JCI CEO's personal battles contrast with ethics-champion role
Since he ascended to the top job at Johnson Controls two years ago, CEO Alex Molinaroli has championed a strong ethics policy for the supplier’s 130,000 employees around the world.
Now, for the second straight year, Molinaroli is facing questions about his own judgment, at least in his private life.
Johnson Controls was named one of the world’s most ethical companies by the Ethisphere Institute in 2015, the ninth year running the company achieved the honor.
In a letter to employees in January 2014 about the ethics policy, Molinaroli wrote: “In a complex, intensely competitive world, the choices we face on the job aren’t always so clear-cut. Ethical dilemmas are a reality of our world. Our Ethics Policy gives us all a framework to identify and address those dilemmas. It promotes a common understanding of right and wrong across all Johnson Controls businesses, wherever we operate.”
In the letter, he urged employees to regularly consult the policy document and ask questions when in doubt.
Later that year, Molinaroli’s extramarital liaison with consultant Kristin Ihle prompted Johnson Controls to fire the firm that employed her and strip Molinaroli of $1 million in bonus money. The aftermath of his divorce from his wife of 28 years, Patsy, was the stuff of tabloid pages.
Most recently, Molinaroli’s judgment has been questioned following disclosures that he paid legal bills for and provided substantial financial support to Joseph Zada, who was convicted Sept. 3 of running a $50 million Ponzi scheme.
Through a spokesman, Molinaroli has declined to discuss the Zada matter with Automotive News. "He's done talking about this,” the spokesman said.
Personal vs. business
David Whiston, a Morningstar analyst, said he doesn’t believe Molinaroli’s personal issues affect the business outlook for Johnson Controls. But, he says, the Zada case “raises the inherent risk of there being poor judgment on the business side because of poor judgment on the personal side.”
Molinaroli’s troubles mark a turn of events for a Johnson Controls lifer, a consummate company man who rose to the top through sheer persistence.
In a posting on his LinkedIn page in April 2014, Molinaroli mused on the obstacles and adversity he overcame on his way to becoming CEO of Johnson Controls.
In the folksy essay, titled: “Career Curveballs: Know When It’s Time to Abandon Your Plan,” Molinaroli likens rejections in his own career to the early failures of Walt Disney, Bill Gates, Michael Jordan and Tom Landry.
“Walt Disney was fired by a newspaper editor because he lacked imagination. And Bill Gates dropped out of Harvard and failed at his first business,” wrote Molinaroli. “My career too started out with some rejection after graduation when I was searching for the right job.”
But the Charleston, S.C., native was determined to succeed.
“I came across an ad indicating that Johnson Controls was looking for sales engineers,” he wrote. “They didn’t know me, but I knew them, and I set my sights on landing a position. I chased them down. I wouldn’t let up. And I got that job.”
Molinaroli started his career in the company’s building efficiency business in 1983 and has stuck with Johnson Controls ever since, rising methodically through the ranks to his CEO appointment in October 2013.
Molinaroli’s LinkedIn biography says he “championed the development of consistent and effective sales management disciplines within Johnson Controls and worked to expand that consistent approach on a global basis.”
He received his bachelor of science from the University of South Carolina in electrical and computer engineering, electrical and electronics engineering and received his MBA from Northwestern University’s Kellogg School of Management.
Molinaroli’s LinkedIn page says he has a number of philanthropic interests including children, civil rights and social action, education, health and social services.
In his letter to employees on ethics, Molinari says: “The Company’s ongoing success stems from our deeply engrained [sic] culture of ethics and integrity which strengthens our relationships with our customers, employees, suppliers and communities.”
Said Whiston, the Morningstar analyst: “If you’re an employee, it’s got to make you scratch your head.”
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