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Compared with five years ago, the profile of the CEO has been transformed, and so has his or her perks. Stock option packages have changed, there is more transparency with stockholders, and there is more accountability, experts say. In addition, there is a sharpened focus on what companies are looking for and less of a willingness to let an executive "grow into the position."
"The best CEOs have multiple tools in their toolkits," said Leopold. "They must know how to be strategic, and they must be hounds for execution." Without those traits, the results can be disappointing. Leopold pointed to Research In Motion as an example of a company with leadership focused solely on execution. "Without that so-called strategy gene, they don't see the world around them. In RIM's case, [the company] didn't recognize the direction the mobile world was headed and the velocity with which it was going, so it couldn't respond accordingly, and that's what has put the company in a compromised position."
Conversely, IBM's former CEO, Sam Palmisano, could keep one eye on strategy and the other on execution, Leopold said. "IBM has done a phenomenal job of building a deep bench. There's no easy way to build into compensation how to measure what the CEO has done to reduce risk of a company. And that's what a CEO does: mitigate risk."
Forward-thinking companies are constantly evaluating their plans, with input from their top executives and shareholders. Some now offer equity stakes that last longer than the CEO's tenure. That's a controversial move, with some CEOs arguing it's an unfair plan because they have no control over the future. But proponents say that while it might be imperfect, it's a step in right direction.
Most importantly, compensation must be in keeping with the company's goals, financial or otherwise. The CEO's direction must result in a solid foundation for the future. As Leopold noted, "If you are a super CEO, you'll change the durability of a company not just superficially, but for the long haul."
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