The price of corporate progress
many Americans, the top tier of personal achievement is to become the
CEO of a Fortune 500 company. These executives live in a storied world
of lavish office suites, private jets and luxurious mansions
conveniently located near exclusive country clubs. Fifty years ago,
African Americans thought they would never be part of this community
except to serve.
Just 20 years ago, Clifton R.
Wharton Jr. became the first African American CEO of a Fortune 500
company when he was named president of TIAA-CREF. Since then, a number
of blacks have entered the executive suites of corporate America.
Prominent among these are:
- Stanley O’Neal, CEO of Merrill Lynch
- Richard Parsons, CEO of Time Warner
- Kenneth Chenault, CEO of American Express
- Ronald Williams, CEO of Aetna
- James Bell, CFO of Boeing
- John Thompson, CEO of Symantec
- Clarence Otis Jr., CEO of Darden Restaurants
- Aylwin Lewis, CEO of Sears
- Ursula Burns, president of Xerox
- Don Thompson, president of McDonald’s USA
- Lloyd Trotter, president of GE Industrial Systems
There are also a number of top black executives at smaller companies.
According to Management Leadership for Tomorrow (MLT), a nonprofit
corporate diversity consulting firm, 3 percent of senior management
jobs in the Fortune 1000 firms are held by African Americans or Latinos.
With blacks and Latinos comprising 27 percent of the U.S. population,
the percentage employed as top executives of major firms is small. But
one explanation is that the number of minorities earning MBAs is small.
According to MLT, only 8 percent of the students at the top 25 business
schools are African American or Latino.
It is important for African Americans to have the proper perspective on
the nature of corporate executive employment, because tenure as a CEO
is very fragile regardless of race. Employment is only as secure as the
last quarterly report, and corporate directors quickly become
disenchanted with CEOs who suffer losses.
Stanley O’Neal is out at Merrill Lynch after he was responsible for
losses of $8.4 billion, the largest loss in the firm’s 93-year history.
He reportedly left with $161.5 million in stock and retirement
benefits, so it is unlikely that he will have to file for welfare. The
treatment of O’Neal is not exceptional. Charles Prince III, the white
CEO of Citigroup, has been ousted after a loss of $5.9 billion. The
fact that Prince is white did not help him keep his job.
There will undoubtedly be other induced resignations of well-placed top
African American executives to follow O’Neal and Parsons, who announced
Monday he will step down from his post and hand over the reins at Time
Warner effective Jan. 1. When he does so, he will have enough money for
an affluent early retirement at the age of 59.
There is little room at the top and there are always ambitious and
talented people below persistently elbowing their way into the
executive suite. That is the name of the game. It would be unwise for
blacks to cry racial discrimination every time one of those achievers
falls. That would do little more than create a potential public
relations hazard for the promotion of blacks to top jobs.
There has been considerable progress in the 20 years since Cliff
Wharton broke through the glass ceiling. With diligence, this progress
can continue, and even expand.
“Back in the day, this was the only job we blacks could get on Wall Street.”