) Services, a San Diego temp agency for nurses, has found a novel way to skirt a New York Stock Exchange rule change. On Nov. 4, the NYSE made it tougher to be considered an independent director: Any board member paid by the company during the previous three years is ineligible, up from one year.
In connection with its initial public offering on Nov. 16, 2001, AMN paid the private equity firm run by directors Robert Haas and Douglas Wheat $2 million. That made them ineligible and would have left just three independent directors on a seven-person board, violating the NYSE's rule requiring a majority independent board.
So on Nov. 3, Haas and Wheat stepped down, only to be reappointed on Nov. 17, when they complied with the new three-year rule. The Corporate Library's Nell Minow calls it an "attempt to circumvent the substance of the rules." Haas and Wheat did not return calls. Says AMN CEO Steven Francis: "We're following the rules."
The NYSE agrees, noting AMN's prompt disclosure. It won't say if others have used a similar loophole. Ultimately it will be up to shareholders to decide if Haas and Wheat are truly independent. Microsoft (MSFT
) critics blanched on Nov. 8, when one of the biggest thorns in Bill Gates's side settled litigation with the software giant. After all, the Computer & Communications Industry Assn. (CCIA), backed by such rivals as Oracle (ORCL
), Sun Microsystems (SUNW
), and Intuit (INTU
), led many of the antitrust fights against Microsoft, both at home and in Europe.
But what's striking about the settlement is that the group's CEO, Edward Black, may personally benefit, according to two sources with knowledge of the deal. Neither the CCIA nor Microsoft disclosed details of the deal. But BusinessWeek has learned that Microsoft paid the CCIA about $12 million. Black could receive nearly $2 million of that, paid out over the next few years under a new employment contract.
When Black broached the idea of settling with his board, he purportedly suggested earmarking a piece of the deal for his pay, something the board didn't oppose, according to one of the sources. A CCIA board member says much of what has been accomplished (with Microsoft) "has been due to Ed's tireless work."
Black declined to comment on whether he will get any money personally, or on the amount the CCIA received. "I'm not talking about it," he says. In the latest sign of consolidation in the red-hot for-profit education market, Remington College, in Little Rock, has put itself up for sale, BusinessWeek has learned. "We are considering a transaction," President Jerald Barnett Jr. confirms.
The college, which offers training in such fields as health and technology, has attracted more than 30 offers, says investment banker Michael Marino of Jefferies & Co. A deal could come within weeks, at a price likely to fetch between $240 million and $300 million.
It's the second such deal this month. On Nov. 4, private equity firm JLL Partners acquired the Marco Group, which operates a variety of schools, for $52 million.
More deals are sure to follow. Only 25% of U.S. adults have an associate's degree or higher, says equity analyst Jennifer Childe of Bear Stearns (BSC
). The nation's 5,000 for-profit colleges and tech schools, which offer everything from certificates in car repair to law degrees, are a popular alternative.
The industry boasts strong cash flow because students pay upfront and stay for months or years. The schools may not have the prestige of four-year universities, but Wall Street is giving them plenty of respect these days. Los Angeles may be the City of Angels, but it has been hell for the Anaheim Angels as it ponders changing its name to the Los Angeles Angels. Anaheim city officials are threatening legal action. Owner Arturo Moreno, who bought the team last year for $184 million, doesn't want to move. He just wants to tap the larger L.A. market. Anaheim officials, who kicked in $30 million to renovate the stadium, are miffed that Moreno cut the city's name from jerseys, tickets, and TV broadcasts. And L.A. city officials fear that another L.A. team might prompt the NFL to put a new football team 30 miles south, in Anaheim. Isn't L.A. big enough for all of them? Holiday cheer may be a bit subdued for retailers this winter. Standard & Poor's (MHP
) polled managers at 22 retail companies, and 46% say they have lower expectations now about the holidays than they did six months ago. Based on the survey, S&P forecasts year-over-year holiday sales growth at 3.5% to 4.5%.
That's not bad, but slower than the 5% jump in 2003 -- the best since 1999. Mitigating factors: lingering economic concerns, geopolitical strife, and energy costs. Better news: 55% of respondents expect improvements in 2005. In 1999, Alex Zoghlin, a former U.S. Navy encryption specialist and Web pioneer, helped launch an online venture for Boston Consulting and some airlines. You've probably heard of it by now: Orbitz (ORBZ
), the travel-booking site that Cendant (CD
) bought for $1.25 billion on Nov 12.
Zoghlin is at it again. After resigning as Orbitz' chief technology officer last year, he opened Chicago-based G2 SwitchWorks, which promises to make it easier and cheaper for travel agencies to buy airline tickets online. Zoghlin is betting that they'll want an alternative to Galileo International (also owned by Cendant), Sabre (TSG
), and Worldspan Technologies, which control the airline-reservation system.
These days, Zoghlin, a 34-year-old ex-triathlete, is busy changing diapers for his three small children. But he still has time to go fishing with Orbitz pals and run G2. "I'm a startup guy," he says. G2 is his fourth e-venture; the first three left him a rich man. Try telling him the Internet was just a bubble. Time was when Caribbean islands jockeyed to provide port to cruise ships brimming with free-spending tourists. That isn't always the case anymore. After spending millions to upgrade their ports to handle the modern megaships, some Caribbean locales are placing restrictions on cruise lines such as Carnival (CCL
) and Celebrity Cruises. Several islands have concluded that the hordes of passengers who disembark burden their infrastructures without spending enough to make it worth their while.
After being deluged with as many as 13,000 cruise passengers each day -- a swarm equal to 5% of its population -- Belize has begun limiting the number of disembarking passengers to 8,000 a day. Similarly, Bermuda and the Cayman Islands have started to restrict the number of ships that can dock each week. Other governments, including St. Lucia, Jamaica, and Antigua have started imposing cruise taxes -- roughly $5 to $10 per passenger. Playa del Carmen went so far as to scuttle plans for a new cruise-ship dock after Carnival balked at paying a proposed $30-per-head passenger fee.
The cruise industry insists such rejections are the exception. Says Michele Paige, president of the Florida-Caribbean Cruise Assn.: "We have the best relationship with the Caribbean that we've ever had." Still, any restrictions represent a setback for an industry that has long been used to being treated like the belle of the ball. For his second act, America Online (TWX
) co-founder Stephen Case chose a field far removed from cyberspace. BusinessWeek has learned he will announce on Nov. 22 that he has become chairman of Denver-based Exclusive Resorts, a luxury vacation home club.
The former online entrepreneur now wants to change the world of luxury travel by offering access to some 300 high-end vacation homes worldwide. Club members pay a one-time $375,000 fee and annual dues of up to $25,000. By helping members avoid the expense of home ownership, Case, 46, says he wants to make such luxury abodes "more affordable to more people."
Case, who owns more than 50% of the year-old company, has scouted sites for homes in balmy locales ranging from Kapalua Bay in his native Hawaii to Papagayo, Costa Rica, where he plans to build treetop homes. Not a bad way to retire from the online business.