"It's going to be a waltz of elephants, and you want to be sure you don't get stepped on." -- Amos Hosetter, chairman of Continental Cablevision, which U S West is buying in the wake of telecom reformEDITED BY LARRY LIGHT, WITH OLUWABUNMI SHABIReturn to top
THE SWEET AND THE SOUR AT APPLE
NEW APPLE COMPUTER CEO Gil Amelio's fat pay package is coming under fire, this time in court. In a recent class action, much-feared shareholder lawyer William Lerach calls the $10 million-plus compensation for Amelio, who replaced the ousted Michael Spindler Feb. 5, "wildly excessive." At embattled Apple, Amelio will earn more than 42% above what he got heading National Semiconductor.
The suit questions how Apple can justify this when it didn't search outside for a CEO--and since its worst problems came after Amelio joined its board in 1994. Plus, Lerach decries Apple's guaranteeing Amelio a $10 million lump sum if it's sold within the next year. (Apple insists it's not for sale.)
Amelio has called his pay "what the marketplace commands," and Apple dismisses the suit as meritless. But Lerach's move commands attention: His track record against Silicon Valley targets includes a $20 million settlement from Apple in the 1980s. This action, which also charges Apple directors and two ex-CEOs with a grab bag of alleged chicanery, is filed in California courts, possibly because federal shareholder suits just became tougher to pursue.EDITED BY LARRY LIGHT, WITH OLUWABUNMI SHABI By Peter BurrowsReturn to top
THE HILL'S UNLIKELY MR. ENTERTAINMENT
SENATOR ORRIN HATCH, THE outspoken foe of wicked lyrics, isn't always the bête noir of show biz. The Senate Judiciary Committee chairman is pushing a measure that means big bucks for the entertainment industry--which has given him generous campaign donations. He recently denounced Hits from the Bong, a song from Sony Music, whose affiliate, Sony Pictures Entertainment, sent his campaign $1,000.
The Utah Republican is backing a bill that extends copyright protection from 50 to 70 years beyond a song- or screenplay writer's lifetime, arguing this brings U.S. law closer to international norms. That means music and movie producers could charge royalties for the two extra decades. After that, the material is free. Opposing Hatch are restaurants and others who claim they must pay unfairly large sums to license songs.
In 1994, when he ran for reelection, Hatch bagged $32,500 in contributions from media giants such as Time Warner, Paramount Communications, and Fox. The senator declines to comment, but Senate Judiciary Staff Director Manus Cooney says: "It's outrageous to suggest that...we're beholden to the music and motion picture industries." Cooney notes that Hatch has supported strong intellectual-property laws for quite a long time.EDITED BY LARRY LIGHT, WITH OLUWABUNMI SHABI By Catherine YangReturn to top
THE FLEET IS STILL IN AT FORD
WHY HAS THE RESTYLED FORD Taurus been slow off the starting line? Ford executives have insisted that consumers aren't turned off by Taurus' radical new look or stiff sticker price. They've blamed Taurus' startling 28% sales plunge in 1995's fourth quarter largely on Ford's intentional efforts to back away from low-margin fleet purchasers. But an independent analysis of Taurus sales suggests that the fleet excuse doesn't wash.
Fleet business--to rental agencies, corporations, government--accounted for 57.4% of the new Taurus' sales during its first three months on the market (October through December, 1995). That's up markedly from 51% in the comparable 1994 quarter, according to an owner-registration analysis for BUSINESS WEEK by Polk Co. Numerical sales were down for both fleet and retail, yet retail was off twice as much. And despite a $600 rebate since New Year's, sources close to Ford say fleet sales are still above 50%.
A spokesman at Ford doesn't dispute the Polk data, but now says Ford never meant to imply fleet sales were the main reason for the Taurus' woes. Ford, which has relied on these bulk purchases to keep Taurus America's top-selling car, has been trying to push fleet sales down to 40%--particularly by selling less to rental outfits--and lure the more profitable retail customer.EDITED BY LARRY LIGHT, WITH OLUWABUNMI SHABI By Keith NaughtonReturn to top