Or in the end, might it be a simple case of workplace burnout, not so different from the guy in accounting who, eighteen months into sorting through Sarbanes-Oxley, looks ten years older and ready to be taken away in a straightjacket. The difference, however, is that corporate CEOs are substantial stockholders with large ownership stakes in their companies. They don’t easily change jobs or adjourn to a mental health facility as quietly as an employee in accounting.
Last but not least – could it be the anxious feeling in the pit of the stomach each time you see another CEO on the news, jacket draped across cuffed hands, taking the perp walk?
Just maybe, for Jeffrey Elkins, that was the final straw.
First Responders
No other East Coast office building looked quite like The Easton Company’s headquarters. Built in the 1960s, it was an architectural oddity that people either loved or hated. The architect would later become world-renowned, but in the ’60s he was still designing gas stations, so it was easy to debate whether the Easton building was an architectural gem of any significance. The front of the building facing the road was a two story series of white stucco boxes bedecked with irregularly placed balconies, a scattering of pyramid skylights, and a small grove of trees growing on the rooftop terraces. The back of the building rose three stories from ground level. Glass walls faced a man-made lake surrounded by mature trees and a landscaped walking path.
The adjoining lakefront property included several restaurants, a sailing dock, bell tower, fountain, sculpture gardens and stage area. The locale was known for its schedule of outdoor community events. Throughout the year the lakefront was a regional venue for concerts, fundraisers, fairs, competitions, boat races, movies and holiday celebrations. Today, however, the event taking shape around the headquarters building was a solemn one.
As Kate Cooper pulled into the parking lot she saw small groups of people clustered under the trees. Some were crying. Others were embracing. Most looked upset or shocked. It was a beautiful late-summer sunny morning but the faces of the employees gathered outside were clouded by grief.
Breakfast Champagne
Bob Dutton was enjoying the morning sun on top of his bald and buffed head. It was such an unusually perfect day for August in the Washington metro area – blue sky, haze-free sunshine and low humidity – that he decided to forgo the AC and put the top down for his short drive to the office. God, life is good, he thought, as he turned the key and listened to the powerful V8 purr of his Alpina Roadster. Bob’s house was close enough that he could walk to Easton headquarters. On some pleasant weekends when he needed to stop by the office, he trekked the two and a half miles door-to-door. But not on workdays. Part of the joy of being a senior executive was arriving in style. Give the grunts something to shoot for. Make ’em drool a little. Although Bob’s military days were in his distant past, he still mentally sorted workers by rank.
Pulling out of his driveway, waving to a neighbor, Bob smiled thinking about his fine appearance. His Pelham blue Polo shirt showed off his deep tan from a full summer of golf, and also complimented the metallic silver-blue BMW. He sported Armani shades, Gucci loafers with no socks and Brooks Brothers chinos. The sun glanced off his Rolex Submariner Classic – the same model Connery wore in the Bond films.
Although not particularly tall, Bob Dutton was still in military shape from his daily weight training and running regimen. He was barrel-chested, buff, and beaming. Nothing like those pathetic looking jowly middle-aged morons driving around in their sports cars, trying to compensate for bad looks, bad breath and bad hair. Bob knew he looked good – powerful and sexy. He considered himself in the prime of his life. Three drinks into a recent night of male carousing to celebrate his fiftieth birthday, he told an old Army buddy, “Depending on their sexual orientation, people either want me, or want to be me.”
Halfway to work Bob hit the brakes and made a U-turn in the middle of the lightly trafficked side street. He had just heard the announcement on the radio about the sale of the company. Gunning the engine, he let out a cowboy whoop that made the morning dog walkers on the sidewalk turn and stare.
As senior vice president of acquisitions, Dutton was the king of real estate property buy and sell in the best of Monopoly traditions. He sensed something was up at work and was experienced enough to guess what it was; but he was wise enough to keep his mouth shut. Things around the office had been a little too quiet in recent months. There were too many projects on hold. Three days ago the CEO’s office quietly asked him for some sensitive statistics. He provided them without asking a single question, knowing that by not asking anything, Bob was sending the CEO a message that he understood what was developing. Then Bob went home and prayed that his assumption was correct, recognizing that if the company were acquired, he would soon be a very, very wealthy man – far beyond his wildest dreams.
And now it was like Christmas had come in August! He could barely contain himself.
The U-turn was for a quick detour to All Saints Liquors, the only area liquor store open this early in the morning. Hopping out of the car, Bob pushed through the glass doors like he was fronting an invasion. The swiftness of Bob’s entrance caused the clerk to spring to his feet. The young man had been slumped on the counter in a near doze at this hour. It was too late for drunks and too early for soccer moms.
“I need three bottles of Dom, cold!” Bob barked to the clerk. While the clerk scurried off to check the cold cases, Bob perused the locked cigar display on the counter. “And gimme a dozen of these Hemingways.” Tossing his company Am Ex Gold Card on the counter, he added, “Oh, yeah, and I need some cups – gimme some cups.” The clerk looked puzzled but decided it would be best not to mention that the store didn’t sell cups. Instead, he went in the back and pulled out a package of plastic glasses used for wine tastings, then returned to the register. Better to charge this guy five bucks for a sleeve of cups and get rid of him. Then he could return to his nap. As Bob signed the credit receipt and spun through the door with his goods, the clerk watched him climb into the expensive car.
“Jeeze, what an asshole,” the clerk muttered as he returned his head to a resting position on the counter.
Jan McCarthy…
Jan McCarthy had been Norm Daniels’ administrative assistant for twenty-six years – nearly half her lifetime. She was Norm’s ghostwriter, editor and spell-checker long before personal computers. She picked up his dry cleaning, bought and sent flowers and cards to family members for every birthday, graduation, and christening. For two weeks each summer she was his house sitter while he went on vacation. She took in his mail, fed the pets (including the pet snake who ate the frozen mice), and on occasion paid his bills. She attended his children’s weddings and even picked up a child from college in Pennsylvania one holiday weekend when Norm and his wife were traveling overseas. In her wallet she carried better photos of Norm’s kids than her own. There were times when she was certain she knew his family better than he did. During those years Jan raised her own two children into young adults, but these days she found herself closer to Norm’s kids than to her own. She even babysat for Norm’s grandchild on the rare occasion when neighborhood sitters were unavailable.
As Jan’s career at Easton progressed, she and her husband Steve drifted apart. Jan’s life at work always seemed more interesting than her home life. By the time their kids were in high school, Steve had found someone more interested in him than Jan seemed to be; but Jan was oblivious.
In a two-year period, Steve left her lots of hints: suddenly scheduled late night meetings that required him to stay in the city overnight; suspicious charges on their personal credit card for purchases at Victoria’s Secret; distinctively feminine perfume smells on his suits. Jan never noticed. She was too busy loving her job. In frustration and anger, Steve began blatantly writing checks from their personal account to cover the in-town condo he had rented for the now frequent overnights with his new lover. Still Jan was unaware.
Finall
y, Steve left one last clue for Jan. After one of his “traveling on business” weeks – he had actually been staying in the city condo – he was unpacking his suitcase on the bed at home. He pulled out his hairbrush and there it was. The evidence he was certain Jan couldn’t miss. Attached to the brush were quite a few long blonde hairs. Jan, Steve and the kids all had very dark hair. Without pausing, Steve walked into the bathroom and placed the hairbrush – blonde hairs trailing – right next to Jan’s toothbrush where she was sure to see it.
The next morning, Jan had just finished brushing her teeth when she noticed the hairbrush. Usually Steve kept it in the vanity drawer. As she picked it up to put it away for him, she noticed the light colored threads that were stuck in the brush. She walked to the window for a closer look. Definitely blonde hairs. Definitely. As she stared at the brush, all the other pieces of the puzzle she had been blocking out fell into place: the checks, the charges, the unusual travel patterns. Most of all how happy Steve had been for the past year. Feeling lightheaded, she sat down on the toilet seat and put her head in her hands.
“Oh God,” she mumbled. “What a fool…” she began saying out loud to herself.
“You called?” whispered a voice from the bathroom doorway. She looked up and there was Steve casually leaning against the wall, looking like the happiest guy in the world.
Once the divorce was final, Jan found even more time to spend at work participating in company-sponsored events. She was the queen of corporate fundraising walks on Saturdays, soup kitchen volunteer hours on Sundays, and bake sales to benefit favorite charities. The kids now spent some weekends with their dad, which lightened her burden at home even more. Jan worked overtime as Norm moved up in the company. Her title was now executive assistant, taking on all the responsibilities that were not Norm’s strengths. Details and errands, budgets and logistics, expense tracking and meeting prep just weren’t Norm’s thing – and never would be. So Jan learned to do them all well. Everyone who had been with the company very long knew that without Jan, Norm would be lost. Unquestionably, he knew more about planning and zoning than anyone else in the mid-Atlantic – that was his value to the organization. However, in a corporate setting, it was Jan who kept Norm functional.
On that bright blue morning, as the news about Easton slid into the drive time radio reports, Jan was already at her desk readying Norm’s office for his day. There had been a flurry of data gathering activity going on recently, the kind that usually occurred whenever the company was evaluating a potential acquisition. The trinity of top execs – CEO, COO and CFO – seemed so happy this past week, Jan was certain that an announcement about the latest land acquisition by Easton would be coming soon. It made her happy too. No doubt the company’s stock price would climb up a bit, which would be a good thing. Not that she owned much stock – several hundred shares in the 401(k) plan – but still, it meant that raises might be a little bigger this year.
Recently, Jan was beginning to think about retirement. She was just one year from being eligible for retiree medical coverage, the golden carrot the company dangled for long-service employees to keep them in place past mid-career. And her company pension would be waiting for her as well. As much as she loved what she did, she was starting to consider what to do with the rest of her life. Jan was certain Norm was planning to retire in a few years and she had no interest in working for anyone else.
As Jan collected Norm’s schedule for the day from the printer, one of the new young finance managers walked past on the way to his office.
“Can you believe it?” he said to Jan.
“What’s that?”
“They really did it. You haven’t heard?”
Jan stared at him blankly. “Apparently not. What are you talking about?”
“We’re being sold!”
“What? No, that can’t be right. You must have heard wrong. We must be buying…”
But the young man disrespectfully cut her off before she could finish. “I’m positively right,” he emphasized. “It was on WTOP. Pratt-Miles is buying us for $13 billion.” And with that he turned and walked on to spread the news to the next unsuspecting soul he encountered. Jan stood shell-shocked, mouth agape, as Norm’s schedule fluttered from her hand.
In the News – Cotton Candy Stock Market
Closing Market Summary – August 14
The Easton Company (NYSE-TEC), +22.02 to $55.12, signed a definitive merger agreement with Pratt-Miles (NYSE-PMI), -$2.97 to $28.04. Each share of Easton will be exchanged for $65.00 in cash. The transaction is expected to close in the fourth quarter.
The stock market had been climbing for weeks. Financial pundits continued to debate what was really driving the rise. In a post-9/11 culture, many simply labeled it a continued recovery and left it at that. Still, in the calendar year that The Easton Company was acquired, the number of mergers and acquisitions in the U.S. increased by forty-six percent. For better or for worse, all those mergers were pumping a certain amount of air and spun sugar into particular segments of the market.
Most of these marriages of industry were not being consummated out of love, admiration and mutual respect. In the case of hostile takeovers, they were no more than shotgun weddings. Many mergers were arranged unions brokered by powerful business families, driven by the big dowry of one corporation and the covetous urgency of another.
Productivity gains? Profit growth? Economic growth? Fact-based market optimism? None of these could claim credit for the upward market spiral. The primary influence was all those takeovers. The availability of large sums of cash inside many corporations coupled with low interest loans had spurred companies to go shopping. As mergers were announced within a sector, investors raced to buy stock in similar businesses, viewing those same sector companies as potentially “in play.” Such buying frenzy drove stock prices higher, based on nothing more than hopeful speculation. Competitive debt on company balance sheets became more acceptable to investors, and the next thing anyone knew – zoom – off to the stock market races.
Attentive investors know that when these situations occur the process just keeps repeating itself until some voice in the wilderness spouts a timely, “Hey, wait a minute. Where’s the higher productivity, new products, increased efficiency, etc. to back all this up?” Uh-oh. What follows is euphemistically referred to as a correction.
Clearly, the initiation of The Easton Company’s merger with Pratt-Miles was in the midst of one of these cotton candy, spun sugar market cycles.
The Ninety Million Dollar Man
All CEOs have their quirks. Some are definitely odder than others. Money guys usually aren’t “people” people. They can trend toward the ill-at-ease silent type. Jeffery Elkins fit that mold. He was good for about two minutes of small talk with strangers before he needed to move on to someone or something else. If Jeffrey had an agenda or a speech outline, a toast to deliver or a good friend at hand, he was fine – even close to normal. Otherwise, awkward.
He also had a reputation for being just a little paranoid. Health nut, germ freak, he avoided eating in public places other than the most exclusive restaurants. At catered company luncheons he moved his food around his plate but consumed nothing except the bottled water he personally opened. Within the highest levels of the company, a story became legend about Elkins’ suits. Fearful of the health effects from wearing chemically dry cleaned clothes, he returned his Savile Row suits to his London tailor each spring to have the linings replaced.
From the outside – from the distance of public exposure – Elkins looked and acted the part of the consummate CEO. He definitely met the height requirement, standing just over six feet two inches. Statistics on the predominance of tall CEOs in the U.S. are well documented. He also met the good looks requirement. An attractive appearance can equate to higher pay and promotion opportunity in the workplace, regardless of job performance. Not that Jeffery Elkins wasn’t equal to his peers – he fit right in – which may or may not have been a compliment in th
e post-ENRON era.
Jeffery liked to arrive at work soon after most employees were already at their desks. So when he parked his silver Mercedes sports coupe directly in front of the building and strode quickly through the lobby, he usually encountered only the attractive young receptionist before reaching his secluded office suite. If he had his way, there would be a private parking garage and a hidden entrance elevator directly into his office.
However, since a famous architect had designed the Easton headquarters building, the facility was already a protected landmark. It could not be altered, thanks to local preservationists. What a group, Jeffrey thought. They were hell-bent to preserve everything in the area from dirt to dilapidations, agricultural land to crumbling mansions. From a developer’s perspective these people were time-consuming crazies who just didn’t understand two important words: business opportunity.
Since Jeffrey Elkins couldn’t change the building, he had to walk through the front doors just like every other employee. It was a morning routine that, according to the young receptionist, made him “GOA” – grumpy on arrival. On the morning the Easton sale made the news, Jeffrey felt greatly relieved knowing that he would only be required to walk through those front doors a few more times. Today the hallways weren’t empty as he arrived. He sped to his office making an extra effort to avoid eye contact with anyone he passed. He didn’t want to see them and he did his best not to listen. Already, there were people milling around and talking urgently in the corridors.
In his office, Jeffrey placed calls to the vice president of human resources and the security director. He wanted the VP to send out a broadcast email to division heads telling them to be in his conference room in thirty minutes. Based on the scene he observed on his way in, Jeffrey had already determined that a face-to-face meeting with employees for some kind of formal announcement was now unnecessary and unwise. The news, which had headlined the morning drive time radio airways thirty-five minutes before he arrived at his desk, was now water under the bridge. Maybe he was a coward, but he had seen some of those faces outside when he parked his car, before he had time to look away. He definitely wasn’t going to address a mob of crying, angry, shocked employees and try to satisfactorily explain things. What was the point? They could read it in the papers.
Pink Slips and Parting Gifts Page 2
