MOST FAST-GROWTH CEOS TURN NEGATIVE ON CLINTON ECONOMIC PROGRAM ACCORDING TO COOPERS & LYBRAND'S 'TRENDSETTER BAROMETER'
WASHINGTON, May 12 /PRNewswire/ -- CEOs of America's fastest growing companies, who earlier were divided about the effectiveness of the Clinton economic program on business growth, shifted to the negative side during the first quarter of 1993, according to Coopers & Lybrand's latest "Trendsetter Barometer" survey. Fifty-one percent of CEOs surveyed now express a negative outlook on the Clinton program, a jump of 17 percentage points from 34 percent in January. Only one-quarter of fast-growth CEOs currently say they are positive about the Clinton program's potential to move the economy forward, and another 24 percent say they are neutral, "Trendsetter Barometer" reveals. "Many of these companies are worried about a perceived lack of spending cuts in the plan," explains Sam Starr, a partner with Coopers & Lybrand's National Tax office in Washington. "In fact, spending cuts were cited by nearly half of all fast-growth CEOs as the most important single issue missing from the Clinton program. Specifically, survey respondents called for elimination of government waste and ineffective programs, and some limits on entitlement growth." According to "Trendsetter Barometer," these CEOs also felt the Clinton economic proposals demonstrate a lack of empathy for business and have little potential to create many jobs. These CEOs also had questions about the feasibility of the yet-unrevealed new health-care reform program. On the positive side, a large majority of CEOs surveyed say that Clinton's proposal to reduce the capital gains tax for smaller companies would be effective in stimulating business growth. According to the survey, almost two-thirds (65 percent) of the fast-growth CEOs felt a capital gains reduction of 50 percent for individuals investing in certain "C" corporations would be effective as an incentive for investors to seek out smaller growth companies. A majority (57 percent) also indicated that a permanent investment tax credit provided for firms under $5 million in revenues, combined with a credit through 1994 for larger firms, would be effective, although the administration is now acknowledging it may be willing to concede this incentive to enhance passage of its larger program. More than 80 percent of CEOs expressing negative opinions of the Clinton proposals are also critical of plans for increased taxes, citing an inequitable balance between spending cuts and tax reform, the survey reveals. Less than one-third (31 percent) of CEOs surveyed say the Clinton plan represents a strong start toward debt reduction. Fast- growth CEOs -- by a margin of 3 to 1 -- also say they do not favor delaying deficit reduction efforts until the economy is stronger, according to the survey. "The CEOs most concerned about the Clinton economic plan, and its balance between spending cuts and tax increases, appear to be firms with unusually high growth expectations," says Starr. "These high flyers are more likely to see the pitfalls in the new plan, because they are investing more and have more at risk." Clinton plan naysayers tend to be more bullish on their own growth, the survey found. CEOs expressing negative opinions about the Clinton plan say they expect a 28.8 percent company growth rate over the next 12 months, outpacing an expected growth of 25.8 percent among those favorable toward the plan. This contrast carries over to employment outlook: CEOs with negative views on the plan expect to add 15.9 percent to their composite work force this year, compared with only 13.4 percent for CEO's with positive views of the plan. Coopers & Lybrand's "Trendsetter Barometer" is developed and compiled by the firm's Entrepreneurial Advisory Services group with assistance from the opinion and economic research firm of Business Science International. At each Coopers & Lybrand office, an Entrepreneurial Advisory Services team is available to serve the needs of growing and midsize companies. One of the world's leading professional firms, Coopers & Lybrand provides services for enterprises in a wide range of industries. The firm offers its clients the expertise of more than 16,000 professionals and staff in 101 U.S. offices and more than 66,000 people in 120 countries worldwide. -0- 5/12/93 /NOTE TO EDITORS: Coopers & Lybrand's "Trendsetter Barometer" interviewed CEOs of 400 product and service companies identified in the media as the fastest growing U.S. businesses over the last five years. The surveyed companies range in size from approximately $1 million to $50 million in revenue/sales. Graphic art available upon request./ /CONTACT: Maggie O'Donovan of Coopers & Lybrand, 212-536-3174/
CO: Coopers & Lybrand ST: New York IN: FIN SU: ECO
WB-LR -- NY051 -- 7588 05/12/93 12:45 EDT
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|Date:||May 12, 1993|
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