June 24, 2008
More on CEO Security
I would like to offer a little different perspective on the blog from last week about “The Price of CEO Protection.” This analysis overlooks two important variables – the wealth and the public profile, and resulting risk to the CEO of that wealth and profile, regardless of explicit threats. Some of these individuals have been very aggressive in their business dealings. One was Time Magazine’s Man of the Year. Another introduced a revolutionary and disruptive business model. All three of these examples are multi-billionaires.
A useful approach would be to analyze security costs in a multivariate model considering personal wealth (an objective number), public profile (subjective), and the how-many-you-might-have-ticked-off-along-the-way metric (probably quantifiable but not available) and then the numbers might make more sense.
Having worked directly for six of the most famous and wealthiest CEOs in the country, I can tell you that most people cannot imagine the intensity of the security issues they face. Travel to a foreign country often involves the State Department, Secret Service, and/or CIA. Their children are assumed to be kidnapping targets. Their security staff are not rent-a-cops but former Special Forces, SEALs, and CIA operatives. Not something Joe Schmoe CEO really needs to think about or pay for.
This leads to the question of whether the company should be shouldering these costs. If you note that Steve Jobs looked so skinny during his keynote last week that rumors about his health took 6% off of Apple’s stock price in two days, we note that the markets consider the well-being of “celebrity CEOs” to be a shareholder value issue, despite tax code trivia, and a valid use of company funds.
– Fred Whittlesey, Buck Consultants