Chief executives support Mass. healthcare law

While corporate America usually opposes government mandates on business, two out of three chief executives of Massachusetts' largest and most successful businesses and employers applauded the precedent-setting Massachusetts law requiring employers to give health insurance to their workers.

Their reasoning boils down to this: We provide coverage, and it's unfair that other employers don't.

''Healthcare is in a crisis in America, and any bold solutions are progress," said David Kenny, chief executive of Digitas Inc., a Boston media company. ''To sit and admire the problem and not do anything about it is irresponsible."

Chief executives from Globe 100 companies and other big Massachusetts employers, in interviews, said they are extremely optimistic that revenues and profits this year would exceed last year's -- two-thirds plan to hire -- but they had grave concerns about looming threats to the US economy.

They also predict that the Red Sox's chances of going to the 2006 World Series are roughly even and Attorney General Thomas F. Reilly has the best shot at winning Massachusetts' governorship. Most call the high cost of living the biggest obstacle to state job growth.

This year for the first time, The Globe 100 CEO survey was expanded to interview chief executives from all 224 publicly traded Massachusetts companies eligible for The Globe 100, including companies that failed to make the list; CEOs of 34 out-of-state companies that are among the 100 biggest employers in the state; and chief executives of all other companies and organizations that rank among the 100 biggest employers, including nonprofits and privately held companies. A total of 115 CEOs responded.

Massachusetts has the third-highest housing prices in the country, and 53 percent of the chief executives surveyed chose ''high cost of living" as the state's biggest economic challenge, far outpacing the 17.9 percent who cite the tax burden.

''Talent and ideas are the real fuel for the leading companies in Massachusetts," said Monique da Silva, managing director of MS&L Boston, the global public relations and communications firm that helped develop and conduct the Globe survey. ''It's clear that executives here are concerned about their ability to continue to attract the human capital they need to continue to grow and innovate. They are worried that economic factors beyond their control will cost them their competitive edge."

High housing prices make it difficult to hire graduates of Boston-area colleges or recruit talent from other states. ''Every time we try to bring someone in from out of town they want to negotiate a higher salary to compensate for the cost of housing," said Roger Little, chief executive of Spire Corp., a Bedford solar and medical equipment maker. ''The housing is too expensive," he said. Spire's solution: Hire locally.

''It's hard for me to tempt someone to come to Massachusetts," said Dr. David Barrett, Lahey Clinic's chief executive in Burlington. He said many doctors and medical technicians, while well paid, don't earn as much as financial industry employees, their competitors in the local housing market. ''Pediatricians are making $140,000 to $150,000" and can ''barely can buy a house" for a family of four, he said.

While 40 percent predicted the US economy would be stronger next year, only 19 percent thought Massachusetts would improve. Just 2 percent of chief executives ranked the state's business climate as ''very good." But half rated it good and 42 percent rated it fair.

The health insurance plan passed by state lawmakers last month makes financial sense, the chief executives said, though they are concerned it could put a strain on the state's budget or be devastating to small business owners. ''But the reality is we're all paying for their care anyway, and often that's at the most expensive place, which is the emergency room," said Jan A. Miller, chief executive of Boston-based Wainwright Bank & Trust Co. ''If that can be replaced with better, more efficient healthcare," he said, ''I'm in favor of that."

As commerce goes global, Boston-area chief executives increasingly sit at the helm of international operations. That is a dramatic change from two decades ago when Boston was dominated by BayBanks, Digital Equipment Corp., or other companies with their primary operations in-state.

Boston-based CRA International Inc. has a large Middle East consultancy in London and Bahrain that has benefited from the run-up in oil prices. LoJack Corp.'s headquarters are in Westwood but its car security systems are made by a Malaysian contractor. Acton-based Kadant Inc. runs plants in Massachusetts but derives more than half its sales of paper industry manufacturing systems overseas. Kadant recently booked the biggest single order in its history: $16 million, from a Chinese paper maker. Chief executive William A. Rainville would dread a trade war with China.

''I'm fairly optimistic but worried about those big things you have no control over, like oil or world incidents like terrorism that have the power to change things terribly and without warning," said Paul Sagan, chief executive of Akamai Technologies Inc., the Cambridge Internet company that is The Globe 100 company of the year. ''Otherwise, things seem to be strong."

In response to whether the United States should launch a preemptive strike against Iran to prevent nuclear development, 59 percent of chief executives said ''no" and 32 percent ''don't know."

But the chief executives were open to change, whether making it easier for undocumented residents to become citizens (67 percent) or a Securities and Exchange Commission proposal to broaden disclosure of executive pay (64 percent said it would not affect their disclosure). Most (81 percent) agreed the Sarbanes-Oxley Act of 2002 requiring more accountability by corporate boards in the aftermath of Enron Corp.'s scandal was a waste of the money spent implementing new audit procedures.

LoJack chief executive Joseph Abely took the minority view. Sarbanes-Oxley requires ''clear reporting up to the chief executive by all people in the company on things they observe. Enron's former CEO Kenneth Lay said, 'I didn't know what was going on,' " Abely said. Sarbanes-Oxley ''makes it easer for the CEO, CFO, and COO to make more informed decisions."

Most see biotechnology and other technology industries as the most powerful engine for the state's future growth. Biotechnology was cited by 64 percent of chief executives as most likely to drive Massachusetts' future economy. High technology was second at 35 percent, followed by financial services, 26 percent.

''There are literally hundreds of embryonic companies all around the Bay State, a lot of them in Cambridge, right on the verge of tremendous discoveries," said Harold Brown of The Hamilton Cos., a Boston condominium and apartment developer. ''If just 5 percent of them achieve fruition they're going to spawn whole new industries."

How the survey was conducted: The confidential questionnaire for The 2006 Globe 100 survey of chief executives was developed by Globe business editors in collaboration with MS&L Boston, a global public relations and communications agency. The survey was conducted by MS&L Boston staffers using e-mail and Internet survey tools between April 10 and May 4.

Kimberly Blanton can be reached at blanton@globe.com.