Family
Business Magazine E-Newsletter
February
5, 2008
Contents
1.
Comcast investor calls for CEO's ouster.
2.
Sulzberger clan member leaves Herald
Tribune.
3.
Longaberger regroups after management shake-ups.
4.
Tips for fathers who mentor their daughters.
5.
Planning your legacy.
1. Comcast investor calls for CEO's
ouster. In a scathing Jan. 14 letter to Comcast Corp., one
of the company's largest institutional shareholders, Chieftain Capital,
called for the company "to get rid of CEO Brian Roberts, return more
cash to shareholders in buybacks or dividends, and scrap the cable
giant's dual-class voting structure, which gives effective control to
the Roberts family despite its ownership of just 1% of Comcast stock," Barron's reported. The letter from
Chieftain, which owns about 2% of Comcast on behalf of clients, called
the Roberts family's stewardship of Comcast a "Comcastrophe," the
article said. Chieftain's managing director, Glenn Greenberg, is the
son of baseball star Hank Greenberg and department store heiress Caral
Gimbel, the Wall Street Journal
noted; as a young man he had planned to join Gimbel's but was told by
his uncle to look elsewhere after he wrote a business school
dissertation criticizing the company, the Journal article said. According to Barron's, Chieftain's letter called
the Roberts family's control of the company through super-voting stock
"inconsistent with 21st-century corporate governance" and said Brian
Roberts "has batted .000 for the last ten years on returns to
shareholders, and yet remains in the starting line-up." The letter has
"sparked a furious debate on Wall Street," where Roberts "retains a
strong level of support from shareholders," the Journal reported. Comcast sources
say Greenberg's criticism "has created a distraction at the most
turbulent time in the Philadelphia-based company's history, as it fends
off fierce competition from phone companies and the effects of a weak
economy," the Journal article
said. Barron's reported that
"The view on Wall Street is that the Roberts family is loath to
surrender control of the company by scrapping the dual-class stock. But
the public embarrassment of the Chieftain letter and Comcast's poor
performance in the stock market might prompt the family to become more
shareholder-friendly." (Sources: Barron's Online, Jan. 17, 2008; Wall Street Journal, Jan. 22, 2008.)
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2. Sulzberger clan member leaves Herald Tribune.
Michael Golden, a member of the Ochs-Sulzberger family, is leaving his
position as publisher of the International
Herald Tribune to focus on his position as vice chairman of the
New York Times Co., the Herald
Tribune reported. Golden had been with the Herald Tribune for four years. The
Times took full control of the Herald
Tribune in 2002; for 35 years prior to that, it had owned the
paper jointly with the Washington Post Company. "The restructuring
comes as the International Herald
Tribune has embarked on a new partnership with Reuters to
produce the paper's financial section," the Herald Tribune reported. "And the
company is also facing increasing competition from the Wall Street Journal under the new
ownership of Rupert Murdoch." Golden told the paper that he would
pursue more media alliances in his New York Times Co. position. "He
added that his responsibilities as vice chairman of the New York Times
Co. would also now include real estate, acquisitions and divestitures,
and online strategies," the report said. (Source: International Herald Tribune, Jan.
18, 2008.)
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3. Longaberger regroups after
management shake-ups. The Longaberger Co. has been in a
state of transition since the 1999 death of founder Dave Longaberger,
but 2007 was a particularly difficult year, Business First of Columbus (Ohio)
reported. Last year the Newark, Ohio-based company had three
presidents. Former Avon Products executive Jim Klein, who had been
hired in 2006, left in July; his successor, company veteran Jim
Gimeson, resigned Dec. 4. After Gimeson's departure, Tami Longaberger,
the founder's daughter, assumed the role of CEO and president; there
are no plans to name a replacement president, the article reported. The
company also underwent fluctuations in its workforce; it laid off 710
basket makers in March, rehired 471 in June, then cut 113 workers in
July and another 30 in December. "Longaberger said the home office went
through a shake-up to place greater emphasis on sales," the report
noted. The company added 7,300 sales consultants, a 60% increase, began
accepting Visa and MasterCard for the first time in its history, and
launched personal selling websites for the sales force. In 2008,
Longaberger plans to cut the number of products it sells by as much as
40%, the article said. (Source: Business
First of Columbus, Jan. 4, 2008.)
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4. Tips for fathers who mentor their
daughters. Male family business leaders who are grooming
their daughters as potential successors must avoid the temptation to be
overprotective, writes Anne E. Francis in The Family Business Mentoring Handbook. Fostering
dependence, Francis writes, "cripples the daughters emotionally and
interferes with their learning how to take risks and develop the
independence they need to grow up." She adds that a father "must be
willing to confront honestly any ambivalence he still harbors about
confident, self-sufficient, powerful women. It is imperative that he
not view his daughter's growing strength of character as a threat."
For more advice
on mentoring daughters and sons in business families, see The Family Business Mentoring Handbook.
Learn more about the book and see the table of contents here.
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5. Planning your legacy.
The combination of estate planning and business ownership planning
protects a family's enterprise and assets from loss if the leader's
absence causes a disruption in the business, writes Matthew I. Hafter
in the Winter 2008 issue of Family
Business Magazine. "The plan," he writes, "is a catalyst for the
CEO to assess, on an ongoing and disciplined basis, the critical
questions affecting the future of the business and the family." These
questions are:
- Are
management and succession plans in place?
- Will key
relationships with employees and business partners survive?
- Do
corporate governance procedures foster confidence and stability?
- Are there
dispute resolution procedures?
- Are the
professional advisers up to the task?
"Even if the
family business leader continues to lead a long, productive life,"
Hafter writes, "the plan will increase the company's value by aligning
interests, reducing conflict and improving governance."
For more news
and advice on issues facing your family company, see the Winter 2008
issue of Family Business
Magazine. Visit our website for subscription information.
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