The future of the klieg-lit corporate chieftain looks dim, at least for now. Left behind by the U.S. boom of the ’90s, European governments tried to spark a stock-culture revolution of their own by encouraging venture capital and launching new markets for high-growth companies. This set the stage for the emergence of performers like Messier & Co., if only briefly. Now, as a downturn and the Enron scandal cast doubt on the claims of all corporate actors, a high profile is no longer an obvious plus. As the Harvard Business Review concluded in March, “It is, at long last, OK for leaders to be mere mortals.”
Perhaps luckily for Europe, it came late to the celebrity-CEO game. The rock-star mentality never took hold as it has in the United States, where executives hire agents to manage their careers. Search firm Spencer Stuart estimates that a third of the CEOs running the 700 largest U.S. companies are glamorous hired guns. Europe’s chieftains, by contrast, tend to be insiders. Schrempp started at Daimler as an apprentice mechanic. Messier toiled as a bureaucrat and investment banker before he cleaned up a water utility, changed its name to Vivendi and bought his way into the Hollywood spotlight. Kevin Delaney, human-resources expert in London for PriceWaterhouseCoopers, says he has had many clients ask him to “get me one of those U.S.-style celebrity CEOs.” But once they analyze their own business model, they tend to promote from within.
Their caution has been reinforced by author Jim Collins’s recent search for what makes good companies truly great. In “Good to Great,” his study of 1,435 U.S. companies found a negative correlation between how many times a CEO appears in the media and how well his or her company performs. While no similar study has been performed in Europe, experts believe the risks are the same. “Being in the news too many times can be seductive,” says Manfred Kets de Vries, a psychologist and a business professor at Insead, who runs a seminar for CEOs. “They start believing their own press.”
Some analysts wonder if that’s what happened to Schrempp. Lionized for the technically stunning Chrysler merger in 1998, his troubles began in late 2000 after he was quoted saying that he never intended a “merger of equals,” as promised. Claiming he was misled, a top Chrysler shareholder is suing for $8 billion in damages. Schrempp is giving fewer interviews, and when he does speak, he wants to talk about cars, not celebrity.
That won’t always be possible. Not all the forces at play are working to smother celebrity culture. The ’90s brought an explosion of new European business publications that mimicked the U.S. trend of the ’80s, when a drab financial press discovered color, sex appeal and charismatic figures like Lee Iacocca. Even European CEOs who seek privacy, like Ron Sommer of Deutsche Telekom, or actively dodge the press, like Ferdinand Piech of VW, were turned into celebrities. Since these new business media will survive the downturn, the culture they feed will survive, too. “The personality story is the easiest to understand,” says Ulrich Steger, management professor at IMD in Lausanne. “If you have a similar media structure [to the United States], you’ll have similar results.”
But not the same results. European businessmen claim they are skeptical of celebrity. A survey of opinion leaders last year by public-relations agency Burson-Marsteller found that only 49 percent of Germans would buy a company’s stock on the reputation of its CEO, compared with 95 percent in the United States.
The Barnevik affair has reinforced Europe’s lingering aversion to the al-mighty CEO, an American concept that never quite applied in most of Europe. During the 1990s, when American practices were all the rage, Germans started to use the term CEO to translate Vorstandssprecher, which means more literally “speaker of the management board.” The speaker generally has more privacy than a CEO, with salary and perks that are still secret even at public companies, but less individual power. The board as a whole is accountable for the company.
Europe is now wrestling with the rules that will shape its corporate culture. The emerging tendency is to rule by more-focused committees, rather than abandon them for one big chief. DaimlerChrysler and Deutsche Bank are creating a kind of executive committee in the form of a small new ruling group within the management board. At the same time, companies are opening up the pay of top execs to public scrutiny, and their decisions to review by outside directors. The result is likely to be a mix of power and privacy in the corner office that is more American than before, but still distinctly European. Making CEOs work with a committee tends to dilute star power. Publishing salaries tends to magnify it. The likely result: once their current 15 minutes of infamy are over, the celebrity CEOs will make a modest comeback in Europe.
