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CEO Confidence Index February 2009

Pessimism Continues to Snowball as CEOs Doubt the Effectiveness of the President’s Economic Measures

It is now clear that, so far, the President’s Stimulus Plan did little in way of bringing confidence into the markets. And, according to Chief Executive magazine’s CEO Index, it also appears to have done little, if anything, in way of assuaging CEOs’ fears about the direction of the economy.

In February, the Chief Executive magazine’s CEO Confidence Index, a leading economic indicator of executive confidence, broke its own record for the third time in the past four months, reaching a new low.

Overall, CEOs were united in their concern about the economy, as a whopping 95 percent rated the current business and employment conditions as bad. This is the highest number of CEOs to indicate such pessimism in the current state of the economy since polling began in October of 2002.

Worse yet, CEOs do not see things getting any better any time soon, as 69 percent expect the economy and 77 percent expect unemployment to get worse over the next quarter.  This is the second worst rating on future confidence in both of these areas since the polling began.  The worst records were set in December 2008 for the future confidence economy and in November 2008 for future confidence in employment.

“These low levels of confidence are unprecedented,” said J.P. Donlon, Editor-in-Chief of Chief Executive magazine. “Not only are CEOs strongly bearish, they do not expect a turnaround anytime soon.”

Echoing Kopko’s comments, Dr. Woodruff Imberman of Imberman and DeForest, Inc., said, “There will be a painful period of de-leveraging in the next few years, as has occurred so many times in the past.”

Furthermore, in this month’s additional polling, CEOs did not shy away from voicing resentment toward finance executives responsible for running their companies into the ground. When asked about what they think about Obama’s cap on executive compensation for those companies receiving TARP funds, 53 percent of CEOs said they were in favor of caps on executive pay.

“You don’t give the captain of the Titanic a bonus for hitting an iceberg and causing the ship to drown. CEO’s receiving bailout money for their sinking ships should be held to the same standard,” said John Chirikas, CEO, of Horizon Steel Co. “The interference from government is alarming, but frankly, it is a direct result of the terrible mismanagement by the financial community and sadly will have severe ramifications for all of us,” Chirikas concluded.

However, despite their favoring executive compensation caps, 45 percent of CEOs polled said the executive pay caps would either have a negative or a significantly negative impact on the performance of those companies receiving TARP Funds, while only 20 percent said they would have a positive or significantly positive impact.  Thirty-one percent of CEOs said pay caps would have no impact on companies’ performance.

CEO Index, February
Respondents: 371




Monthly Change

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Current Confidence Index




Future Confidence Index




Business Condition Index




Invest Confidence Index




Employment Confidence Index




 CEO Index Bonus Questions, February 2009

Are you in favor of President Obama’s proposed $500,000 cap on executive compensation for companies that receive federal bailout money?





Regardless of your answer above, do you think such a policy will have a positive or negative impact on the performance of companies whose executives are subject to the new rule

Significantly Positive




No impact




Significantly Negative


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