how CEOs are navigating the Harris-Trump race

In a deeply divided US, everyone has strong views about the presidential election — except, it seems, most of the people running the country’s biggest companies.

All year, corporate leaders have publicly ducked questions about the race, even as many of them were privately torn.

Typically, they liked Republican Donald Trump’s emphasis on cutting regulation and corporate taxes but feared his penchant for picking fights and imposing tariffs. Most valued Democrat Joe Biden’s predictability but felt his administration was fundamentally anti-business.

Biden’s decision in July to pass the torch to Kamala Harris has changed that calculus, however, prompting some CEOs to take a second look at the choice.

The vice-president’s rapid rise in the polls has also challenged their expectations for what type of administration they will have to work with by January: while Biden trailed Trump badly in the polls, the Financial Times poll tracker now shows the race essentially tied.

“In a matter of weeks, the business community has gone from readying itself for a Republican-run Washington to scenario planning for a wide range of outcomes,” said Ken Spain, a Republican consultant who advises business leaders.

“Many are hedging their bets given the volatility of the political environment.” 

Even as she targets the prices of prescription drugs and groceries, Harris’s long-standing ties to Wall Street and Silicon Valley have raised hopes among some executives that she might rethink some of Biden’s tough stances on competition, labour and financial services policy.

If so, the choice between stability and a pro-business agenda would not be quite so stark.

“If you are a CEO, what do you do now? You need to have a vigorous discussion with the policy team on the Harris side about how can [they] attract business to be partners in the future,” said Richard Edelman, chief executive of the PR firm Edelman, who advises CEOs.

“I don’t think people are assuming that as it was under Biden, so it will be under Harris,” he added.

Historically, US business leaders overwhelmingly backed Republicans. Between 2000 and 2017, 57 per cent of the CEOs of S&P 1500 companies gave to Republican federal candidates, 19 per cent gave to Democrats and the rest split their contributions between the two parties, according to a National Bureau of Economic Research study.

But Trump never received that level of support: over the past eight years, just two Fortune 100 CEOs have disclosed donations to Trump, according to Jeffrey Sonnenfeld, president of Yale University’s Chief Executive Leadership Institute.

In the 2020 election, business groups were among the first to call on Trump to respect the results of the vote he disputed, but they had largely stayed on the sidelines before then.

“The public company CEOs don’t see themselves as political voices. They are hired hands,” Sonnenfeld said. “They won’t get involved unless and until there is a crisis.”

So far this year, CEOs have not opened their wallets. As of June 30, just five of the 221 members of the Business Roundtable, the most prominent CEO lobbying group, had donated to either candidate, according to Federal Election Commission data.

Biden received money from four BRT members — the CEOs of Centene, Kaiser Permanente, Stripe and Suffolk — while Trump got the support of Blackstone’s Steve Schwarzman.

Donations made to Harris will start to become public on Tuesday. She has said she raised $200mn overall in her first week. On the Republican side, Tesla CEO Elon Musk has announced a contribution to a pro-Trump super Pac which has yet to be disclosed.

Some advisers say they believe CEOs are starting to come off the fence.

“Existing Democratic supporters who had pulled back or weren’t supporting at the presidential level . . . are back and re-engaged,” said Daniella Ballou-Aares, CEO of the Leadership Now Project, which brings business leaders and intellectuals together to support democracy.

Roughly 40 of her members are attending the Democratic convention, four-fifths of whom decided to go after Harris’s ascension, she said.

A professional services firm leader who advises top executives added: “They feel energised that there’s someone who they think, based on her history, is more likely to want to engage, want to listen.”

The more Trump talks about revenge for the 2020 election on the campaign trail, the more he reminds business leaders of his chaotic governing style, others added.

“Business people want to go forward. They have zero interest in relitigating the 2020 election,” said Bill George, former CEO of Medtronic, now executive fellow at Harvard Business School.

“What CEOs want is predictability and stability. We’ve gone through one crisis after another. Business people hate this stuff.”

Even so, business leaders also say there is more support for Trump than the public record would suggest, because public company CEOs want to avoid alienating customers and investors by supporting a polarising candidate.

Most of Trump’s vocal support has come from founders such as Musk, Schwarzman and Citadel’s Ken Griffin.

“If you’re a Fortune 500 CEO there is very little upside and a lot of potential future job risk in coming out for Trump,” said Ankur Jain, a serial entrepreneur and CEO of Bilt Rewards.

“If you’re a hired CEO, there’s a real risk of backlash and being fired in coming out for Trump. If you’re an owner you can’t be fired.” 

Public neutrality does not mean CEOs are not paying attention. Since July 1, 319 US companies have mentioned the upcoming election on their earnings calls, nearly double the number from four years ago, according to analysis by AlphaSense.

The election is particularly on the minds of executives whose companies are benefiting from Biden’s signature industrial and climate policies and those that import goods from overseas.

They fear that Trump might repeal or refuse to implement the incentives for green energy and semiconductor projects and impose crippling tariffs.

“There is a bit of wait and see, but it’s a bit more pronounced than we’ve seen in the past, because of the fear that some of these incentives will be taken away,” André Lacroix, Intertek CEO, said on the testing firm’s earnings call.

For the vast majority of business people, this week’s Democratic convention in Chicago will be their first real chance to see whether Harris’s policies will differ from Biden’s enough to change their view of the presidential contest.

So far the evidence is mixed. Harris’s choice for vice-president, Minnesota governor Tim Walz, earned plaudits for finding middle ground with Uber and Lyft on higher wages for ride share drivers. But Walz has also drawn criticism from his home state chamber of commerce over taxes.

Some executives were put off when Harris used her first major economic policy speech on Friday to promise a federal ban on price gouging and tough scrutiny of mergers that undermine competition.

But others took a more relaxed view, because Harris has shown a willingness to move to the centre on other issues.

She has dropped her support for a fracking ban and national health insurance, and in Friday’s speech she pledged to cut unnecessary red tape and create “a stable business environment with consistent and transparent rules of the road”.

“It’s politics, it’s August, she is going into the convention and she has got to buff up her progressive front,” Edelman said, “but she is still a work in progress on trade, drug prices and all sorts of things.”