Trump struggles to keep CEOs on his side

The election of a businessman to the White House fueled a wave of optimism among America's CEOs. Now some of those same business leaders are turning on President Trump.

On Monday, Kenneth Frazier, the CEO of Merck, joined the growing list of executives who feel compelled by Trump's words and policies to take a stand against him.

Frazier, one of the country's most prominent black business leaders, quit Trump's manufacturing council to "take a stand against intolerance and extremism."

 

 

That appeared to be a reference to Trump's statement over the weekend blaming the deadly violence in Charlottesville, Virginia, on "many sides" after neo-Nazis and white nationalists clashed with counter-protesters.

Trump lashed out at Frazier within minutes, saying the resignation would give him "more time to LOWER RIPOFF DRUG PRICES!"

Then, on Monday afternoon, Trump specifically called out the KKK and neo-Nazis. By then almost two days had passed since the president's first remarks on Charlottesville -- and some of the nation's most prominent business leaders had filled the gap with denunciations of racism.

Business leaders have spoken against Trump before. In January, his ban on travel from certain Muslim-majority countries drew criticism from Amazon CEO Jeff Bezos, Starbucks boss Howard Schultz, Netflix CEO Reed Hastings, Apple's Tim Cook and many, many others.

In June, Tesla CEO Elon Musk and Disney's Bob Iger quit Trump's business council in protest of his decision to withdraw the United States from the Paris climate accord.

On Monday night, the CEOs of Under Armour and Intel followed Frazier and quit Trump's manufacturing council.

"Under Armour engages in innovation and sports, not politics," said the sports brand's CEO, Kevin Plank.

"We should honor -- not attack -- those who have stood up for equality and other cherished American values," said Intel chief Brian Krzanich, while lamenting "the serious harm our divided political climate is causing to critical issues."

On immigration, racism and climate change, CEOs have sought to provide the moral leadership they perceive to be lacking from the White House.

"America's leaders must honor our fundamental values by clearly rejecting expressions of hatred, bigotry and group supremacy," Frazier said in his statement on Monday.

Goldman Sachs CEO Lloyd Blankfein referenced such a leadership void in June when he fired off his first-ever tweet to criticize Trump's retreat from the Paris climate agreement.

"Today's decision is a setback for the environment and for the U.S.'s leadership position in the world," he said at the time.

Jeffrey Sonnenfeld, a Yale School of Management professor who leads the university's annual CEO summit, said business leaders are stepping up as trust in public officials declines.

"They recognize that they are some of the most trusted voices in society right now," Sonnenfeld told CNNMoney. "It's absolutely critical that they use that platform."

Sonnenfeld said he received emails from more than a dozen leading CEOs on Monday reacting to Frazier's statement -- and especially Trump's broadside.

"This has really hit a nerve -- attacking this great CEO," Sonnenfeld said.

Business Roundtable, a powerful lobby group of CEOs that advocate for tax reform, put out a statement condemning the violence in Virginia. The organization is chaired by JPMorgan CEO Jamie Dimon.

"America's business leaders are shocked at the violence that took place in Charlottesville, and we mourn the unnecessary loss of life. Racism has no place in our businesses, our communities or our country," the statement said.

 

Sonnenfeld predicted more corporate leaders "across sectors and across party" will come out against Trump.

It's a stunning reversal considering the euphoria among business leaders following Trump's election. A JPMorgan Chase survey published in February found that 76% of executives believed the new administration would help their businesses. Just 12% said they expected it to hurt.

The stock market soared as Wall Street cheered the administration's economic agenda. While stocks keep rising, market analysts say the recent gains have been driven more by corporate profits and economic growth than Trump's policies.

At the same time, CEOs have become frustrated with Trump's inability to get his tax, infrastructure, health care or deregulation plans through Congress.

A stunning 50% of the CEOs, executives, government officials and academics surveyed at the Yale CEO Summit in June gave Trump an "F" for his first 130 days in office. Just 1% gave him an "A."