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"Bill, do you have your hand up?" --Apple CEO Steve Jobs polling a conference audience that included Microsoft Chairman Bill Gates about how many of them had iPods With annual sales of $27.4 billion, Best Buy (BBY
) is no mom-and-pop shop. But it is family-friendly to insiders. According to a proxy for the year ended in February, for instance, the publicly held electronics retailer paid $20 million for store fixtures to a company owned by an unnamed brother of Chairman and ex-CEO Richard M. Schulze. Chairman Schulze received $950,000 for leasing two stores to Best Buy. The board determined the transactions were made at arm's length. Also, a corporation owned by the Richard M. Schulze Revocable Trust was paid $380,000 for leasing planes to management. Schulze's daughter, Susan Hoff, earned $530,000 as chief communications officer. Son-in-law Duane Hoff made $160,000 as vice-president for business development, before resigning in December.
Best Buy's filing says the employee-relatives of Schulze and other insiders got paid comparably to nonfamily members in similar positions. A spokesperson says: "We just wanted to be as transparent as possible." Still, for companies of this size, "it's rare to see this many related-party transactions," says Beth Young, senior research associate with watchdog group the Corporate Library. For a company that calls its employees "partners," Starbucks (SBUX
) is plenty steamed over attempts by some to join a union. The National Labor Relations Board has set a June 15 hearing on claims that management engaged in illegal anti-union activity to keep employees at a New York Starbucks from joining the Industrial Workers of the World. The IWW local says in the NLRB complaint that management threatened to withhold pay, spied on workers, and offered baseball tickets and health club passes to keep some from joining up. Starbucks officials deny the allegations. Says spokeswoman Audrey Lincoff: "We are pro-partner, and we will not interfere in partners' right in any decision they choose to make."
Starbucks workers announced last year they had formed the company's first North American union, at the store at 36th Street and Madison Avenue in Manhattan. The union isn't certified with the NLRB, but employee and organizer Daniel Gross said it has already won concessions, such as higher starting wages in New York and recognition of repetitive stress injuries, and is gaining members. Starbucks officials deny those claims. An awkward description of the U.S. as "the long middle finger" of the world set off a blogosphere brouhaha for PepsiCo (PEP
) President and CFO Indra Nooyi. Speaking at Columbia University on May 15, Nooyi likened five major continents to her hand -- with the U.S. (not a continent) the middle one and Africa the often-ignored pinkie. As she put it: "Each of us...must be careful that when we extend our arm in a business or political sense, we take pains to assure we are giving a hand...not the finger. . . . Unfortunately, I think this is how the rest of the world looks at the U.S."
A burst of online outrage followed, forcing Pepsi to post an apology on its Web page. Nooyi issued a statement saying: "I love America unshakably" and "am extremely grateful" for its opportunities. Lost in the hubbub was her slight of Antarctica and Australia: They were assigned no finger at all. Add musicals to the products made in China. On May 17, Sir Cameron Mackintosh unveiled a venture with Shanghai Grand Theater to produce shows with Mandarin lyrics, using Chinese actors and crews. He'll start with Les Mis?rables in 2007; The Phantom of the Opera and Mamma Mia! will follow. Mackintosh called Shanghai a "gold mine" for the stage. He should know: His English Phantom, which closed in March, made $8 million there, and Cats was 90% sold out even during the 2003 SARS epidemic. Immigration to Israel has been drying up like the Dead Sea -- arrivals are down from 200,000 people in 1990 to 22,000 in 2004. What to do? Hire IBM (IBM
) to craft a marketing campaign. The nonprofit Jewish Agency for Israel says Big Blue gained expertise through an Israeli marketing agency it owns. Some of its pitches: For French "individualists": Israel is the "Jewish Ibiza of the Middle East." For descendants of Holocaust survivors: "We can provide a positive sense of security." Makes you wonder if IBM has any tips for Pope Benedict XVI. Harry Jansen Kraemer Jr. walked the walk. When Baxter International (BAX
) was posting higher numbers year after year in the early 2000s, CEO Kraemer took his share of the credit. And when the medical-products maker fell short, he took some blame, saying in January, 2004, that he would quit as soon as the board found a replacement. That came last June. Now it's back to work. On Apr. 27, Kraemer, 50, joined Madison Dearborn Partners in Chicago as executive partner, vetting health-care investments for the $7.7 billion private equity firm. Sweet revenge? Hardly. "There were never any hurt feelings in leaving," he insists.
At Baxter, Kraemer preached the value of balancing work and family. But as boss he rarely found a spare minute. Once he left he had time -- and money, thanks to a $4.2 million severance deal. Kraemer, his wife,Julie, and their five kids spent a month driving around Europe in a rented van. He isn't likely to have time to do that again anytime soon. Is America's oil industry jeopardizing its long-term future by cutting jobs amid record profits? Some experts worry that Big Oil won't have the people it needs to ramp up output to meet steadily rising energy demand. In an April report, CEO Arthur Smith of energy research firm John S. Herold says: "Unless oil and gas companies take drastic steps to reverse the brain drain of the energy industry, a severe personnel crunch is preordained." Geologists could become particularly scarce.
A brain drain is well under way. At just under 200,000 jobs, U.S. employment in oil and gas extraction and petroleum refining is half what it was in the early 1980s, according to the Bureau of Labor Statistics. There are several explanations: Improved efficiency allows companies to do more with fewer workers. Big Oil has increased the share of jobs located overseas, where most of the new oil finds are. Caution is also a factor. Companies hate to add staff because they fear that high prices won't last. Indeed, the spot price for crude, while still very high, has dropped from $58 a barrel in early April to around $51 now.
All told, oil and gas companies cut U.S. jobs by 0.6% and worldwide jobs by 5% in 2004, despite record profits, says Standard & Poor's Compustat unit. Doesn't sound as if they're geared for growth. Stella McCartney is one of the hottest names in fashion, known for sharp tailoring and a rock-chick pedigree (she's Beatle Paul's daughter). But only a few can afford her originals. In November, though, women in 22 countries -- including the U.S., at some of Hennes & Mauritz' 75 outlets -- will have a chance. That's when she launches a collection for the Swedish chain. H&M hopes to woo style-conscious but thrifty shoppers with clothing and accessories at $10 to $170 -- a steal, considering that a T-shirt from McCartney's signature line goes for $120 and up.
H&M is constantly trying to liven up its 1,200 stores. But the deal is more important for McCartney, 33. For four years her label hasn't turned a profit, and partner Gucci has given her until 2007 to break even.