"'Cease-fire' is not a relevant term at the moment" -- Secretary of State Colin Powell, commenting on his trip to the Middle East It's not easy to escape the taint of having served on Enron's board. Directors are not only taking heat for Enron's woes but also losing their seats on other companies' boards. Of 13 Enron board members, three have lost other posts after being targeted for removal following Enron's implosion. The casualty list includes Robert Jaedicke, who resigned from the California Water Service Group, and Ronnie Chan, who opted out of reelection to Motorola's board. Herbert Winokur Jr., soon to leave Harvard University's governing board, is the latest.
The next possible victim: Frank Savage, a former exec at Alliance Capital Management who is up for reelection to Lockheed Martin's board on Apr. 25. Proxy adviser Institutional Shareholder Services is asking investors to nix Savage, citing "enough issues surrounding Mr. Savage related to his role as a director at Enron to raise significant question as to his ability to be an effective director." The AFL-CIO, whose pension fund lost more than $1 billion investing in Enron, says Savage failed to protect Enron shareholders' interests. It is urging a "no" vote on Savage, too. His lawyer, W. Neil Eggleston, responds that Savage "has worked hard for the shareholders of Lockheed Martin" and continues to do so.
The AFL-CIO is continuing its campaign against others, asking the Securities & Exchange Commission to have a federal court declare Enron directors unfit to serve on boards. Like your Toyota Camry? So do car thieves. Many Camry parts are interchangeable between model years, making the Camry the most-stolen car for five years running. This year, though, a Chevy truck also made the list.
1. 1991 Toyota Camry
2. 1989 Toyota Camry
3. 1990 Toyota Camry
4. 2000 Honda Civic Si
5. 1994 Chevrolet C1500 4X2
1. 1989 Toyota Camry
2. 1990 Toyota Camry
3. 1991 Toyota Camry
4. 1988 Toyota Camry
5. 1994 Honda Accord EX
Data: CCC Information Services As the world's biggest maker of giant construction gear, Caterpillar (CAT) thinks big about almost everything--except its annual meeting.
Breaking with tradition, none of Caterpillar's 14 directors attended the company's Apr. 10 shareholder meeting except Chairman and CEO Glen Barton. Most of Cat's officers were also AWOL. Those who weren't skipped any discussion of last year's results or this year's outlook. In fact, Barton adjourned the whole shebang after just 10 minutes.
Later, in an informal Q&A with the few dozen stockholders who had come to Chicago for the meeting, Barton defended the board's absence. The directors (who get $60,000 a year plus 4,000 stock options) had been in town just hours earlier for a board meeting, but Barton said he thought it wasn't worth their while to stay. He said financials were available on the Web site, and implied he would cancel the meeting altogether if he could.
Shareholders were not pleased. "I feel insulted," one told Barton. And they should be outraged, adds stockholder activist Nell Minow. Especially post-Enron, she says, directors must be accessible and accountable. "It is arrogance of the highest order of magnitude for directors not to attend," she says. Looks like big Cat may have made a big mistake. Robert Lutz, General Motors' (GM) vice-chairman for product development, is known for his Midas touch in developing cool cars. In the early '90s, his instincts for products such as the Dodge Viper fueled a resurgence at Chrysler. Since joining GM last fall, Lutz has started spicing up its cars. But between those two gigs, he was CEO and fix-it man for ailing car-battery maker Exide Technologies. Lutz, 70, told BusinessWeek a year ago he hoped his legacy would be a turnaround at Exide.
He didn't pull it off. Exide, where Lutz remains nonexecutive chairman, filed for bankruptcy on Apr. 15. Even though Lutz imposed cost controls, streamlined manufacturing, and broadened market share when he took over in 1998, he was unable to reduce massive debts. In the eight months since he stepped down as CEO, debt ballooned from $1.4 billion to $2.5 billion. Exide lost $200 million last quarter; profits are nowhere in sight. Says Banc of America securities analyst Nathan Hudson: "The company was very screwed up before Lutz came in."
Don't worry, Bob, you'll still be remembered for your cars. Think all the good stuff in annual reports is buried in the footnotes? Now, thanks to free software called FootPrint, you can read the footnotes first and skip the boring stuff in between. FootPrint extracts footnotes and puts them in a separate file for easy reading. Then, if you click on one, it shows it in context, in big pink type. "This way, you can read the footnotes first, then look back at the document if something strikes you as fishy," says FootPrint co-author Hal Varian, a dean at the University of California at Berkeley.
Varian began FootPrint in jest but now takes footnotes seriously. He has added explanatory "toe notes" to some Enron footnotes and is measuring such factors as the number of footnotes to see if impenetrable financial reports signal trouble. FootPrint can be downloaded at www.sims.berkeley.edu/~hal/footprint. Dennis Hatch is the Columbo of computers. Oh sure, his real job title--manager of the lost-and-found at Seattle-Tacoma International Airport--is more pedantic. But with new security procedures requiring laptops to be removed from carry cases, so many have been left behind that his detective skills are required. At Sea-Tac, 330 laptops got left in the seven months after September 11, up from just seven in the same period a year earlier.
To track down owners, Hatch has a handful of tricks. If there's no I.D., he turns on the machine and pokes around for clues. Sometimes, it's as simple as capturing a log-on and domain name when the laptop boots. Sometimes, he clicks on Microsoft Word, hoping to catch the briefly flashing name of the person to whom the software is licensed. He even roots through address books, finding listings under Mom and Dad. "Usually, moms and dads already know the hysteria that their kids are going through," Hatch says.
Only once has an owner expressed displeasure over the intrusion, and even then it was muted. "He couldn't deny the fact that he wouldn't have had his laptop any other way," says Hatch.
Not every airport has an epidemic of left laptops. At San Jose, for example, the problem barely registers. And even at Sea-Tac, left laptops have been declining recently--by about half--as travelers get familiar with new security procedures, says Hatch. All of which means Hatch's detective days soon may come to an end. Tourism is starting to make a comeback from September 11. But the usual spring throngs aren't converging on Washington.
A big reason: Students touring the capital have dropped by half--from an estimated 2 million last year to 1 million this year. After the attacks, many school districts banned class trips. This year, the nonprofit Close Up Foundation, which mixes trips to the Capitol and the Smithsonian with seminars from policymakers and journalists, has seen such a fall-off that it laid off 30% of staff, or 40 employees. "It's been a really difficult loss," says Vice-President Chuck Tampio.
The Quality Hotel in Arlington, Va., popular with school groups, reports a 15% drop in revenues this year. And Arena Stage theater, which usually sells 11,500 to 15,000 tickets a season to students, has only sold 7,000. "For a while there, every time there was another terrorist threat or scare, we got another cancellation," says Arena sales director Cheri Swiss. Many schools have now lifted travel bans--but don't expect a recovery until next year. How much do baby boomers plan to spend annually on favorite activities?
Home Improvement: $7,000
Family Outings: $3,900
Amount to be spent, per retiree, by boomers who said the activity was one of their three favorites
Poll of 1,004 adults born between 1946 and 1961, released February, 2002
Data: Harris Interactive