A CEO in trouble typically has little impact on an election, but, in this case, Carly Fiorina who is running for Senate is the predecessor to Mark Hurd, the terminated HP CEO, and had similar problems that are now being revisited.  Meg Whitman is farther removed, but is self-funding her campaign as another wealthy ex-Silicon Valley executive and the crap storm could spread to her campaign as well.

There is an old saying about the only thing worse than bad press is no press and that is especially true in an election. If people don’t recognize your name, they are likely to vote either randomly or for the person they do recognize and both of these women’s opponents are career politicians. Gerry Brown, who is running against Meg Whitman, is actually an ex-Governor of the same state and can certainly argue experience as well.

Both Fiorina and Whitman need to have people remember their names and view them favorably in order to win the race.  At last count, while polls have the races as close, both women are behind likely being hurt by their initial excessively negative campaigns during the State’s primary which has effectively offset the current anti-incumbent sentiment in their respective races.

Visibility

The HP news coverage often mentions Fiorina giving her lots of coverage in what has been a very juicy story with an attractive woman and a failed affair in the middle.   The story has had lots of legs with high profile CEO Larry Ellison fueling the fire. In a large number of the pieces, Fiorina is mentioned as Hurd’s predecessor likely giving her strong name recognition from those entranced with the various leaks and clarifications from the variety of sources that are contributing to the continuing saga.

Whitman, on the other hand, isn’t getting any ink from this and that may turn out to be a better thing.

Perception

In most cases, Fiorina was being positioned initially as a bigger problem than Hurd was, but this seemed to change tone and the trend shifted to showcasing her as the lessor of two evils.  But she was still largely painted negatively particularly with regard to taking care of her people and keeping jobs in the country.  This could be problematic in a market where there are job shortages and concerns both about illegal aliens taking jobs and jobs being shipped overseas.   The reality underneath this is that she is unlikely to favor either group because doing so would prevent both her initial election and reelection and she does have a history of managing to metrics but perceptions not reality rule in an election and perceptions are drifting sharply negative as a result of this event.

For Meg Whitman, there is less of an exposure but the indirect connection is to chief executives as semi-royalty that care little for anything but their own personal agenda.  While that actually might accurately portray many career politicians, it is still viewed negatively and Whitman may be connected to Hurd as part of an increasingly undesirable class of heartless rich people.   In California, the blocks made up of groups focused on individuals rather than companies are very strong and even Silicon Valley companies have traditionally favored democratic rather than republican agendas which creates a lot of sensitivity to wealth and privilege  By association, Whitman should be taking a hit but not as bad as Fiorina.

Negative, Not Lethal

We are still some time before the California Elections, but the problems identified at HP are not unique and the likelihood that other problems connected to CEO excesses will likely continue and could accelerate. Given that investigations against companies like Oracle will drive negative perceptions towards ex-CEOs, you have to wonder whether one will drive the other.   But given both candidates are behind anyway Mark Hurd has likely just become their opponents’ favorite person. So while the impact isn’t great, given they are behind and the race is close, this event may be enough to keep them out of office, particularly if it leads to other similar events that reflect poorly on CEOs as a class.

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