When faced with intense media scrutiny, most CEOs defer to their public relations professionals for damage control. That’s why Jefferies CEO, Richard Handler, stands out from the pack. Handler has taken most of the company’s PR into his own hands.
After MF Global went under, attention turned to Jefferies because of the bank’s bond positions in Europe. And Handler has faced the scrutiny head on, according to BusinessWeek. He has made 7 personal statements and has revised and sent emails to the media. Most CEOs would not be so heavily involved in a PR campaign.
The reason for all of this? Handler doesn’t have an employment contract with Jefferies and owns 6 percent of the company. He also has lost $240 million this year. Handler won’t receive a golden parachute if the company goes under.
Handler’s efforts have made a measurable (5 percent) impact on the bank’s stock performance.
Should more CEOs have large stakes in their companies, without employment contracts? Would this provide a better incentive structure?