createpositivechange

Tag: Marc Andreesen

  • Torre Should Have Looked Over the Fence

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  • ‘Free’ tutoring is big business for Sylvan

    The No Child Left Behind act is a bonanza for private tutoring firms, including Sylvan Learning.

    Under the act’s provisions, students enrolled in schools judged to be failing are entitled to free tutoring, paid for by taxpayers. The costs total $2.5 billion annually, according to U.S. News and World Report.

    Tutoring companies contract with individual states and school districts. Sylvan provides such tutoring at about half of its 1,200 U.S. locations, according to Tabatha Sweeney-Gehrt, Sylvan’s director of new business development. At some centers, she says, business has doubled because of the service.

    Earlier this year at a Sylvan location in West Hartford, Conn., the number of tutored students more than tripled, according to Kathleen Keenan, the center’s director at the time. She estimates 250 kids came to the center specifically for the free tutoring. Keenan is now director of education at a Sylvan center in East Hartford.

    In 1993, two Baltimore businessmen, Christopher Hoehn-Saric and Douglas Becker, gained ownership of Sylvan and first took the company public.

    A decade later, Sylvan sold its tutoring business to New York-based, private equity firm Apollo Advisors, founded by Leon Black. At that point, Sylvan became part of Educate, Inc., an Apollo-owned company that went public in 2004. Educate’s holdings include the Hooked on Phonics grammar/language training system.

    In a $535 million deal completed in June, Hoehn-Saric and Becker, working with Citigroup Capital Partners, took Educate private under a new entity, Edge Acquisition, LLC.

    Hoehn-Saric is still CEO of Educate (and senior managing director at Sterling Capital), while Becker is CEO of Laureate Education Inc.

  • Bear’s Cayne holds cards close to vest

    In a classic fiddling-while-Rome-burns story, the Wall Street Journal traced the activities of James Cayne, the CEO of Bear Stearns Cos. this summer.

    While units of Bear Stearns, an investment and banking powerhouse, were collapsing because of the crisis in the subprime mortgage market, Cayne was out of the office on several occasions, according to a story in the Journal on Thursday.

    Not surprisingly — he’s a CEO after all — Cayne was incommunicado at times on the golf course, the Journal said.

    But at other times he was, hold on to your hats, playing bridge.

    (He might also have been puffing on a joint, the Journal implies, but that’s a whole other issue.)

    Cayne shot back at the Journal, saying in a memo to employees that the article “alleges I engaged in inappropriate behavior and includes a number of other inaccuracies and personal slurs.”

    Regardless, he is an avid bridge player, though his devotion to the demanding card game may sound a bit old-fashioned.

    But other moguls are drawn to bridge, as well.

    Bill Gates, the richest man in America, according to Forbes magazine, loves bridge, as does Warren Buffett, the second richest man.

    But Cayne, who didn’t make the list of America’s 400 richest people this year but was 384th in 2005, is at a much higher level in the card-playing world than Gates or Buffett.

    He’s ranked 611th the world and has been a top bridge player in the U.S. for years.

    For sure, bridge opened doors for Cayne at Bear Stearns.

    Alan “Ace” Greenberg, the head of Bear Stearns when Cayne was rising through the ranks at the company, also played bridge, as the Journal noted.

    The club at 15 East 67th St. in New York City was described this year by New York Times bridge columnist Phillip Alder as having “the highest standard of play in any club in the world, certainly more than a century ago.”

    While skill at bridge would appear to be advancement plus at Bear Stearns it may not trump concern about work habits.

    Warren Spector, who until this summer was co-president of Bear Stearns, is also a competitive bridge player, ranking 10th in the U.S.

    Both he and Cayne were at the same bridge tournament in Nashville this summer when all hell was breaking loose at Bear Stearns.

    Cayne went back to New York before Spector and he later asked for, and received, Spector’s resignation.

    “Mr. Cayne was annoyed that Mr. Spector was away from the office during the fund crisis,” the Journal reported.

    Since the crisis, Bear Stearns has laid off 800 people, though 15,000 remain, the paper reported.

    Cayne, who is 73, remains on the job, presumably analyzing his hand and deciding which card to play next.

  • Linda Stein, celebrity real estate agent, found murdered

    Linda Stein, punk rock band manager and real estate agent to the stars, was found dead Tuesday night in her apartment on Manhattan’s Upper East Side.

    Police said she had been bludgeoned to death.

    Stein, 62, co-managed the Ramones, a band that recorded on Sire Records, a label founded by her ex-husband, Seymour Stein. She later represented Billy Joel, Sylvester Stallone, Debra Winger, Perry Ellis and other celebrities.

    A powerful personality, Stein was the inspiration for Sylvia Miles, the aggressive real estate agent in the movie Wall Street.

    Close friend Elton John issued a statement saying: “I’m absolutely shocked and upset. She’s been a friend for over 37 years and she was a huge supporter of the Elton John AIDS foundation.”

    Police, who had not announced an arrest by Thursday morning, said there were no signs of forced entry.

  • Patriots’ Kraft wants English club

    English football teams are the latest craze for U.S. sports tycoons.

    New England Patriots owner Robert Kraft, in the United Kingdom for the NFL game in London last weekend between the New York Giants and the Miami Dolphins, says he is interested in buying a Premier League soccer – oops, football – team. He already owns Major League Soccer’s New England Revolution.

    “We looked seriously at Liverpool,” he told Sky Sports News on Thursday, unwilling to disclose which team he wants to buy. “We still do have an interest in playing in the Premier League. We’d like to close our deal and then talk about it.”

    American tycoons are planting red-white-and-blue flags throughout England: earlier this year, yanks George Gillett and Tom Hicks purchased Liverpool F.C. (apparently beating out Kraft). Gillett owns the Montreal Canadiens while Hicks owns the Dallas Stars and the Texas Rangers.

    Cleveland Browns owner Randy Lerner bought the Aston Villa club in 2006. Meanwhile, Tampa Bay Buccaneers owner Malcolm Glazer gained controlling interest in Manchester United in 2005.

  • Soft landings for Merrill’s O’Neal and other ex-chiefs

    The cushioned exit of Stan O’Neal as CEO of Merrill Lynch & Co. this week was proof again that nothing succeeds at the top levels of business like not succeeding.

    O’Neal is to receive a reported $161.5 million in stock options and retirement benefits. He was ushered out because he had lost favor with his board after announcing that the company had a $2.24 billion quarterly loss.

    While $161.5 million seems like enough to get by on, it doesn’t equal amounts received by other dismissed executives.

    In January of this year, Robert Nardelli, CEO of Home Depot, was given a $210 million severance package. That figure, according to the New York Times, “quickly made him the standard-bearer for failure-based pay.”

    Nardelli, like O’Neal, was said to have a harsh management style, a style that might have been tolerated if Home Depot’s stock hadn’t been in the doldrums.

    However, it may be a style that’s in demand. Nardelli became chairman and CEO of Chrysler in August.

    In 2006, Hank McKinnell, CEO and chairman of Pfizer Inc., exited his job ahead of schedule. He received close to $200 million in severance.

    McKinnell was certainly not alone. Citing a report by James F. Reda and Associates, the New York Times reported that 35 dismissed CEOs took away a total of $799 million in 2006.

    Among that year’s golden parachuters was Jay S. Sidhu, chairman and chief executive of Sovereign Bancorp Inc. He received a package worth $73.56 million when he resigned in 2006.

    The terms of these severance packages simply reflect the realities of the market place, analysts say.

    CEOs are in demand. Therefore, they can negotiate the plush terms of their firings at the times of their hirings.

    But, not surprisingly, the resignation packages do prompt criticism from the public, from shareholders and from politicians.

    That happened after Walt Disney Co. dismissed its president, Michael Ovitz, in 1996.

    Ovitz, who had been on the job for 14 months, was given $140 million in severance pay. Shareholders filed suit, but a judge ruled in 2005 that Disney had not violated its fiduciary duty.

    A severance package given to Carly Fiorina, CEO and Chairman of the Board, Hewlett-Packard Co. drew a shareholder suit that is yet to be settled.

    Her company dismissed Fiorina in February 2005. She received $21.4 million.

    Shareholders have pointed out that should the company’s stock improve, Fiorina also stands to make millions more by exercising stock options.

    Fiorina’s severance had other perks, including $50,000 in financial counseling. She also got to keep her personal computer equipment and receive free tech support for three years.

    Jill Barad, chief executive of Mattel Inc., received $37 million when she resigned in 2000 after the company reported a loss.

    As a part of her package, the company forgave a $3 million home loan and sold her a company car at “a nominal price.”

    Like some of the other executives who lost their jobs in the most public of fashions, Barad and Fiorina have landed on their feet.

    A website lists Barad’s speaking fee at $50,001 and above. Fiorina has signed on with the soon-to-air Fox News business news channel.

  • Google, Facebook battle for friends

    Despite losing to Microsoft in its bid for a piece of Facebook, Google isn’t giving up on social networks.

    The behemoth of search is partnering with other tech companies and social networks to develop a competing approach called OpenSocial. The open-source technology will enable developers to write applications that can be used on many sites, including partners in the project, such as LinkedIn and Friendster.

    This is a markedly different approach from that of Facebook, which does not share its technology with others.

    With 50 million users, a $240 million investment by Microsoft and a valuation of $15 billion, Facebook has a big head start. But the open-source approach has been proved over and over on the web. And then, of course, there’s the seemingly unlimited force of Google.

    A number of major players have been in both camps. PayPal co-founder Peter Thiel invested in both Facebook and LinkedIn. Napster co-founder Sean Parker was both the founding president of Facebook and a co-founder of Plaxo, which is a partner in OpenSocial.

    Thiel and Parker are not the only web kingpins in this fray. Netscape co-founder Marc Andreessen is involved in two OpenSocial partners – LinkedIn and Ning.

    With such a stellar cast, it’s going to be quite the show: Facebook and Microsoft and the millions of uncounted developers and publishers who will embrace open source.

    We’re in for a real spectacle.

  • Kay Bailey Hutchison Protects Oil Interests

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  • Princeton, donors’ family battle over $880 million

    In 1961, A&P supermarket heir Marie Robertson and her husband, Charles, gave $35 million in stock to Princeton University for its Woodrow Wilson School of Public and International Affairs.

    Today, the gift is worth more than $880 million.

    But the university and the descendants of the couple have spent millions in legal costs in a years-long fight over how the money should be used.

    A New Jersey judge’s decision last week that the dispute should go to trial has drawn nervous attention from college administrations across the country. The New York Times has called it “one of the largest lawsuits ever filed exploring how closely colleges must adhere to the original intent of donors.”

    The Robertsons’ children – Anne R. Meier, Katherine Ernst and William Robertson – maintain that the donation was meant to help prepare graduate students for careers in federal government, particularly in foreign and international affairs. They filed suit against the university in 2002, claiming that Princeton had failed to adhere to their parents’ instructions and had spent the money for other uses.

    The suit also charges that Princeton took control of the foundation set up to administer the gift, and commingled its funds with the university endowment.

    Princeton officials respond that the Robertson offspring are trying to overturn the structure set up by the original grant, and use the money for their own purposes.

    Both the university and the Robertsons have launched web sites about the suit. And both sides say they expect to win at trial.

    Regardless of the outcome, colleges are likely to pay much closer attention to the restrictions that often come with major gifts.

  • America’s ruling families

    We’ve come to expect political dynasties. They’re a fact of life in the U.S., perhaps even more than royal succession is in the modern UK.

    The 2008 presidential campaign is the first since 1952 without a sitting president or vice president. An entire generation has grown up thinking the race for the White House requires the presence of a Bush or a Clinton.

    Even beyond the obvious – the Bushes, Kennedys, Rockefellers, Roosevelts and Adamses – many American clans have passed the political baton from one generation to the next.

    In recent decades, Hendrik Hertzberg writes in the New Yorker, the “dynastic dynamic” has accelerated.

    The presidential field includes not only Hillary Rodham Clinton, wife of a former president, but Mitt Romney, son of a former governor of Michigan. Hertzberg notes that there are currently five U.S. senators whose fathers preceded them in the Senate. A prominent example in the House is Speaker Nancy Pelosi, whose father was a member of Congress and the mayor of Baltimore.

    Such connections yield intriguing Muckety maps. One of our favorites was created by the marriage of Howard Baker and Nancy Kassebaum, which linked not only their separate Senate careers, but the legacy of Kassebaum’s father, former Kansas Gov. Alf Landon, and Baker’s former father-in-law, Sen. Everett Dirksen.

    Political dynasties tend to overlap with the business and media spheres. (Think Maria Shriver.) After Louisiana Congressman Hale Boggs died in an airplane crash, he was succeeded by his wife, Lindy. One daughter, Barbara Boggs Sigmund, was mayor of Princeton, N.J., before dying of cancer. Another, Cokie Roberts, is a correspondent for ABC and NPR, and the wife of journalist Steven Roberts. A son, Thomas Hale Boggs Jr., is a powerful Washington lobbyist.

    Offspring of the powerful can learn from their parents’ example and their parents’ mistakes. Or can they choose not to learn at all. Hertzberg’s column closes with an observation on George W. Bush:

    “Bush’s failure to learn much of anything for the past six years suggests a deficit of character, not of experience; his unwillingness to employ his father’s skills and advice on behalf of the nation shows a disrespectful disregard for a dynast’s biggest advantage. He has given both freshness and family a bad name.”