Magazine

The Freshmen


The king is dead: Long live the king. Whether it's medieval monarchs or modern-day moguls, people hope for the best under a new leader. Many of these 14 new corporate bosses have taken command of badly ailing businesses. With the economy picking up, fixing them should be easier in 2004. But one big foul-up, and any one of them could face a quick (though probably well-paid) exile.

With Wall Street coming back and Citigroup churning out impressive profits, will Charles O. Prince justify Chairman Sandy Weill's faith in him? Weill gave up the CEO spot for Prince in July. The onetime Citi chief operating officer went on to clean up the tainted Smith Barney unit. Another Wall Street newcomer, NASDAQ Stock Market CEO Robert Greifeld, could use some help from the market. The former SunGard Data Systems (SDS) Inc. executive slashed costs, but NASDAQ still lost $84 million in the first nine months of 2003.

Two newcomers got the call at big telecom businesses. In the U.S., Gary D. Forsee of BellSouth (BLS) Corp. took over Sprint (FON) Corp. after William T. Esrey's messy departure over his use of tax shelters. Overseas, CEO Thierry Breton has executed a remarkable comeback for France T?l?com (FTE). He cut bloat, sparked revenue growth, and slashed $22 billion of debt.

No doubt William T. Schleyer and Ronald Cooper hope for a similar outcome at bankrupt Adelphia (ADELQ) Communications. The former AT&T cable execs, now Adelphia's CEO and president, respectively, have much of their $41 million in pay tied to stock options, and they want the company out of Chapter 11 next year. But the problems keep coming: In early December, Hollywood studios sued Adelphia, alleging that the cable operator had shortchanged them on movie fees.

A more robust economy should help David A. Bell, new CEO of the Interpublic (IPG) Group, who once ran True North Communications. Bell has already put the ad agency on a sounder financial footing. Media honcho Gunter Thielen, the insider running a post-Thomas Middelhoff Bertelsmann, also seems off to a strong start with a deal to merge BMG Entertainment with Sony (SNE) Music.

The bosses at two Texas-based companies face a tough road ahead. Michael Jordan, who saved Westinghouse by acquiring CBS, is now working to rescue computer services giant Electronic Data Systems (EDS) Corp. Jordan has cleaned up the balance sheet, but sales and profits remain stagnant. Gerard J. Arpey, CEO of American Airlines Inc. parent AMR (AMR) Corp., took over this spring after Donald J. Carty left in an embarrassing executive pay flap. Now he needs a winning strategy to fight the onslaught of the low-cost carriers.

Millard S. "Mickey" Drexler, meanwhile, has breathed some life into lackluster J. Crew Group Inc. Although third-quarter sales fell 20%, the former Gap (GPS) boss has raised the status of the preppie brand and generated something long absent from J. Crew: buzz.

But the word at two big health-care companies is not good. At Tenet Healthcare (THC) Corp., alum Trevor Fetter -- who replaced the ousted Jeffrey C. Barbakow -- faces multiple probes of the hospital chain's Medicare billing and physician-recruitment practices. Fred Hassan, former CEO at Pharmacia, took over troubled Schering-Plough (PFE) Corp. this spring. He could end up selling it.

A better prognosis awaits Robert P. May, the HealthSouth (HLSH) Corp. director named interim CEO after Richard M. Scrushy, accused of cooking the books, left. The good news? The company's main business remains profitable.

Would that all his fresh-man peers had it so good.


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