Is Your CEO A Fighter or A Quitter?
We are coming up on Q1 earnings. I expect we will see some large scale layoffs as my guess is that many CEOs believed their I-Bankers when they were advised that Fed Funds would be at 3% by Q1’24. Many CEOs will cut headcount in order to protect earnings. Doing so is the wrong long-term strategy.
If you have headcount to cut, you are not running your company lean enough to begin with.
If you truly have great employees as you tout on earnings calls, why are you letting them go? If you truly have great employees, it is better to keep them and issue lower EPS guidance. I understand that the stock will take a hit. That’s your fault for not educating investors and your Board that you value your people more than earnings.
We will find out this quarter how many CEOs will bite down on their gumshield and push back on investors when the going gets tough. My experience is that 99% of CEOs will cave as their variable compensation is tied to EBITDA to a degree. Therefore, EBITDA will get more love than the employee base.
Being that it is the weekend, we cut the below video from last year’s worlds tournament. The 65KG competitors, Rivera and Musukaev did not quit. They took the hard road. I want to see more CEOs do the same. When the sh*t hits the fan and the market ultimately goes to hell, we will be back with CEORater 2.0, and you can bet that CEOs that care more about their variable comp packages than their people will catch a ton of flack from us.