Reality TV star or CEO? Line blurred in 2007
NEW YORK -- Could any reality TV show rival the swift falls and ignominious exits of top executives in 2007?
Call it "MBAs Gone Wild" or "Survivor: Wall Street," since the only thing missing were tribal councils of teammates talking about their deep disappointment. For instance:
• HBO's CEO was arrested for assaulting his girlfriend in a Las Vegas parking lot. He explained in a memo to employees, "Two years ago, I decided that I could handle drinking again. Clearly, I was wrong."
• BP's chief resigned after admitting he lied to a judge about how he met his boyfriend. (The truth: An escort service's Web site.)
• WellPoint Inc.'s 53-year-old chief financial officer was defenestrated after one of the many women who said she was engaged to him sued. Among his other attachments was a pair of sisters. If you're wondering what this lothario looks like, sorry: He looks like a 53-year-old CFO.
Here are some of 2007's winners and losers:
LOSER: John Browne. During Browne's 10 years as CEO of BP PLC, the company's market cap increased fivefold. But Browne also ran BP while a refinery blast killed 15 and a corroded BP pipe in Alaska led to the disastrous 2006 Prudhoe Bay oil spill.
But that's not what got him ousted; it was getting outed. Browne was done in by lying to a judge as he fought a British newspaper that was preparing to publish details of his life with his boyfriend.
WINNER: Al Gore. Al Gore won an Oscar, a Nobel Peace Prize and -- perhaps most lucrative -- a partnership working on alternative-energy companies at Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers.
While Gore has said he'll donate his salary to the Alliance for Climate Protection, he didn't mention what he'd do with the stock options he earns. Typically, a venture capitalist's big windfall comes from cashing in options when companies the firm invests in go public.
LOSER: Conrad Black. Black, a media mogul and British lord, was convicted in July of three counts of mail fraud and one count of obstruction of justice, in what federal prosecutors described as a multimillion-dollar fleecing of media company Hollinger International Inc. He was sentenced in December to six 1/2 years in prison.
Black's trial offered plenty of evidence that shareholders paid for his high life, with the company spotting for a $62,000 birthday party for his wife, a Park Avenue apartment and a trip to Bora Bora.
When shareholders grumbled about the cost of the Bora Bora trip, he wrote a memo saying, "I'm not prepared to re-enact the French revolutionary renunciation of the rights of the nobility."
WINNER: Sam Zell. Jeans-wearing, motorcycle-riding billionaire Zell takes to heart the deal-maker's most basic maxim: Buy low, sell high.
He sold his Equity Office Properties Trust to Blackstone Group LP for $24 billion, netting him an estimated $1 billion. Then he made a deal to buy battered Chicago-based Tribune Co. for $8.2 billion in April. His actual outlay will likely be a fraction of that, though, since Zell agreed to invest $315 million, while the bulk of the company's debt is taken on by Tribune's employee stock ownership plan.
LOSERS: Charles Prince, Stan O'Neal. Proving again that chief executives are the only ones with nothing at risk if their companies slump, the Merrill Lynch & Co. and Citigroup Inc. CEOs retired suddenly as declining mortgage holdings shrunk their banks' assets by billions of dollars -- but both men managed to leave rich.
O'Neal left Merrill Lynch & Co. with a $161.5-million package of stock and benefits despite a $2.24-billion quarterly loss on his way out, the largest ever at the bank.
Charles Prince parted Citigroup with $95 million. He retired, effective immediately, following Citi's announcement it would take $8 to $11 billion in asset writedowns, which came on top of $6.5 billion it had already taken.
Both men bagged the loot despite failing at one of a CEO's most important tasks: grooming successors. Both banks named interim heads while they scrambled to find new CEOs.
WINNER: Steve Jobs. Apple Inc. earned a record $3.5 billion for the fiscal year, as iPod sales grew steadily and techies slept outside Apple stores for a chance to buy an iPhone. The company's gadgets brought in new users for MacIntosh PCs, which, after years of stagnating at a 2 or 3 percent share of the PC market, grew to an 8 percent share by October -- making the company the nation's third-largest computer vendor.