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CALIFORNIA CHIEF EXECUTIVE OFFICERS IN CRISIS: THE EXECUTIVE COMMITTEE REPORT

 CALIFORNIA CHIEF EXECUTIVE OFFICERS IN CRISIS:
 THE EXECUTIVE COMMITTEE REPORT
 SAN DIEGO, March 10 /PRNewswire/ -- California's small- and mid- sized businesses are as much an endangered species in the state as are large corporations, according to a recent survey by The Executive Committee, a San Diego-based international organization that helps chief executive officers improve their companies.
 The Executive Committee polled a sampling of its 700 California chief executive officer members earlier this year.
 -- Seven percent of CEOs are in the process of moving their businesses out-of-state. Another 21 percent are giving major consideration to doing so.
 -- Of those planning a move, the aggregate loss to the state will be more than $500 million in annual sales and about 3,000 jobs.
 -- The companies that are leaving are all well-established, having done business in California at least 10 years. Nearly half of them have been in the state for more than 20 years.
 "Everyone hears about it when a large corporation announces that it's moving a division out-of-state," said Bill Williams, president of The Executive Committee.
 "But what our survey shows is that the small- and medium-sized business is besieged too. Since these companies are the ones where experts project the most job growth in the future, our survey sounds an alarm for anyone who values business' presence and jobs in this state."
 Here is a summary of findings from 321 respondents, who run companies from $2 million to almost $1 billion in annual sales:
 -- More than half the CEOs have been solicited by another state or a foreign country to move their businesses out of California. This kind of lobbying pressure is even being applied to businesses with annual revenues as low as $5 million.
 -- Workers' compensation is the state policy that most distressed CEOs, followed by state income taxes and state business taxes.
 -- CEOs chose these state policies for change:
 1. Reform worker's compensation system -- 88 percent
 2. Reform tort liability -- 84 percent
 3. Comprehensive public education restructuring -- 78 percent
 4. Increase water supply & availability -- 70 percent
 5. Affordable housing initiatives -- 51 percent
 6. Reform state initiative process -- 47 percent
 -- CEOs love the weather, the recreation and the colleges and universities in California. But they are most distressed about the cost of health care, housing and labor.
 -- CEOs repeatedly identified attorneys and the legal system as a key source of the state's problems.
 -- Solutions mentioned repeatedly:
 - Restructure worker's compensation and eliminate stress claims;
 - Term limits for legislators;
 - Pay government employees based on performance;
 - Eliminate the initiative process in state elections;
 - Increase business involvement with government, community.
 "We conducted this survey because some of our members who are dissatisfied with the state asked us to find out how widespread the dissatisfaction was," says Williams. "As CEOs, they are goal-oriented and action-oriented. They want something to be done."
 About 700 members of The Executive Committee in California run companies with more than $20 billion in annual sales combined. They employ about 135,000 people.
 California Business in Crisis
 The Executive Committee Report
 March 6, 1992
 California Companies Going Way of Condor? -- Are small- and mid- sized companies an endangered species in the state? Seven percent of CEOs are in the process of moving their businesses out-of-state. Another 21 percent are giving major consideration to doing so.
 Jobs, Revenues on Line -- Of those planning a move, the aggregate loss to the state will be more than $500 million in annual sales and about 3,000 jobs. Companies leaving are well-established, with at least 11 years here.
 Wooing Golden State CEOs -- More than half the CEOs have been solicited by another state or a foreign country to move their businesses out of California. This kind of lobbying pressure is being applied to businesses with annual revenues as low as $5 million.
 Love the Weather; Hate the Climate -- California's weather still is a winner; 87 percent of CEOs gave it a positive rating. But almost three-fourths of the CEOs said they are dissatisfied or very dissatisfied with the climate in California for their businesses.
 Stressed about Stress Claims -- Where do CEOs want reform? Worker's compensation got votes from the highest number of CEOs -- 88 percent. Many wanted stress claims to be eliminated or restricted. "We all have stress," they said.
 Legal System Takes a Lickin' -- Again and again, CEOs blamed many of their problems on an over-active legal system, or an over-abundance of attorneys in the state; 84 percent wanted to see tort liability reform.
 Corporate Solutions Suggested -- Pay government employees based on performance. Recruit CEOs to work with government agencies on restructure and reform. These were among the solutions suggested by CEOs.
 -0- 3/10/92
 /EDITOR'S NOTE: The Executive Committee is a San Diego-based organization with 700 California CEO members. These findings come from 321 respondents, who run companies from $2 million to $500 million in annual sales. A copy of the full report is available to journalists from the contacts./
 /CONTACT: Michele Molnar, 619-582-9765, or Ellen Sterner, 214-828-2300, both of Sterner and Associates for The Executive Committee/ CO: The Executive Committee ST: California IN: SU:


DM-KJ -- SDFNS1 -- 6687 03/10/92 07:33 EST
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Date:Mar 10, 1992
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