In Business This Week
EDITED BY MONICA ROMAN
Richard Belluzzo: Sweeter the Second Time Around?
Just a year into the CEO job at Microsoft, Steven Ballmer is already putting his mark on the company. In short order, Ballmer has shuffled executives around, sent a few packing, and put a team in place that is distinctly his. On Feb. 14 came Ballmer's boldest move yet: naming Richard Belluzzo as president and chief operating officer.
Belluzzo joined Microsoft in September, 1999. He started by heading up the software giant's long-foundering Internet operations. As that business improved, Belluzzo gained more power, overseeing the division that's responsible for creating many of Microsoft's next-generation Internet services. Now, he'll be overseeing the business operations, sales and marketing, and business development at the $23 billion company.
It's not a role in which Belluzzo has succeeded before. As CEO at Silicon Graphics, he failed to reverse the computer maker's slide--and resigned after 20 months on the job. Shortly after, he told BusinessWeek that he would be interested in a top job again. He's just gotten his second chance.
By Jay Greene
Patent Pounding at Amazon
Amazon.com won't be able to stop rivals from using a single-click online purchasing method similar to the one it claims as its own invention. On Feb. 14, a federal appeals panel lifted a pretrial order that had prevented Barnes & Noble from deploying the "express lane" feature. The ruling does not ultimately resolve the issue of whether Amazon deserves a patent on its single-click system. But it does allow Barnes & Noble customers to use the express lane while that question is being considered by the three-member Court of Appeals for the Federal Circuit. The case is on the cutting edge of so-called "business method patents." Critics argue that Amazon's claim is one of the most extreme examples of trying to patent a commonsense idea.
A Four-Wheel Retirement Plan
How does DaimlerChrysler's Chrysler Group plan to break even by mid-2002, despite grim prospects this year? One novel tactic: cleaning out older workers and unsold vehicles at the same time. The auto maker needs to shed 26,000 hourly and salaried workers as part of an aggressive restructuring plan. So retirement-age assembly workers will get an extra $35,000 to leave--half in cash, and $17,500 toward the purchase of a new Chrysler. The carmaker hopes this will help nudge more employees toward the door. If Chrysler can perk up flagging sales at the same time, all the better.
$10 Million: Par for the Course
It was bound to happen sooner or later. 2000 will go down in history as the year when the CEOs of the nation's biggest companies broke the elusive eight-figure pay barrier, earning on average $10.9 million, according to a Pearl Meyer & Partners survey of 50 companies. That's a 16% increase over 1999, fueled largely by stock options and bonuses.
While shareholders who watched their portfolios shrink may balk at the pay hike, it does have some logic. Most corporate boards made their pay decisions early in the year, long before profits and shareholder returns turned south in 2000. So the big pay raise is actually a reward for a job well done--in 1999. So will next year's pay raises reflect the 2000 market debacle?
Citi Heads for the Burbs
Citigroup is bulking up its New York metro presence. The nearly $800 billion-in-assets bank said on Feb. 12 it would buy 100 branches of European American Bank from Dutch group ABN Amro for $1.6 billion. EAB brings Citigroup a big increase in depositors in wealthy, densely populated Long Island. The deal will also add more than $15 billion in assets. EAB CEO Edward Travaglianti will stay on at Citigroup as president of the newly created commercial markets group.
A New Chef at Williams-Sonoma
Investors applauded the appointment of Dale Hilpert as chief executive of home-goods retailer Williams-Sonoma. On Feb. 13, they sent the stock up 8%, to $26.90. Hilpert, 57, is CEO of Venator Group, a $4 billion global retailer that was formerly Woolworth Corp. He is expected to breathe new life into the struggling San Francisco kitchen-equipment chain. Hilpert will have plenty to fix when he assumes his new duties on Apr. 2. The top priorities: streamline internal operations such as inventory, rethink the chain's growth plans, and improve merchandising at its Williams-Sonoma and Pottery Barn stores, analysts say.
Et Cetera...
-- Marriott International and Bulgari will launch a new luxury hotel brand.
-- Goodyear Tire & Rubber is eliminating 7,200 jobs, or nearly 7% of its workforce.
-- Quokka Sports, which provides online sports programming, will trim staff by 59%, or 217 jobs.
Cold Snap
ConAgra Foods blamed high energy costs, a slowing economy, and a brutal winter for what will be lower-than-expected earnings in the final half of its fiscal year. The $27 billion Omaha company, with brands such as Hunt's, Healthy Choice, La Choy, and Bumble Bee Tuna, expects a dip in its second-half pretax profits of about $110 million, or about 13 cents a share after-tax. On Feb. 14, the day after it made the announcement, ConAgra's stock declined 19.51%, to $20.01.
|
Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
Printer-Friendly Version
