"Basically we left them with their furniture and the silverware." --Sean Coffey, lawyer in the WorldCom suit, on winning millions from former CEO Bernie Ebbers and his wife
Not bad for three months on the job. On July 11, Morgan Stanley (MWD) announced that Co-President Stephen Crawford resigned, having just gotten the spot on Mar. 28. For his trouble, he will take home $32 million.
In theory, Crawford is walking away with what he would have earned had he held the post for two years. But in practice, Morgan Stanley is paying Crawford an obscene sum, even by Wall Street standards, for being co-president for a mere 15 weeks. That's $53,000 an hour, assuming he put in an average 40-hour week.
Of course, given the bank's recent tumult, Crawford probably had to work longer days. Still, even if he toiled 16 hours a day, seven days a week, during his short stint, he would have made $19,000 for each hourlong meeting he attended. Lead director Miles Marsh declined comment, as did Crawford. But a company spokesman says the deal was designed "to ensure management stability" during a search for a new CEO. Never mind that Crawford's promotion was a major cause of the turmoil.
Motorola (MOT) will soon unveil a challenger to the BlackBerry -- the ubiquitous mobile e-mail device made by Research in Motion (RIMM) -- based on Moto's sleek, hot-selling Razr phone. Dubbed the RazrBerry by gearheads, it's said to pack a keyboard and a Windows Mobile operating system onto a candy-bar-size phone just as slim as the Razr. "It's a compelling-looking device," says Charles Golvin, a Forrester Research (FORR) analyst. But he notes the cool factor won't matter much if the gizmo doesn't function as smoothly as a BlackBerry.
A Motorola spokesperson says the company won't comment on unreleased products, but techie blogs such as engadget.com and msmobiles.com have already posted leaked pics of prototypes. A version of the RazrBerry (that won't be its official name) ought to hit stores by year's end.
Consider all this under one retail roof: wellness books, a pharmacy, high-end skin- and hair-care products, and blood- pressure and diabetes monitoring devices. There are also health-care seminars, a day spa, Pilates, and yoga. Don't forget the Caribou Coffee Shop. "It's seems...different," quips Bernstein Research retail analyst Colin McGranahan.
Particularly for the retailer behind it, Best Buy (BBY), which has nearly saturated North America with 838 big box stores. It just opened the 18,800-square-foot concept store, called eq life, in its hometown of Richfield, Minn. Eq -- the name comes from the Latin for balance -- has multiple competitors, but eq President Mike Marolt says its one-stop shop will appeal: "There's a hole in the market for this." A second eq opens in St. Paul this fall.
Other tech-centric companies also see opportunity in an aging population with health concerns. Intel (INTC), according to one person familiar with the project, is developing a product that helps manage weight-loss info on PCs; it could be sold at eq and elsewhere. Motorola (MOT) is gearing up technology that stores data, such as glucose levels, on cell phones. And Samsung digital thermometers are already on eq shelves.
Art or advertising? Samsung says its nearly 50-foot cell-phone sculptures, adorning airports around the world, are both. They display video of passersby, the time, temperature, and ads. Paris' Charles de Gaulle was the first site, in 2002. A dozen more have gone up since, with plans for 26 in toto. On July 23, the U.S. will get its first giganta-phone inside the Dallas/Fort Worth Airport. Samsung pays airports a rental fee for the space, or provides technology for terminals such as LCD TVs. The campaign has seemed to boost Samsung's brand recognition: The Paris sculpture was recently voted one of the area's most memorable billboards.
It took Jim Press 35 years at Toyota Motor Sales USA to become its first American chief. And that's pretty quick, he says, considering the carmaker's policy of jiwa-jiwa ("slow and steady"). Press's bump to president in June comes as Toyota has seized 13% of the U.S. mar-ket. He sees more growth potential as hybrids take off. When 11,314 Prius hybrids sold in April, Press crowed: "That's more than the entire Mercury [car] line."
He shrugs off Detroit's "employee discounts" for all comers. General Motors' deal just pulled more buyers into the market, he says, lifting Toyota's June sales by 10%. Toyota resists incentives, he adds, because "they make customers loyal to the deal, not the product." While Toyota's overall rebates have crept up in 2005, on average they're only 28% of GM's. As GM and Ford falter, he doesn't fear political intervention: "The geopolitical walls are coming down." Toyota has seven plants and 37,000 employees in North America -- and now, an American boss.
The skirmishes have begun in the war over the U.S. Supreme Court. Even before President Bush picks a nominee to replace retiring justice Sandra Day O'Connor, lobbyists on both sides are fighting over who will lead the armies of special interests into battle.
Conservatives tried to scare Democrats away from picking former Senate Majority Leader George Mitchell of Maine to lead their high court team by noting Mitchell's role as chairman of Walt Disney (DIS), parent of ABC News. "It's a pretty serious potential conflict," says C. Boyden Gray, head of Committee for Justice, a conservative group involved in the Supreme Court battle. "How could you trust the fairness of ABC?"
Earlier in his career, Gray was White House counsel to President George H.W. Bush. He is now a lawyer at Wilmer Cutler Pickering Hale & Dorr and a regular commentator on News Corp.'s Fox News Channel (NWS), but he sees no similarity between his gig and Mitchell's. "I don't see what relevance I have to anything," he says. "I'm a private citizen with no fiduciary responsibility to shareholders. If I owned Fox, you might say something, but I'm an occasional talking head." ABC had no comment, and Mitchell could not be reached.
Going off to spend a slim-down summer has lost some of its stigma. The number of accredited U.S. weight-loss camps has nearly doubled in the past five years, says the American Camping Assn. And these days the camps emphasize a less militarized fitness regimen in favor of "wellness."
That's helping to boost enrollments. At Camp Shane in Ferndale, N.Y., owner Dave Ettenberg focuses on kids' emotions as well as their caloric intake. The camp has hosted kids for 37 years and has seen attendance nearly double in the past 15 years, to more than 800 this summer.
At the Bryn Mawr (Pa.) Julian Krinsky Canyon Ranch Young Adult Summer Program, teens choose from a healthy buffet and more than 100 exercise options.
Another reason for the boom: Today's parents are less patient when their progeny start packing on pounds. Still, Ettenberg says, "the kids were heavier 30 years ago."
The percentage jump in sales of men's skin-care products in 2004 -- more than twice the sales rise for women's skin-care products. Sales of men's anti-aging products were up 22%.: 13
Data: The NPD Group Inc.
On July 14, Bruce S. Gordon officially became the 15th president of the NAACP. Though he's a longtime member of the historic civil rights organization, Gordon is a corporate man by training, having spent more than 30 years in the telecommunications industry, including a stint as president of the $20 billion retail markets group at Verizon Communications (VZ).
Now that he faces a far different challenge than selling phone service, many wonder if he has the tools to fight black America's civil rights battle. In business he was known for his tenacity. Wherever he has been, the pangs of racial conflict and the fight for social justice are matters Gordon cares deeply about.
During a break in the NAACP's annual convention in Milwaukee, Gordon sat down with BusinessWeek Chicago Deputy Bureau Manager Roger O. Crockett in the presidential suite at the Hilton Hotel. He recounted a story from just a few weeks ago that helps explain his commitment: At a wine shop in New York City's tony Tribeca, where Gordon lives, he asked for a bottle of Dom Perignon, which he planned to give to a friend. The rep said it was in stock but he would have to go downstairs and retrieve it. "Cool. I can wait," Gordon told the clerk.
Then came the shocker: "Would you mind waiting outside?" the clerk asked him. "There is nobody else here." Gordon said "Hell no!" He didn't buy the bottle and says he'll never shop there again.
"I'm a calm guy, otherwise I would have smacked that boy," he says. "That's not a story that happened to some other guy. It happened to a successful corporate executive who can go anywhere he pleases. But he happens to be black." Here are edited excerpts of the interview. (Note: This is a longer, online-only version of the Q&A that appears in the July 25, 2005, issue of BusinessWeek.)
Q: There's an unprecedented number of black CEOs in Corporate America. What has allowed them to reach a point where blacks hold such corporate power?
A: Why did Bear Bryant integrate Alabama University football? He needed to win. It's that simple. Why did boards hire black CEOs? They wanted to win. They recognized that if they broadened the search to include all talented candidates, regardless of ethnicity, they were going to attract more talent than there otherwise would have been.
Q: That implies that these guys were the best.
A: They were better than the best -- because they had to be.
Q: Some have been critical of your appointment because you have no track record in fighting for civil rights. How do you respond to that?
A: From the minute I walked into the door [in Corporate America] I wore my ethnicity and my commitment to civil rights and social change on my sleeve.
Q: You just released a report card grading companies on how they serve people of color. Would you boycott or picket those who didn't give data for the report?
A: Malcolm X said, "By any means necessary." I believe in that. So I think we use whatever tactic is necessary to produce the desired outcome.... When companies don't respond [to the NAACP's request for data to grade them by], they're saying "I don't want to play. I'm not in the game."
I don't accept that. Target (TGT) got an F [because they didn't respond.] One of our great assets is the people in our 2,200 local branches. We maybe need to go to them and say, "stay out of Target." If Target submitted and got a D, I wouldn't be mad. Saks is not in the game. If Saks doesn't want to respond to the NAACP, then we damn sure shouldn't spend our money there. [Ed. Note: Target and Saks say they didn't respond because they believe the survey doesn't accurately reflect their diversity views and efforts.]
Q: How will you go about addressing the huge economic disparity in America?
A: There absolutely is a substantial disparity between the state of black life in this country vs. the general population. And it's going to be hard for me because there's so much that needs to be done. It's going to require a discipline to really establish a focus.
But for one thing, pension-fund management is a hot-button issue for me. Black folks have a problem getting access to capital. There's megabillions sitting in those corporate pension funds. Why shouldn't black asset-management companies get a bigger piece of that action? It's totally unacceptable to me. You just look at what black asset-management companies have under management compared to what major companies have. That's an embarrassing statistic.
Q: How do you plan to boost membership, especially among youth?
A: Marketing techniques. How does a company reach customers? It talks to its potential customers and asks "what do you like, and what do you not like." I don't know what technique I'll use, focus groups or something, but I'll find a way to talk to our existing young members as well as those that are not members and ask, "what does it take? What are the things that you care about?"
And then I'll determine if what I call "care-abouts" fit with what the NAACP stands for. I'd like to take advantage of all the NAACP Image Award winners who are in that [young adult] demographic. They could prove to be effective spokespeople for the NAACP.
Q: Do you think it's important to reach out to various parties and people of various political leanings?
A: I am for inclusion.
Q: How do you accomplish that?
A: Education is not a red state/blue state issue. Quality education is an issue for all of us. Safe, drug-free communities is an issue for all communities. I don't want to get tugged into is this a liberal issue or conservative issue, a Democrat or Republican issue. I want to go to where the trouble is.
And when it's time to identify the solution to the problem, I want to engage whoever needs to be engaged to work on that solution. There is no love affair with either side of the aisle at this organization. There is a need to bridge the gap in Black America by any means necessary. I want to enlist the support and help of anybody, any organization, any party, any philosophy that will help us get where we need to go.