Does KB Home's reaction to CEO rant signal a new age for executive accountability?

Leo Vartorella -

While CEOs of major companies have historically not been held accountable for public acts of bad behavior, with punishments mostly limited to slaps on the wrist, a new era for executive accountability may be emerging, according to The Washington Post.

Jeffrey Mezger, CEO of homebuilder KB Home, was recently caught ranting at his neighbor, comedian Kathy Griffin, using obscene and misogynistic language. Instead of simply publicly reprimanding him, KB Home announced they would be cutting Mr. Mezger's 2017 bonus by 25 percent and would fire him if he exhibited similar behavior in the future.

Charles Elson, director of a corporate governance center at the University of Delaware, believes the KB Homes situation is just one example of a broader shift in the way CEOs are held accountable for their actions.

"If you're willing to accept that kind of money, you're giving something up, and it's the separation of your private life and your public life," said Mr. Elson. "They've become quasi-public figures, and the standard by which they're judged is higher."

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