youthful CEOs made it to the corner office by starting their own companies. Junior members of the Corporate Elite include such boomer wunderkinder as Microsoft CEO William H. Gates III, 36; Sun Microsystems Chief Executive Scott G. McNealy, 37; and Lotus Development's Jim P. Manzi, 39. But you needn't be a techie to reach the top before 40: Just ask Charles D. Way, 38, of Ryan's Family Steak Houses Inc.
While the average age of Corporate Elite CEOs hasn't changed much in the past few years, the ranks of the very oldest bosses are thinning. In 1990, there were 359 chief executives aged 60 or older. This year, there are just 343. And only 22 of the 154 new CEOs are older than 60.
THE GAMES THEY PLAY The members of BUSINESS WEEK's Corporate Elite work hard, but they play hard, too -- or at least, they once did. Over 20% of the CEOs say they played varsity sports as college undergraduates. Football was their most popular choice, followed by baseball or softball, then basketball.
With their school days long behind them, nearly all CEOs say they continue to play sports in their spare time. Based on the responses to BUSINESS WEEK's survey, the ability to play golf and tennis may be a prerequisite for joining the Corporate Elite club.
A lot of CEOs talk about making their companies lean and mean, and a fair number are dedicated to staying lean and mean themselves. Just look at Brian G. Dyson of Coca-Cola Enterprises Inc., who is still competing in triathlons at age 56.
Then there are some real bruisers -- the handful who identified weight-training as a hobby. Among them are John W. Teets of Dial, Stephen M. Berkley of Quantum, and Michael G. King of King World Productions.
More than a dozen CEOs say they get away from it all by going scuba diving. But John A. Rollwagen of Cray Research Inc. prefers to stay on top by windsurfing, and so does Joel B. Alvord of Shawmut National Corp. George J. Collins of T. Rowe Price Associates Inc. washes away the stresses of running his investment firm by going for long-distance swims.
But not all CEOs favor pastimes that are so physically demanding. Charles P. Lazarus of Toys 'R' Us Inc. says croquet is his idea of a good time, while John T. Hartley of Harris Corp. enjoys the more subtle rewards of raising orchids. Michael D. Dingman of Henley Group Inc. is an avid collector of toy trains.
TRIVIA David W. Kemper of Commerce Bancshares Inc. could as easily be teaching literature as running a bank. The Harvard graduate has a master's degree in English literature from Oxford University as well as the more standard MBA from Stanford . . . . Alan C. Hasselwander of Rochester Telephone Corp. is a graduate of St. Bernard's Seminary . . . . Milton J. Petrie of Petrie Stores Corp. has been in office the longest -- 59 years . . . . More than 50 CEOs share their last name with the company they run . . . . New York produces the most CEOs, followed by Illinois and Pennsylvania . . . . Nearly 140 of the CEOs say they founded the company they manage . . . . Corporate leaders holding technical or business degrees outnumber liberal-arts majors 2 to 1 . . . . A dozen chief executives attended military schools . . . . Barron Hilton of Hilton Hotels Corp. enjoys hot-air ballooning . . . . Beam me up, Scotty: Darryl F. Allen of Trinova Corp. collects Star Trek memorabilia . . . . Every state has produced at least one member of this year's Corporate Elite except Wyoming and Vermont . . . . Armco Inc.'s Robert Purdum was once an engineer for the Indiana Toll Road Commission . . . . John W. Rollins Sr. of Rollins Environmental Services Inc. studied with International Correspondence Schools.