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CEO Confidence Index Breaks Its Own Worst Record

Monday, March 09, 2009

Press release from the issuing company

NEW YORK  -- It is now clear that, so far, the President's Stimulus Plan did little in way of bringing confidence to 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 Donlon'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. CEOs 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.

For additional information regarding the confidence of public and private-company CEOs, details about CEO attitudes on employment, investment and business conditions, visit our full report at http://www.chiefexecutive.net/ceoindex.




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