Move over, Musk… Delusion of celebrity brings down another CEO
Nissan’s Carlos Ghosn thought his rock-star status meant the rules didn’t apply to him. Then came his arrest for financial improprieties.
The apparent downfall of Carlos Ghosn, the celebrity chief executive officer of Renault and board chairman of Nissan, is the latest example of what can happen when top executives get caught up in the celebrity culture.
Ghosn was arrested in Japan on Nov. 19 for under-reporting his income and misusing Nissan’s corporate funds to pay for real estate in four cities around the world and expensive family vacations. He has an estimated net worth of $100 million; he clearly didn’t need the funds he is accused of diverting. But then, rock-star executives often consider the access to company assets no more than their due. Even Steve Jobs, the closest the business world has to deity, barely escaped major damage from a scandal involving backdated options. General Electric CEO Jack Welch, another hero to aspiring MBAs, got a lifetime of sports tickets as part of his extravagant severance package. Tesla CEO Elon Musk, with a fortune estimated by Bloomberg Billionaires at $4.8 billion, this year received the biggest compensation plan ever approved for any chief executive.
This isn’t really about greed. It’s about craving rock star levels of appreciation. A chart-topper relishes the roar of the crowd; a dictator walks on flower petals; a celebrity CEO gets something an ordinary company head wouldn’t — and gets away with it, at least for a while.
This is all part of the culture that begat President Donald Trump and that places a celebrity in a bubble of aggrandizing public attention, positive or negative, deserved or undeserved. Donald Hambrick at Pennsylvania State University, who has focused on the “CEO effect” in his research, has shown that a strong CEO can have a major, quantifiable effect on a company’s performance — but that narcissistic CEOs, those with the bigger photographs in annual reports, the purveyors of portentous quotes, the attention-seekers and empire builders don’t really outperform their less self-absorbed peers…