Return to Transcripts main page

Lou Dobbs Moneyline

ENCORE PRESENTATION/Hail to the Chiefs

Aired September 03, 2001 - 18:30   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LOU DOBBS, CNN ANCHOR: They are as powerful as politicians, as recognizable as celebrities and always on the line. Tonight, a special edition of MONEYLINE: "Hail to the Chiefs."

Good evening and welcome to a special edition of MONEYLINE. Tonight we take a look at some of the most powerful people in America, not elected officials, corporate CEOs. Many of us depend upon them for our jobs, we trust them with our savings. We look to them for inspiration and innovation.

But today their jobs are more difficult than ever. Some of them are definitely overpaid, some of them are barely holding on to their jobs, but all are facing more scrutiny than ever. They are also facing the toughest business environment in a decade. Stock prices are down, the economy has slowed dramatically and profits are shrinking.

Instead of companies growing, they are scaling back. It's a shakeout of massive proportions and in some industries, unprecedented. In the end only the very strongest corporate leaders will still be standing. Tonight we look at CEOs under the most scrutiny and the rare few whose companies are thriving.

But first some perspective. Susan Lisovicz reports the cult of the CEO and how our image of CEOs has changed with the times.

(BEGIN VIDEOTAPE)

SUSAN LISOVICZ, CNN CORRESPONDENT (voice-over): In the 1990s, CEO stars rose faster than the Nasdaq, the folk heroes of a new economy. Bill Gates topped most admired lists even after being branded a predatory monopolist.

Michael Dell spawned a legion of loyal Dellionaires. Jeff Bezos named "TIME" man of the year, even though Amazon's never made a dime. Some old economy names also emerged as stars: Jack Welch of GE got a book advance that rivaled the Pope's. The cult of the CEO may seem like a distinctly modern development, but historian Nancy Koehn says recent corporate stars have plenty of predecessors.

NANCY KOEHN, HARVARD BUSINESS SCHOOL: Henry Heinz was the ketchup king. The pickle king was certainly a celebrity, in Pittsburgh and nationally. Andrew Carnegie had a lot of attention focused on him, much of it positive. George Eastman, who helped found the Kodak company and invent the Kodak camera, was a very popular, important man.

And J.P. Morgan, who was very much like Warren Buffet, Bill Gates today.

LISOVICZ: CEO worship isn't a new phenomenon. Experts say it flourishes along with the economy.

TOM STEWART, "FORTUNE": This is really a function of economic good times. People are happy, people are wealthy. CEOs are reporting good earnings. It's easy to look like a genius in a bull market, and we tend to celebrate genius.

LISOVICZ: But what happens when bull turns to bear, as this "Fortune" cover put it, "uh-oh." The recent stars are now under siege: Blamed for over investing in high-tech, blasted by regulators for using fuzzy math in reporting earnings, criticized by investors as history's longest expansion hit a wall. Stars of the past came under siege as well when their own boom came to a crashing end.

STEWART: By the end of the 30s, Ford was an isolated man attacked. Ford became an enemy of the people, if I can put that in quotes. And his reputation was really low by the time he ended his career.

LISOVICZ: Despite all the tough questions for today's CEOs, public opinion has not yet turned against them. Perhaps that's because unemployment remains low. It may be just a matter of time.

KOEHN: It will be very interesting to see how the CEOs position and specific individual status and stature changes over the next three or four years as the society, workers, managers, investors, families come to terms with the lessons of this second chapter of the information revolution, the dot-com implosion. I think we are going to see a filtering not only of business practices, but of who we admire and for what reasons we admire them.

LISOVICZ: And after the loss of nearly $4 trillion in market value, no one can blame investors for asking this of America's star CEOs: Show us you can shine in bad times as well as good.

Susan Lisovicz, CNN Financial News, New York.

(END VIDEOTAPE)

DOBBS: In this special Fourth of July program, we will focus on some of the most high-profile CEOs in the world, and examine what they're doing for you, the shareholder. We'll look at executives struggling to revive their companies, their stock price and of course their own reputations.

AT&T's Michael Armstrong, Hewlett-Packard's Carly Fiorina: some charge she's made H-P's problems worse.

UNIDENTIFIED MALE: A lot of them were there before, but I think some of them were exacerbated by some management missteps.

DOBBS: And Motorola's Christopher Galvin facing deep skepticism on Wall Street.

UNIDENTIFIED MALE: It would be a positive catalyst for the shares if the company were to decide to bring in new leadership.

DOBBS: Also: CEOs to watch. By year's end each of these executives will confront a critical test. We'll tell you who they are and what they are facing. All of that and a lot more tonight on this special edition of MONEYLINE: Hail to the Chiefs.

(COMMERCIAL BREAK)

DOBBS: Welcome back to our special Fourth of July edition of MONEYLINE: Hail to the chiefs. Now CEOs on the edge. Even for the most outstanding leaders this past year has been downright brutal. In many companies, all involved are suffering: The shareholders, the employees, even those in the corner office.

But a few leaders were facing problems even before this economy began to slow, People like Michael Armstrong of AT&T. Armstrong became CEO in the fall of 1997. He vowed to transform a lumbering corporate giant -- and he did, making one of the biggest bets in corporate history spending more than $100 billion to turn AT&T into Ma Cable.

But it was a losing bet: AT&T'S stock collapsed, and Armstrong is now trying to salvage the company by breaking it up. He's also trying to salvage his job.

Steve Young has his story.

(BEGIN VIDEOTAPE)

STEVE YOUNG, CNN CORRESPONDENT (voice-over): AT&T stock has skidded 60 percent in the last two years, most of that since chairman Michael Armstrong announced plans to take an American icon and chop it into four pieces. The buzz shifted from bundling products to spin- doffs and tracking stocks.

And since its debut, the first of those, AT&T Wireless, has crumbled by almost half. To get Ma Bell ready to boogie in the digital age, Armstrong made about $120 billion in investments, mostly for cable TV systems that could support broadband data, voice and high-speed Internet service.

SCOTT CLELAND, CEO, THE PRECURSOR GROUP: He made a very big bet. Essentially, he bet the farm on a cable broadband strategy, and the market shifted under him, and the strategy didn't work, and now he has to unwind his big bet-the-farm strategy. So he's had a troubled time.

YOUNG: Cleland says Armstrong and his telecom competitors are also being swamped by forces he calls "the perfect storm." Congress getting all the economics wrong in rolling out deregulation, and the telecom companies overestimating demand and building too much infrastructure. In this analysis, AT&T and its brethren are both victim and perpetrator. Most sellside analysts are now neutral moving toward negative on AT&T stock. They say its CEO, who arrived in 1997, has the toughest job in telecom, and rates a b+.

GREGORY MILLER, ABN AMRO: He's done pretty close to the absolute best he could with what he has had to work with, that is the consumer long distance industry on the cusp of absolutely falling apart before his arrival, and then falling apart while he began transforming the company.

YOUNG: If his investors are feeling pain, Armstrong's feeling less, but his pay is overshadowed at some of the regional Bell phone companies, still more or less protected monopolies. For example total take for Ivan Seidenberg, head of Verizon -- nearly $74 million.

Armstrong, whose company has 162,000 employees and nearly $66 billion in sales, had total compensation of $56 million, though that's mostly options that are underwater.

(END VIDEOTAPE)

DOBBS: Since Armstrong's first day as CEO on November 1, 1997, AT&T stock has tumbled more than 30 percent.

And Armstrong has plenty of company.

For one, Carly Fiorina. She took the helm at Hewlett-Packard in July of 1999 with an unenviable set of expectations. She was the first outsider to run Hewlett-Packard and the first woman ever to run a Dow 30 company. Fiorina promised to reinvent the H-P way. The result: More than $30 billion in market value erased.

Bruce Francis has that story.

(BEGIN VIDEOTAPE)

BRUCE FRANCIS, CNN CORRESPONDENT (voice-over): When Carly Fiorina arrived at Hewlett-Packard almost two years ago, the company certainly needed help. Growth was anemic at a time when the Internet frenzy and Y2K worries were thrusting tech spending into hyperdrive.

CARLY FIORINA, CEO, HEWLETT-PACKARD: Hi, it's me again. How are you?

FRANCIS: Fiorina, a leading executive at then-hot Lucent, looked like just what the company needed: a bold, strong-willed outsider ready to shake things up. But some analysts now are wondering whether the company's troubles have just gotten deeper.

NICK MOORE, JURIKA & VOYLES: A lot of them were there before, and then I think some of them were exacerbated by some management missteps.

FRANCIS: After a rocky start under Fiorina, HP stock soared almost 49 percent in the first year of her tenure, helped by a successful spin-off of Agilent and brisk sales to dot-coms, including Amazon.com. That early performance and bullish goals from Fiorina herself kept hopes high.

THOMAS KRAEMER, MERRILL LYNCH: I think to some extent she set pretty high expectations. I think that the initial results that they put up, you know, further raised those expectations, and they really weren't at all tempered.

FRANCIS: But those expectations and HP's stock would soon be deflated. Last September, HP confirmed that it was in talks to buy the consulting division of PriceWaterhouseCoopers for $18 billion.

Mid-November, just as Fiorina was supposed to give a keynote at the Comdex trade show, she was forced to make a confession: The company would miss earnings and revenue targets by a wide margin, partly due to a restructuring she had initiated.

FIORINA: It planned for real acceleration in our systems business.

FRANCIS: But two weeks later, many analysts were surprised by Fiorina's vow that HP revenues would increase between 15 and 17 percent in 2001: targets that would prove to be way too aggressive. Then, a little more than a month after that, Fiorina said that, quote, "the lights went out" on corporate tech spending and warned of profit and revenue shortfalls. Fiorina lowered guidance again in February and April.

In a series of cutbacks, Fiorina has slashed 4,700 jobs, delayed bonuses and even forfeited nearly $700,000 of her own pay. She still took home about $3 million in 2000. That doesn't include options, which are priced way above the current stock price.

At an analyst meeting earlier this month, Fiorina made sure she didn't over-promise again.

FIORINA: The global slowdown is now global in nature, and therefore, may last longer. Therefore, we are more cautious.

FRANCIS: But Wall Street won't let Fiorina blame it all on the economy.

KRAEMER: There are some self-inflicted wounds, some from old management and some from new, that certainly make the going for HP even tougher than what, you know, your average IT company is facing out there.

FRANCIS: And that could be the biggest risk, that Hewlett- Packard could become an average information technology company, not as nimble at manufacturing as Dell and without IBM's depth of patents and innovations. Making HP live up to its current "invent" slogan will probably take more time than the two years Fiorina has served so far.

Bruce Francis, CNN Financial News, New York

(END VIDEOTAPE) DOBBS: In the two years since Fiorina has taken the helm at H-P, the stock is down more than 35 percent.

Another CEO on the edge: Christopher Galvin at Motorola. A series of misteps has caused Motorola this spring to post its first loss in more than a decade. No, the man at the helm of this mobile phone pioneer is struggling to revive the company his family founded 73 years ago.

Fred Katayama has the story.

(BEGIN VIDEOTAPE)

FRED KATAYAMA, CNN CORRESPONDENT (voice-over): Chris Galvin took over the corner office at Motorola at a stormy time, 1997. Sales were slipping and the following year the company lost its leading position in the cell phone market to Nokia. Galvin cut thousands of workers in a massive restructuring. The new skipper soon looked like a savior. Motorola's stock more than doubled.

But now, Galvin's walking a dangerous path again. And this time, analysts say, he has himself to blame.

JEFFREY SCHLESINGER, UBS WARBURG: The first sin, if you will, of management since the '98 restructuring was to put back many of the 20,000 people that were let go in that '98 restructuring effort way too quickly. And therefore, when industry cycles turned against the company, such as the semiconductor industry or the handset industry, the company was not at a cost structure that was really appropriate for the business.

KATAYAMA: Last month, Moody's and Standard & Poor's lowered Motorola's debt rating. In April, Motorola posted its first quarterly loss in 15 years and cut its forecasts for the second quarter. Demand is slowing for both its chips and mobile phones, which together make up half of sales. What's more, Motorola had pushed Internet-enabled phones at a time when consumers wanted something cheap and simple. Now Nokia has more than double Motorola's share. The stock has fallen 65 percent from its 52-week high last summer.

So, Galvin is restructuring again. He is cutting 26,000 workers, slashing the number of phone models, closing plants and hiring outside manufacturers to cut costs. Some on Wall Street say Motorola should cut Galvin himself.

DAVID HEGER, A.G. EDWARDS: As far as a catalyst -- we were talking about Christopher Galvin. I think it would be a positive catalyst for the shares if the company were to decide to bring in a new CEO.

KATAYAMA: This shareholder says Galvin is under greater pressure now that his father, former chairman Robert Galvin, has left the board.

DAVID KATZ, MATRIX ASSET ADVISORS: It would have been much more difficult with his father on the board to change CEOs. Without him being there as an advocate, we think Galvin is more vulnerable, unless he produces.

KATAYAMA: Galvin is paying for his missteps. Last year, Motorola's board cut his bonus by 34 percent. It did not boost his salary of 1.3 million, and it did not award him new stock options.

Fred Katayama, CNN Financial News, New York

(END VIDEOTAPE)

DOBBS: Since hitting an all-time high last summer, Motorola has lost more than $90 billion of market value.

Ahead on this special edition of MONEYLINE, CEOs to watch. Executives facing their biggest executive challenges, and their stories are next.

(COMMERCIAL BREAK)

DOBBS: Welcome back to our special holiday edition of MONEYLINE: "Hail To The Chiefs."

We continue now with CEOs to watch. They're executives that face new challenges and obstacles in the second half of this year. For them, it is time for them to perform or fail.

Peter Viles has their story.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): They have promise to keep, battles to fight, reputations to rebuild and some awfully big shoes to fill. They share a spotlight that has never been brighter or less forgiving.

Call him the chosen one. Jeff Immelt, hand-picked successor to Jack Welch at General Electric. Whether he inherits a company that includes Honeywell or not, his will be an office where failure to meet expectations has not been an option for a generation.

JEFF IMMELT, FUTURE CEO, G.E.: What you can count on from me is, the standards of performance won't change. I mean, I think that's the bedrock of GE, and that will continue with me just as it exists with Jack.

VILES: What does a movie mogul know about the Internet? Terry Semel on Wall Street will soon find out. Semel ran Warner Brothers for years, and surprised a lot of people when he took the top job at Yahoo!.

TERRY SEMEL, FUTURE CEO, YAHOO!: This is the moment to take Yahoo!, the great brand, the great company, and to bring it all the way, really bring it over the top.

VILES: That moment is now. Yahoo! is suffering from the collapse of on-line advertising and it needs to develop some products and services it can sell. (on camera): Now, Immelt and Semel have yet to prove to Wall Street that they can get the job done, but the spotlight can be just as harsh on those who have done the job for years, and done it well.

(voice-over): Want proof that no job is safe in corporate America? Look at Charles Wang, chairman of Computer Associates. He founded CA, built it into the world's third biggest independent software company, and now he faces an all-out assault from investor Sam Wiley, who accuses Wang of mismanaging the company he founded, and is campaigning to throw out the entire CA board.

CHARLES WANG, CEO, COMPUTER ASSOCIATES: I think as any good fight it will invigorate us, but we are dedicated and committed to present back to the share holders value. We've got a great new business model, we've got the best people, we've got the best products, and know the software industry.

VILES: If there is a tougher repair job in America, it's not clear who has it. Jacques Nasser's assignment this summer at Ford is to explain, defend and execute another huge tire recall.

JACQUES NASSER, CEO, FORD: Our priority is to protect the safety of our customers and make them feel confident about the vehicles that they're in and the tires that they're on.

VILES: And it's not just the tires, either. Ford has been losing market share and slipping in quality surveys.

In a bull market, Wall Street loves a good story. Right now, investors just want results, and that is the challenge for Jeff Bezos at Amazon.com. Wall Street wants some old-fashioned profit by the end of the year. Will a pro forma profit in the fourth quarter be enough? Bezos can't even promise that.

JEFF BEZOS, CEO, AMAZON.COM: Well, there absolutely are not any guaranties, and we've always been very clear about that. But it is a goal. It's something we're working on very, very hard. We feel very good about it.

VILES: Amazon keeps expanding into electronics and appliances, but growth without profit isn't what it once was.

He's a PH.D and the original cable guy, and this summer he'll be single again. John Malone and Liberty Media will be free of their tense marriage to AT&T, and Malone is already acting like his old self, investing in European cable TV. What's next? Only Dr. Malone knows.

The thirteenth-richest person on the planet is also the cheerleader who has boosted morale at Microsoft during the government's antitrust assault.

STEVE BALLMER, CEO, MICROSOFT: We're doing what it takes to put the excitement and energy and new applications and scenarios into the PC that will let it have all the vibrance that's possible. VILES: Steve Ballmer has advantages other CEOs can only dream of. To start with, $30 billion in cash in the so-called Microsoft mattress fund.

If you wrote off Cendant after the accounting scandal there, you wrote off Henry Silverman, and you wrote off a chance to make some money in a tough market. How many other stocks can you name that have doubled in value this year? Credit Silverman's determination to avenge the accounting crimes by proving his is still a solid company.

HENRY SILVERMAN, CEO, CENDANT: If you're the victim, as our shareholders and our management and our board and our employees are, you're never embarrassed. I think you are angry.

VILES: No one has created more stock market value. John Chambers built Cisco into a half-a-trillion dollar juggernaut. "Fortune" even asked if he was the best CEO on earth. But no one has lost more market value either. More than $400 billion has washed away in what Chambers claims is a 100-year flood.

JOHN CHAMBERS, CEO, CISCO: What we've all learned, though, is that the peaks in this industry growth are going to be much higher than we anticipated, and the valleys much deeper.

VILES (on camera): Higher highs, lower lows, constant pressure to produce. That's what CEOs face in the year 2001. It is a tough job, but as one CEO put it recently, nobody's turning it down.

Peter Viles. CNN Financial News, New York.

(END VIDEOTAPE)

DOBBS: The spotlight can be unforgiving, and sometimes brief. As one top manager pointed out, in the past 18 months, 38 of the top 200 CEOs have left their jobs under other than normal circumstances, essentially a one-in-five failure rate.

Still ahead here on MONEYLINE: lessons from the corporate trenches, leadership wisdom from top executives at CEO Academy.

(COMMERCIAL BREAK)

DOBBS: Welcome back to our special holiday edition of "MONEYLINE: Hail to the Chiefs."

Tonight, we're looking at the challenges facing corporate America's most powerful executives. We've identified CEOs who are struggling to revive their companies. Now let's take a look at the CEOs leading companies that are thriving, even in the slowing economy.

A prime example: eBay CEO Meg Whitman. The online auction site has delivered consistent profits at a time when the rest of the sector is crumbling, and she has a stock return to boast about. It's more than doubled from its low.

And another winner: Ralph Lauren, CEO of Polo Ralph Lauren. His company in May reported strong sales and better-than-expected profits in a weak retail environment. And when other retailers are struggling, shares of Ralph Lauren remain high.

And Mattel CEO Robert Eckert. Eckert took it over after the disastrous tenure of Jill Barad. Still, the company did post a quarterly loss in April. Analysts say Eckert is making headway in fixing Barad's mistakes. Mattel's shares trading now near their 52- week high.

Another winner: Waste Management CEO Maury Myers. He took over the company in November of 1999. At the time, Waste Management was dealing with intense SEC scrutiny, juggling lawsuits resulting from accounting irregularities. And less than two years later, Waste Management's stock is near a 52-week high. And in the first quarter of this year, the company reported net income that more than doubled from a year ago.

Recently, I talked with Myers and I asked him if was surprised at how quickly the pace of the turnaround had moved.

(BEGIN VIDEOTAPE)

A. MAURICE MYERS, CHAIRMAN & CEO, WASTE MANAGEMENT: Well, we've -- we've done a lot of good work. About 57,000 people have done a lot of hard work, and we're pleased with the results so far, but we still have a lot of work to do.

DOBBS: Well, let's take a -- if I may, ask you to join me and take a look at the work that you've done, at least as reflected by your stock price. If we could put that up for you, Maury, I hope you can see that. Your 52-week high, charting it back to June of last year, that's -- that's a truly remarkable performance. What was, in your judgment, the basic cause, the catalyst for the turnaround?

MYERS: Well, you know, again, I'd say that it's really too early to call us completely turned around. But it's a lot -- a lot of people working together, working very hard, setting some tough targets and meeting those goals. The first year we really worked on just building the infrastructure of the company and stabilizing the company. We had a lot of trouble with our information technology, and so it's been a year of stabilization, and now we're moving on to improvement initiatives.

DOBBS: And financial reporting stabilization, as well. The SEC -- the SEC deal yesterday with Arthur Andersen, settling those claims on overstatement of a billion dollars in earnings, resulting in the largest civil fine, certainly, for a "Big 5" firm. Is all of that -- all of that happening under the preceding management. Is all of that behind you?

MYERS: Well, we still have a class-action lawsuit resulting from a 1998 -- well, we merged in 1998. In 1999, we had an earnings shortfall. We had another class-action lawsuit that we're dealing with.

But we're getting it behind us and moving on, and that's important, I think, for our shareholders. There's little cloud over the company that we need to get behind us.

DOBBS: And that settlement, which could be a significant one certainly, numbers that range as high as nine digits -- but how soon do you think you'll get that settled?

MYERS: Well, unfortunately, we're not in control of that process. We're working very hard. There are settlement discussions going on, and I'm not a very good predictor of that. I told investors that we'd hopefully have that done by last year, end of last year, but hopefully soon.

DOBBS: And in terms of your results, which has been demonstrated again by your stock price and your earnings, you're going to be able to keep the pace -- will you also in this environment be able to raise prices?

MYERS: I think so. To begin with, our prices are usually a small portion of a company's budget or an individual household's budget, for that matter. And we really look at price increases on a customer-by-customer basis. We think that we provide good value. We're working hard on...

DOBBS: Maury, I'm ready for that price hike.

(LAUGHTER)

OK. Maury, we thank you very much for being with us. We're out of time. I just want to say congratulations to you this -- at this point in your turnaround. And it's nice to talk to a CEO who's got so much good going on.

MYERS: Thanks, Lou.

DOBBS: Maury Myers, Waste Management.

(END VIDEOTAPE)

DOBBS: Coming up next in this special holiday edition of MONEYLINE, the nation's chief executive officer, the president's management record after 165 days in office. And they climbed the towering heights of power only to see their fortunes and reputations collapse. Next, the falling stars of corporate America.

(COMMERCIAL BREAK)

DOBBS: Now a look at America's most powerful chief executive officer, President George W. Bush.

Mr. Bush, a former businessman, is the first president to hold not a legal degree, but an MBA, a master's of business administration.

Tim O'Brien reports from Washington on the president's management style.

(BEGIN VIDEOTAPE) TIM O'BRIEN, CNN CORRESPONDENT (voice-over): Seven of this country's presidents have been generals, from Dwight Eisenhower back to George Washington, and more than half -- 26 of 42 -- were lawyers, like Bill Clinton and Richard Nixon.

But President George W. Bush is the first to enter the White House with an MBA, and some say the master's in business administration he earned from Harvard in 1975 has influenced his management style as has running a small oil company, the Texas Rangers, and most recently governing the state of Texas.

JERRY JASINOWSKI, PRESIDENT, NAM: He focuses on a few priorities, delegates a lot of the operational tasks, and tries to encourage a team operation. So it's a classic business style.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I am not afraid to surround myself with strong and competent people.

O'BRIEN: And the president has been getting good marks for the people he's put around him.

C. BOYDEN GRAY, FORMER WHITE HOUSE COUNSEL: He knows how to set up an operation and delegate and not get too much into details in a way that can both overburden himself and trip up his subordinates. And he's a very good judge of character.

O'BRIEN: And, says Gray, the president's businesslike demeanor has not been at the expense of a biting sense of humor.

GRAY: Oh, yeah, he's very, very funny.

O'BRIEN: When the media and others made fun of some of George Bush's statements...

(BEGIN VIDEO CLIP, MARCH 29 )

BUSH: And I actually said this...

(LAUGHTER)

... I know the human being and fish can coexist peacefully.

(LAUGHTER)

(END VIDEO CLIP)

O'BRIEN: ... Bush with his self-deprecating wit had the last laugh.

(BEGIN VIDEO CLIP)

BUSH: And instead of barriers and tariffs I said terriers and bariffs.

(LAUGHTER)

And you know what? Life goes on.

(END VIDEO CLIP)

O'BRIEN: Even his critics say the president's engaging style helped him push through an important education bill, not to mention that huge, although still controversial, tax relief package.

JACK QUINN, FORMER WHITE HOUSE COUNSEL: When the American people look back on their presidents, they don't talk about style, they don't talk about personnel, they don't talk about management structures or meetings or processes for arriving at decisions. They remember whether they got results.

O'BRIEN: His critics say Mr. Bush is too close to business, and in recent weeks his job performance rating has sunk dramatically in public opinion polls. With major battles looming on energy policy and health care, Mr. Bush may need more than a sense of humor and a businessman's style to win.

DAVID GERGEN, FORMER PRESIDENTIAL ADVISER: The conservatives can run the Republican party by themselves. In order the govern they need moderates. In order to run the country they need moderates. I think it's very, very important that he move for fully to the center.

O'BRIEN: The real business in Washington is politics, and in the end, it will be George Bush's political savvy more than his business acumen that determines the success of his presidency.

Tim O'Brien, CNN Financial News, the White House

(END VIDEOTAPE)

DOBBS: The president, of course, isn't the only person in the administration with business experience. Vice President Dick Cheney served as CEO of Halliburton. And Treasury Secretary Paul O'Neill was CEO of Alcoa, the best performing Dow stock of 1999.

Still to come on MONEYLINE, they're the highest paid people in the world. CEOs and their lofty paychecks. We take a look at trends in executive compensation, next.

(COMMERCIAL BREAK)

DOBBS: Welcome back to this special edition of MONEYLINE.

Imagine earning $150 million in your lifetime. Now, imagine earning $150 million in a year. That's what CEO John Chambers of Cisco Systems brought home last year, when you count salary, bonus and exercised stock options.

One financial magazine asked if John Chambers, is the best CEO on earth. He's not looking so terrific today. Cisco stock has collapsed along with the rest of the technology sector. Jan Hopkins now looks at the thorny controversial, difficult issue of executive pay, and whether shareholders are really getting what they pay for.

(BEGIN VIDEOTAPE)

JAN HOPKINS, CNN CORRESPONDENT (voice-over): Along with top athletes and Hollywood stars, CEOs are among the highest paid people on earth. With a slowing economy and a slumping market, CEOs are experiencing the downside of celebrity, with questions about their performance and their pay.

As this weeks "New Yorker" asserts, "The Chief executives of large American corporations, are, as a whole, the most overpaid people on the planet."

HOPKINS: So we went to CEO recruiting firm Spencer Stuart to find out how much these CEOs are worth.

QUESTION: What are you finding in terms of what CEOs are being paid right now?

JIM CITRIN, SENIOR DIRECTOR, SPENCER STUART: We find that the median and the total compensation package is $27 million. The median package. Which is a huge amount of money. That is cash compensation in the form of base salary and bonus, plus stock options and restricted stock. The 75 percentile of major CEO packages is $57 million, which is an extraordinary amount of money and really underscores the competitiveness for securing these top leaders in these companies.

QUESTION: How much of this package is stock options? And therefore, how much of their pay depends on how the company performs in the market?

CITRIN: The answer is, the vast majority is the value of the stock options. But it's interesting, because the mix is in fact changing and there's some changes afoot in at least what candidates are looking for in CEO compensation.

QUESTION: They don't want as many options, because of the (UNINTELLIGIBLE)?

CITRIN: Exactly. Common sense. But of course, again, in the Internet craze, there were poster people made of billion dollar dot com CEOs, now, there's a little bit more of a show me, and so, cash compensation and restricted stock is being requested or negotiated for by CEO candidates.

QUESTION: So companies are actually having to pay more out of pocket rather than through stock options to get CEOs.

CITRIN: Well, that's what certainly from the candidate's side of the equation, that's what's being demanded more. But again, as I mentioned, the companies are in more of a powerful position. So the balance of power is about even on that.

What we are finding and what we're recommending to clients on a best practice, is that we like when a CEO comes and actually invests some of his or her own capital into the company. This was the case with Terry Semel, who we recruited into Yahoo! as chairman and CEO. He invested $17 million of his own money to buy a million shares of Yahoo!, and in addition to that, he had the most shareholder-friendly CEO compensation package in the history of major corporate recruitments.

QUESTION: How do you mean by shareholder-friendly?

CITRIN: His -- this is all publishes and filed with the SEC. And published reports, $300,000 cash compensation. That's it. And he had only stock options, no restricted stock. He does not earn one penny of value unless the share holders win as well.

HOPKINS: There was also no shortage of shareholders who have lost, as their company stocks have faltered.

QUESTION: It's worse now, right, as the economy has softened, it's more challenging for these CEOs?

CITRIN: Well, in a rising tide, the saying goes, all boats are lifted. And now, great performance is required to distinguish between winners and losers. So you have terrific companies breaking through, like IBM and Microsoft, and you have a lot of their technology competitors that are under much more pressure.

HOPKINS: That pressure and competition means more turnover in the corner office.

CITRIN: The tenure of CEO positions over the years, and it's down to about 5 years at the median, from about 8 years earlier in the 1990s.

HOPKINS: So even though CEO pay is great, there are no more guaranties of lifetime employment.

Jan Hopkins, CNN Financial News, Stanford, Connecticut

(END VIDEOTAPE)

DOBBS: Coming up, they were once at the top of their game. Now there are thousands who wished they had never believed. The fallen stars of corporate America, next.

(COMMERCIAL BREAK)

DOBBS: We couldn't look at the universe of corporate America without noticing more than a few fallen stars. These are the CEOs who promised investors the world, charismatic leaders who preached what shareholders were led to believe was business gospel.

But that cost of that belief has been high, some investors have lost fortunes. And that ultimately sealed the fate of those executives as well.

(BEGIN VIDEOTAPE)

JEN ROGERS, CNN CORRESPONDENT (voice-over): Saul Steinberg personified living large in the 1980s, but he has had to downsize in the new millennium, after the former corporate raiders Reliance Group, a launching pad for hostile bids on Disney and Chemical Bank, hit a flood of red ink.

He sold his 3 story, 44 room mansion in the sky reportedly for $36 million, more than his company is worth these days. Reliance stock is B-listed on the New York Stock Exchange. And in June the company filed for bankruptcy.

MATT COYLE, STANDARD & POOR'S: Everything went wrong at the same time and the one thing they didn't have is time.

ROGERS: The Steinbergs' family stake once worth less over a billion, is virtually worthless today. Shareholders not much better off in line behind insurance regulators and creditors for any of the spoils.

Another victim of Chapter 11 this year, Warnaco and Linda Wachner. One of the first women to run a Fortune 500 company, Wachner, dubbed lingerie's iron maiden is credited with taking a sleepy women's undergarment manufacturer and creating a powerhouse with over $2 billion in sales. But Warnaco is now a fashion victim of a dismal retail environment, a nasty and public trademark dispute with Calvin Klein and a mounting pile of debt.

HOWARD DAVIDOWITZ, DAVIDOWITZ & ASSOC.: She has to take full and complete ownership for this debacle for the loss of billions of dollars of shareholder wealth. The stock was $44 a share, it's worthless to day. It will be worthless. The equity holders will walk out with zero.

ROGERS: The company filed for bankruptcy in June, with it's stock at 39 cents, suspended from the NYSE.

Sunbeam shares are also in the basement. Back in 1986 they jumped 50 percent the day Chainsaw Al Dunlap took over to turn around the troubled appliance maker. Heralded as a savior, Dunlap pumped the stock up with his signature moves, ending product lines, closing factories and of course slashing workers.

But the house of cards crashed in 1998 under pressure from an accounting scandal. And this year Dunlap was charged by the SEC with fraud. The former turnaround artist fired when the allegations surfaced, insists the charges are baseless.

Three different stories, all with the same ending -- steep losses for investors. In total, over $8 billion in market cap erased.

Jen Rogers, CNN Financial News New York.

(END VIDEOTAPE)

DOBBS: Up next, CEOs on being CEOs. We asked the people at the top about how they inspire their troops, how they manage their time, and still have fun.

(COMMERCIAL BREAK) DOBBS: Finally tonight, we recently attended a day-long seminar known to some as "The CEO Academy." For $10,000, new CEOs take a crash course in corporate leadership taught by corporate veterans. MONEYLINE spoke with a number of those executives about their views on leadership, teamwork, and why they love their jobs. Here's what they had to say.

(BEGIN VIDEOTAPE)

LARRY BOSSIDY, FORMER CEO, ALLIED SIGNAL: Business is going to be done faster all the time. But CEO a you should be thoughtful in terms of things you want to do. Because you can't afford to adopt initiatives and then have to retract from them because they don't work. So, you should be thoughtful in the things you want to do and then make sure they are successful.

KEVIN SHARER, CEO, AMGEN: There's probably one thing Larry Bossidy said is really going to strike home which is as the CEO you are now in a position to serve the company. And if you think you are going to lead by intimidation of exhortation you are wrong. You need to think about how can you serve the company and the people and all of its stake holders.

RICHARD SYRON, CEO, THERMO ELECTRON: You have to lead people, you have to articulate a vision and convince not only people outside the company, but inside the company.

JOSEPH NACCHIO, CEO, QUEST COMMUNICATIONS: Until I became a CEO I was not a CEO. So there are skills particularly in the finance area. I think there are, certainly I think the importance of being a good communicator is terribly undervalued and terribly important. I think it's one of the changes that's have occurred in the last 8 or 10 years.

SYRON: When you get to this level, when someone says, do you have a minute, sometimes you have to say no, at least not right now. And that may be contrary to a lot of basic instincts.

BOSSIDY: I think there's a lot of demands and you have a lot of occasions to go places you don't belong. And therefore I think you have to be careful in terms of how you spend your time.

NACCHIO: If you say, I'm available, who wants to talk to me or have me work on something, you will give never get to everything. The hardest thing is to decide what you're not going work on, because there is a lot of things that you are not going to work on.

FRANCIS SCRICCO, CEO, ARROW ELECTRONICS: You have like challenges, you have to like problems. You have to like being on all the time and having enormous amounts of energy.

SHARER: People ask me that all the time, are you really having fun. And what I say is it's kind of like raising kids. It's pretty tough but it you think there is going to be a good pay off in the future.

BOSSIDY: It is fun. Nobody takes themselves in there too seriously. NACCHIO: When you wake up in the morning and you don't smile because you have another chance at the game, you're in the wrong business. You better like doing this stuff, you better enjoy it.

SCRICCO: Not very many people get a chance to do these kinds of jobs, and it's worth every single minute of it.

(END VIDEOTAPE)

DOBBS: You better believe it. And in the best country in the world celebrating today Independence Day. That's MONEYLINE for this July 4th. Thanks for being with us, I'm Lou Dobbs. Good Night From New York.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com