Co-Mingling Business & Personal Insurance

~Executives and Owners Need Advice~
The Los Angeles Times newspaper recently carried an article with the above headline. The article was of local and national importance because it involved the CEO of a large national company that provides many jobs in several major cities.
The firm is a stable older firm that has been pressured by Wall Street to get its profits up. Investors were not happy because the stock price has been stagnant for several years.
In response to the Investors call for action a new highly regarded CEO was brought in to run the company. The new CEO’s actions were calming to Wall Street. Things at the company became very promising and the great stress that pervaded the firm was easing. Management was beginning to relax now that the stock price stabilized and was heading up.
Significantly, the story pointed out that the 55-year-old CEO injured his spine in a skiing accident in Aspen over the Christmas holiday. It reported his condition as “stable,” a word chosen to minimize apprehension, but the article also laid out the fact that the CEO is on leave and his duties are being attended to by a top ranking Vice President of the firm. The details were suppressed for privacy reasons. No information as to the expected duration of the leave was expressed.
We have experienced similar stories from other intense and hard-hitting companies that the pattern of what lies ahead for the CEO and the company is very predictable.
Companies have little patience for disabled top executives to recuperate. Business must be tended to daily and with vigor. The disabled executive hopes to begin tenderly and work up to, once again, being a hard driving executive. We hope to be wrong, but our feeling is this man will almost immediately be permanently replaced. This is a sad happening in the career of a professional manager. If he recovers and becomes a viable candidate for a new management position he will have a new start, but disappointment will continue to depress him. A new position, at his age, will likely be with a smaller lesser-known company. Compensation will suffer and his ego will smart for some time.
But he may be permanently paralyzed to the degree he will not be eligible for a new job. If he recovers, or if he remains disabled, his personal financial concerns are great. The story and our assumptions based on experience with executive disability insurance helps all of us in being alert to the income cash flow needs of executives when their turn comes to be disabled.