The CEO Reputation Premium : Gaining Advantage in the Engagement Era

The past several years have not been easy for big business and its leaders : CEOs. Research has found that respect for corporate leaders and large multinationals has declined. Between the global financial crisis, spread of worldwide protest movements such as Occupy, backlash against executive compensation, and even employee revolts, CEOs have faced numerous threats to their reputation and those of the companies they run.

Despite this erosion in positive perceptions of CEOs, Weber Shandwick’s research continues to find that CEO reputation is a fundamental driver of corporate reputation, and is unwavering in its contribution to market value. Our newest research, reported herein, finds that global executives estimate that nearly one half of a company’s market value is attributable to its CEO. CEO reputation continues to be a premium form of currency and wealth in an economy where companies trade on their reputations every day. As Michael Fertik, founder and CEO of reputation.com, says, “Reputation is the new oil.” This CEO premium exerts enormous influence over enterprises and within the industries they operate, and should never be underestimated or neglected. What has changed, however, is the growing complexity of the global stakeholder audience coupled with a dynamic and radically changed media environment. The convergence of these new factors makes it harder than ever for companies to get heard beyond a whisper, leave a lasting impression, and figure out who holds the key to influence.

When it comes to shaping CEO and corporate reputation today, it is not just the usual suspects — investors, financial analysts, business media, regulators — whose perceptions matter most. As Goldman Sachs’ CEO Lloyd Blankfein rightfully admitted during the financial crisis, everyone matters now.