July 12, 2020

DealBook Column: Hold Your Applause, Please, Until After the Toasts

From left: Robert H. Benmosche of A.I.G., Marissa Mayer of Yahoo and Jamie Dimon of JPMorgan Chase.From left: Reuters; Chip Somodevilla/Getty Images; The New York TimesRobert H. Benmosche of A.I.G., left, Marissa Mayer of Yahoo and Jamie Dimon of JPMorgan Chase.

Gentlemen, ladies, please take your seats.

It is time for DealBook’s annual “Closing Dinner,” where we toast — and more important, roast — the deal makers of 2012 (and some of the still-hammering-out-the-fiscal-cliff-deal makers).

This year’s dinner is in Washington so that some of esteemed attendees can run back for negotiations.

We have a number of Wall Street deal makers at the front table: Jamie Dimon, Lloyd C. Blankfein and Warren E. Buffett. They may have an easier time negotiating than some of our elected officials because, as Mr. Buffett likes to say, “My idea of a group decision is to look in the mirror.”

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Across the way is Steven A. Cohen of SAC Capital. We sat him next to Preet Bharara, the United States attorney for the Southern District of New York, so they could get to know each other a little better. Steve, a little advice: don’t let Preet borrow your cellphone.

Greg Smith, the former Goldman Sachs banker who wrote a tell-all called “Why I Left Goldman Sachs,” is here. Mr. Smith managed to wangle a reported $1.5 million payday from his publisher, but his book sold poorly and his publisher was left with a huge loss. Nice to see you learned something from your years in banking, Greg.

Timothy F. Geithner and Ben S. Bernanke are sitting at the dais this year, as is Mario Draghi. Strangely, they are playing Monopoly under the table with real dollar bills. (I heard Mr. Bernanke tell Mr. Draghi, “We can always print more.”)

The board of Hewlett-Packard is at the table at the back. Senator Harry Reid and Senator Mitch McConnell, whatever you do, don’t ask Meg Whitman for pointers on how to make the numbers work.

Mario Draghi, the European Central Bank president, helped save the euro.Olivier Hoslet/European Pressphoto AgencyMario Draghi, the European Central Bank president, helped save the euro.

We’re pleased that Speaker John Boehner also decided to join us this year. We had asked him to invite some other senior members of his caucus, but as you can see from the empty seats at his table, none of them were willing to join him. So we’ve stuck him next to Vikram Pandit.

Mitt Romney just arrived and is sitting at the table sponsored by the Private Equity Growth Capital Council. He is with some of his supporters, among them Leon Cooperman of Omega Advisors and the Koch Brothers. And yes, Mitt, there is a hidden video camera in the floral arrangement in front of you.

Finally, a quick thank you to the folks from Barclays and UBS. Their teams who got caught up in the Libor scandal agreed to pay for tonight’s dinner. Apparently, there is some dispute with the caterer, however, because the bankers are trying to set the rate. (Rimshot.)

And now, before the humor runs out (if it hasn’t already), onto the official toasts and roasts of 2012:

Meg Whitman, the chief of Hewlett-Packard, has overseen a bad financial year at the company.Peter DaSilva for The New York TimesMeg Whitman, the chief of Hewlett-Packard, has overseen a bad financial year at the company.

TURNAROUND OF THE YEAR Robert H. Benmosche, A.I.G.’s chief executive, take a bow. The bailout of your company at the height of the financial crisis will probably never be popular, but it will be profitable. (And it should be a bit more popular, too.)

The Treasury Department sold its last shares in the company in 2012, racking up a profit of $22.7 billion for taxpayers. Mr. Benmosche, a tough-talking executive who at one point early in his tenure at A.I.G. threatened to quit because of efforts by the government to meddle in the business, revived a company that had been left for dead. Most of the media, the pundits and the speculators got it wrong. You got it right. We do all owe you a thank you.

LEADERSHIP LESSON: JAMIE DIMON Mr. Dimon, the biggest failure of your career happened in 2012 with the loss of more than $5 billion by a group of your traders, including one known as the “London Whale.” Many C.E.O.’s would have lost their jobs and certainly would not be given a toast.

But you did something most executives would not have done: you admitted to the mistake. In an age when it’s almost de rigueur on Wall Street to hide problems, obfuscate and shade the truth, you told it how it was: “We have egg on our face, and we deserve any criticism we get.”

That’s not to say the situation was handled perfectly; the lack of details about the loss and your continued pushback against regulations raised more questions than answers. But your insistence that “We made a terrible, egregious mistake” is a lesson in leadership for your peers.

CREDIT WHERE CREDIT IS DUE: MARIO DRAGHI Mr. Draghi, the economist and former Goldman Sachs banker turned president of the European Central Bank, nearly single-handedly saved the euro zone in 2012. In a master stroke, he said: “Within our mandate, the E.C.B. is ready to do whatever it takes to preserve the euro.”

That sentence will go down in history for the confidence it inspired in the markets and in countries like Greece, Spain and Italy that were thought to be on the precipice. Through behind-the-scenes shuttle diplomacy with leaders like Angela Merkel of Germany and Mario Monti of Italy, Mr. Draghi was able to convince reluctant politicians that it was in his purview to start buying up bonds if a country needed help — and requested it. So far, his comments alone have served as a remarkable backstop; no country has sought his help.

A BOARD IN NEED OF HELP, AGAIN Bashing the board of Hewlett-Packard is becoming boring. Its members, who have routinely turned over, had another tough year.

The company’s stock fell about 45 percent. H.P. disclosed that its $11.7 billion acquisition of Autonomy, in which it paid an 80 percent premium, had turned out to be a mess (which wasn’t exactly a secret) — or worse, a fraud. But in a strange twist, perhaps trying to remove some of the blame for the disaster of a deal, the board attributed at least $5 billion of the write-down of the deal simply to accounting chicanery.

Some have questioned H.P.’s math. Perhaps some of the write-down is the result of accounting problems, but $5 billion? C’mon. Hewlett’s board, however, still has some friends: It has paid an estimated $81 million to Wall Street to help orchestrate some its failed deals in recent years.

SEEKING FACEBOOK ‘FRIENDS’ Mark Zuckerberg, Facebook’s C.E.O., has been attending our “Closing Dinner” for years. (He wore Adidas flip-flops to his first.) Back then, he was the “It” boy — the one everyone in the room wanted to “friend.” This year, after Facebook pursued its I.P.O., some investors want to “unfriend” him.

As everyone knows, the market has not been kind to Facebook shares, which were sold at $38 a share and at one point this year dropped by half. The good news is that Facebook’s shares have rebounded and are now at about $26 a share; the bad news is that long-term shareholders are still down about 30 percent.

With questions about Facebook’s privacy policies and mobile strategy still at the fore, Mr. Zuckerberg has some work to do. Hopefully, when we reconvene next year, more investors will want to sit at your table. (My apologies for sticking you next to Andrew Mason of Groupon.)

YAHOO FINALLY GETS IT RIGHT For nearly the last five years, if not decade, Yahoo had clearly lost its luster. It went through a series of C.E.O.’s, its best engineers left to work at Google and Facebook, and its stock had tanked.

Enter Daniel S. Loeb, the activist investor. He saw value where others didn’t. He also used some clever powers of persuasion to get on the company’s board: He ousted Scott Thompson, Yahoo’s new chief (remember him?) for lying on his résumé by saying he had a computer science degree when, in truth, he had an accounting degree. That sleuthing, and the ensuing embarrassment for the board, gave Mr. Loeb an opening to get his slate of directors on the board.

But most important, once he got on the board, he did something nobody expected: He hired Marissa Mayer, a true Silicon Valley star from Google, to run the company. The jury is still out on the company’s future, but for the first time in ages, people are talking about the company as if it actually has a future. Kudos.

Article source: http://dealbook.nytimes.com/2012/12/31/hold-your-applause-please-until-after-the-toasts/?partner=rss&emc=rss

Bits Blog: Yahoo’s Mayer Gets Hefty Pay Package

Paul Zimmerman/Getty Images

10:10 p.m. | Updated More details added.

SAN FRANCISCO — Yahoo lured Marissa Mayer from Google with a lavish pay package that could total $129 million over five years — if she is able to get the company growing.

Yahoo disclosed details of its new chief executive’s compensation package in a regulatory filing on Thursday. It is larger than the pay package of the average chief executive in Silicon Valley, but not the largest among chiefs of publicly held technology companies.

Timothy D. Cook, Apple’s chief executive, has a compensation package valued at $378 million in salary, bonus and stock award that vests over 10 years. His annual base salary is $900,000.

Ms. Mayer’s pay package is higher than that of Meg Whitman, her counterpart at Hewlett-Packard. When H.P. hired Ms. Whitman, 55, as its chief executive, it offered her a $1 salary and stock options valued at $16.1 million that she cannot exercise unless H.P.’s stock meets certain targets by October 2013. She will also get a $6 million annual bonus if all goes well.

Ms. Mayer’s former boss at Google, Larry Page, receives only $1 in annual salary. But as a co-founder of the company, he owns more than 26.2 million shares of Google stock, which, at Thursday’s closing price of $593.06 a share, is worth about $15.5 billion.

Ms. Mayer’s package includes a $1 million annual base salary and a bonus of up to $4 million a year, depending on company performance. She will receive $12 million in the form of a stock payment this year — half in restricted stock, the remainder in options — and comparable awards in subsequent years. Yahoo will also give her a one-time “retention equity award” worth $30 million that vests over five years.

Google never had to disclose Ms. Mayer’s salary because she was not one of the highest-compensated executives at the company, although she was one of the most visible. But to make up for what she left on the table at Google, Yahoo said it would pay her a one-time “make whole” stock grant of $14 million.

“It’s big,” said Colin Gillis, an analyst at BGC Partners. “But Yahoo is a multibillion-dollar company. If she can create value, it’s a small percentage. If she doesn’t, she’ll join a long succession of Yahoo C.E.O.’s with sizable pay packages who did not add value.”

Yahoo offered Ms. Mayer more than it had her immediate predecessors, Scott Thompson and Carol Bartz. It offered Mr. Thompson a $1 million base salary and stock grants worth about $22.5 million. He left four months into the job, without severance, amid accusations that he had exaggerated his credentials on his resume, but he managed to keep $7 million in cash and stock grants that had already vested.

When Ms. Bartz joined Yahoo in 2009, the company offered her a $1 million salary and stock and cash grants worth $19 million, plus options worth five million shares that exercised at $11.73.

Ms. Mayer, known for holding extravagant parties, collecting expensive art and wearing designer gowns, does not lack for money. As Google’s 20th employee, she made millions in Google stock while running its search business and overseeing successful products like Gmail and Google Maps.

Article source: http://bits.blogs.nytimes.com/2012/07/19/yahoos-mayer-gets-hefty-pay-package/?partner=rss&emc=rss

Workstation: For Women, Parity Is Still a Subtly Steep Climb

After all, women in the United States now collect nearly 60 percent of four-year degrees and they make up nearly half the American work force.

But despite headline-grabbing news like the recent naming of Meg Whitman as chief executive of Hewlett-Packard, a look at the numbers shows that progress at the very top has stalled. Last year, women held about 14 percent of senior executive positions at Fortune 500 companies, according to the nonprofit group Catalyst, which focuses on women in the workplace. That number has barely budged since 2005, after 10 years of slow but steady increases.

So what’s the holdup? Ilene H. Lang, president and chief executive of Catalyst, says one factor can be traced to an “entrenched sexism” that is no less harmful for being largely unconscious.

“I don’t want to blame this on men,” Ms. Lang said. Rather she cites “social norms that are so gendered and so stereotyped that even though we think we’ve gone past them, we really haven’t.”

She describes a corporate environment that offers much more latitude to men and where the bar is much higher for women. In her view, men tend to be promoted based on their promise, whereas women need to prove themselves multiple times.

She maintains that unintentional bias is built into performance review systems. Words like “aggressive” may be used to describe ideal candidates — a label that a man can wear much more comfortably than a woman.

Companies must make a commitment to women’s advancement by holding managers accountable for promoting women and actively measuring their progress, Ms. Lang says, adding that “there’s a big difference between awareness and action.”

Not that there hasn’t been some progress. A rich source of female talent exists just below top management, says Sylvia Ann Hewlett, founding president of the Center for Work-Life Policy, a research organization. But women have become stuck in this layer because they tend to lack a sponsor at the top to advocate for them, she says.

Sponsors are different from mentors, who lend friendly advice and allow workers to share their quandaries and challenges. Sponsors make a direct bet on the promotion of their protégés, putting their own careers on the line by doing so. That can be risky, so such relationships demand a high level of trust.  

”Women tend to be overmentored and undersponsored,” says Ms. Hewlett, who has done research to find out why. One reason is that women are more uncomfortable using their work friendships to land a deal or to join a team, she says. For men, those kinds of interactions tend to be second nature.

Another tripwire is more insidious because it is awkward to discuss. Most of the people in senior management are men, but many are very reluctant to take on women as protégées because of the sexual dynamics, Ms. Hewlett says. They fear that gossip will spread if they are seen regularly with a junior female colleague.

Companies must face this uncomfortable reality head-on, she says. They need to make sponsorship a transparent and integral part of the culture, so that when a male senior executive is seen with a lower-level manager, it will be assumed that he’s a sponsor.

“When women have a sponsor they really do move up,” Ms. Hewlett says, “but you can’t just be a wallflower and wait for someone to pick you.” Actively working to find a sponsor is good practice for a higher leadership position, she adds, because it is all about “leveraging the power relationships in your life.”

SELF-PROMOTION is another crucial skill for those intent on moving up, but women are more likely to consider such behavior unseemly, says Peggy Klaus, an executive coach and leadership expert in Berkeley, Calif. With men, “it’s expected that you’re going to showboat a little,” she says.

Women tend to put their heads down, do great work and praise others in their department while modestly omitting their own contributions, Ms. Klaus says. “Then they get really angry,” she says, “when they get passed over for the bonus and the promotion.”

As Ms. Hewlett put it, “Women have this extraordinary faith in the meritocracy,” and this can carry them through at lower levels. But they need more if they are going to push through to the very top.

Article source: http://feeds.nytimes.com/click.phdo?i=7fbe0f045cce0f3ee69398a70e034bba

Meg Whitman Is Named Hewlett-Packard Chief

The upheaval at H.P. came after several weeks of mounting concerns among board members, senior executives and investors about how the former chief, Léo Apotheker, had handled a major strategy shift at the company announced last month, according to interviews with several people briefed on the board’s discussions.

While the board still endorses the strategy change — which includes a possible spinoff of its personal computer business, the closing of a line of mobile devices and the $11.7 billion acquisition of the software maker Autonomy — its members felt that Mr. Apotheker had bungled communicating the plans to H.P. employees and outsiders.

“It’s not about the strategy, it’s about the guy,” said one of the people with knowledge of the board’s discussions, who was not authorized to speak publicly.

In an interview, Ms. Whitman, who became a member of the board this year, said the process that had led to Mr. Apotheker’s ouster took place over about three months, and came to a head in late August. Once she was aware that she would be a candidate to succeed him, she said, she recused herself from the selection of a successor.

Talking about why she chose to accept the role, she said, “This is a chance to help turn around an American icon,” adding that “we’ve got our hands full.”

In an earlier conference call with Wall Street analysts, Ray Lane, the company’s executive chairman, was asked whether hiring Ms. Whitman had been “hasty and premature.” He replied that the board had revisited the results of the search done before hiring Mr. Apotheker, but wanted “to reach inside” H.P. Despite her brief tenure solely as a board member, he said Ms. Whitman was viewed as an insider.

In one change from Mr. Apotheker’s plans, Ms. Whitman told investors in the conference call that H.P. would reach a decision about the fate of its PC business by the end of the year, rather than next year.

She said in the interview that H.P. would remain committed to the sale of computer hardware, drawing a distinction between herself and Mr. Apotheker. “He was a software executive who thought there was a faster-growing, higher-margin business in software,” she said, but “it will not transform the company.”

H.P. did not reveal any details about Mr. Apotheker’s exit package, though it is expected to in the coming days. After analyzing Mr. Apotheker’s contract, James F. Reda Associates, a compensation consulting firm, estimated he could get as much as $38 million in total compensation, including severance, salary and other items, from his 11 months working at H.P.

A hint of trouble for Mr. Apotheker surfaced two weeks ago, when Dominique Senequier, an H.P. director and chief executive of a private equity firm, notified the company that she planned to leave the board early next year, a fact disclosed in a company filing with securities regulators.

The decision by Ms. Senequier, who was known to be close to Mr. Apotheker, was prompted by a concern about Mr. Apotheker’s fate at the company, according to the person familiar with the board’s discussions.

Dissatisfaction with Mr. Apotheker had been building since he was named to lead the company less than a year ago, but the concerns boiled over beginning on Aug. 18, said Mr. Lane.

That was when H.P. hastily announced that it was exploring a sale or spinoff of its PC business into a separate company, after portions of the news became public earlier in the day, and disappointing quarterly earnings.

The changes caught many H.P. executives off-guard; Todd Bradley, the executive in charge of its PC business, received less than 24 hours’ notice, according to a person close to Mr. Bradley.

The uncertainty about the future of the PC business also created uneasiness among the company’s big corporate customers, causing concern among H.P.’s board that it could contribute to weakness in its PC sales.

Quentin Hardy and Eric Dash contributed reporting.

This article has been revised to reflect the following correction:

Correction: September 22, 2011

An earlier version of the capsule summary for this article misstated Ms. Whitman’s given name as Angela. As the article and picture caption correctly note, it is Meg.

Article source: http://feeds.nytimes.com/click.phdo?i=02d43fc8288923b272c93a515f4ad200