I Goofed: US Airways Should've Disclosed CEO's DUI
Monday February 12, 4:08 am ET
Herb Greenberg (MarketWatch) submits: If a CEO gets dinged for driving under the influence, should a company have to disclose it? I went on CNBC’s "On the Money" Friday night arguing that in the case of US Airways’ (NYSE: LCC - News) Doug Parker it wasn’t necessary. Parker admitted Friday he had been arrested nine days earlier on a DUI.
My point was that this was a misdemeanor, his blood-alcohol level was barely over the limit and that short of it being something habitual or even worse -- an accident -- special disclosure wasn’t really necessary. I didn’t care that the company waited so long to make this news public, and then doing so only after it was discovered by a reporter. I didn’t view it as a cover up. I figure more CEOs than we know have been nailed for driving under the influence.
Yale management professor Jeffrey Sonnenfeld, author of “Firing Back: How Great Leaders Rebound after Career Disasters,” couldn’t have disagreed more. His point was that this was a crime, pure and simple, and that investors should be informed when a CEO commits a crime. (Right, I thought, so they should send issue a press release every time the CEO gets a ticket for speeding?)
Then I looked at the Arizona DUI law: In the very minimum, a DUI misdemeanor requires the offender spend at least one day in jail. That, in and of itself, would require disclosure – not just if he was sentenced but the DUI, since jail would appear to be a possible outcome.
It gets worse: Turns out, according to a statement issued Friday night by US Airways, Parker has a history of DUIs, with three other “alcohol related incidents in my twenties. Two involved driving under the influence (one a misdemeanor) and the third occurred in college while a passenger in a friend’s car.” He claims he got a “wake up call” years ago after getting married and having kids and that this was simply “a mistake.”
Maybe. Or maybe this time he got caught. I guess the good news is that he wasn't flying a plane. Bottom line: I goofed. If the CEO of a public company gets caught doing anything aside from a minor traffic offense, shareholders should be told. Period -- end of story.
Monday February 12, 4:08 am ET
Herb Greenberg (MarketWatch) submits: If a CEO gets dinged for driving under the influence, should a company have to disclose it? I went on CNBC’s "On the Money" Friday night arguing that in the case of US Airways’ (NYSE: LCC - News) Doug Parker it wasn’t necessary. Parker admitted Friday he had been arrested nine days earlier on a DUI.
My point was that this was a misdemeanor, his blood-alcohol level was barely over the limit and that short of it being something habitual or even worse -- an accident -- special disclosure wasn’t really necessary. I didn’t care that the company waited so long to make this news public, and then doing so only after it was discovered by a reporter. I didn’t view it as a cover up. I figure more CEOs than we know have been nailed for driving under the influence.
Yale management professor Jeffrey Sonnenfeld, author of “Firing Back: How Great Leaders Rebound after Career Disasters,” couldn’t have disagreed more. His point was that this was a crime, pure and simple, and that investors should be informed when a CEO commits a crime. (Right, I thought, so they should send issue a press release every time the CEO gets a ticket for speeding?)
Then I looked at the Arizona DUI law: In the very minimum, a DUI misdemeanor requires the offender spend at least one day in jail. That, in and of itself, would require disclosure – not just if he was sentenced but the DUI, since jail would appear to be a possible outcome.
It gets worse: Turns out, according to a statement issued Friday night by US Airways, Parker has a history of DUIs, with three other “alcohol related incidents in my twenties. Two involved driving under the influence (one a misdemeanor) and the third occurred in college while a passenger in a friend’s car.” He claims he got a “wake up call” years ago after getting married and having kids and that this was simply “a mistake.”
Maybe. Or maybe this time he got caught. I guess the good news is that he wasn't flying a plane. Bottom line: I goofed. If the CEO of a public company gets caught doing anything aside from a minor traffic offense, shareholders should be told. Period -- end of story.
