While CEOs are often seen as being largely immune from punishment when they act badly, one corporate chief is finding that's not always the case.
KB Home (KBH) chief executive Jeffrey Mezger will see his annual bonus reduced by 25 percent after unleashing a tirade-laden rant at comedian Kathy Griffin, his Los Angeles neighbor. The executive's slurs became public after HuffPost released a recording of Mezger calling Griffin a "f*****g bald dyke," a "b****" and a "f*****g c***."
KB Home, which is known for building high-end homes that can cost upwards of $2 million each, said in a regulatory filing Mezger's behavior was "unacceptable and a negative reflection" on the company. It warned that Mezger would be fired if there was another similar incident.
Although CEOs aren't necessarily known for their warm and cuddly image, the public tends to be unforgiving of misbehavior from corporate leaders. Other CEOs that have recently come under fire include Uber's Travis Kalanick, who was forced toin July in part because of the company's sexist culture. Consumers often agree that it's appropriate for a company to fire a CEO if their actions are morally questionable, even if it wasn't against the law, according to a 2016 study from Stanford University.
For KB Home, the risk is that Mezger's verbal attack could hurt its brand, tying the clips of his vulgar language to the company's upscale, polished image. While the company said the executive "has always conducted himself in a professional manner" while at KB Home, that's not what many consumers might remember.
"So I now have a very clear idea of how Jeffrey Mezger and KB Home feel about women and what's acceptable treatment," one person wrote on Twitter.
The confrontation was sparked after Griffin's boyfriend called the Los Angeles Police Department to complain about noise from Mezger's house. In his rant, Mezger also said "Donald Trump kind of put the heat on" Griffin, a reference to a controversial photo she took of herself. Griffin was criticized for the image and apologized for it.
It's not clear how much the bonus cut will cost Mezger, who has been CEO since 2006 and earned $9 million in salary and stock awards last year, according to The Associated Press. The last time he earned a bonus, in 2014, he received $125,000.
Mezger's reference to Griffin's baldness refers to the comedian's decision to shave her head in support of her sister, who was undergoing treatment for cancer. Her sister died last week.