Anyway, the new guy runs a bony finger down the organization chart and silently ticks off the names of everyone senior enough to gun for his job and fires them, leaving only terrified eunuchs. But firing people costs money–there are contracts, you see, and stock options–so he has to be very careful to fire only those who pose an actual threat, by dint of their intelligence or courage or originality or some other personality defect.
So the old guy is out and knows it. He’s not bitter. Being fired proves his value. But he is more than a little broke. He has a house in the Riviera section of the Palisades (the best address in town, trust me), a vacation place in Telluride, two kids at the Crossroads School and a wife who has confused “having a job” with “writing a novel.” The financial ace up his tattered sleeve is a bushel of stock options that, even post-bubble, are “in the money.” So right after he gets his walking papers he calls his old friend, the chief financial officer in New York.
“Hey, buddy,” he probably puts it, “you and I go way back, we’re pals, our wives and kids know each other. I’ve got these options to cash in. I know you can’t legally tell me exactly what to do, but I’d appreciate it, since we’ve been friends so long, if you’d indicate whether I should exercise them now, or if the rumors I hear are true and there’s going to be a buyout of the studio, thus increasing their value tenfold and making me a very rich man (a rich retired man). Should I wait? What do you say, pal o’ mine?”
There’s a long pause on the line. And then the CFO says, “My friend, I shouldn’t tell you this, but just because you’re you, I’ll tell you unequivocally that it doesn’t matter.”
“So I should exercise the options today?”
“I’m telling you that it won’t matter one way or the other.”
So the guy exercises his options. And it did matter one way or the other. The following Monday a large media conglomerate announced a buyout of the parent corporation, increasing the share price by a factor of 10, then a few months later by 15. So why didn’t the CFO tell his friend to hold on? (a) It would be illegal and CFOs are notoriously honest. (b) He’s a mean, jealous guy and didn’t want his “best friend” to be too much richer than he. A little richer, OK. A lot richer–and we’re apparently talking in the tens of millions here–not OK.
The right answer, (b), explains a lot of otherwise baffling human behavior. It especially describes the recent, gleeful accounts of the various firings, indictments and, in the case of poor Jean-Marie Messier, the deposed CEO of Vivendi-Universal, public executions that pepper the business pages.
This, after all, is the fun part of any market downturn, when the rich and superrich end up broke or superbroke, or worse. Those of us who didn’t participate in the Great Flood of Money in the 1990s can be excused our joy during the comeuppance. After all, when the last tycoon has been bankrupted and the last crooked CFO is wearing stripes, all that will be left is a flat-lining market and a double-dip recession. So forgive us for having a little fun with Dennis Kozlowski.
The freshly indicted ex-CEO of Tyco isn’t just facing financial ruin, he’s looking at a few years in the big house. And when I say “big house,” I don’t mean the $5 million house on Nantucket (paid for by Tyco) or the $18 million Manhattan apartment (ditto). I mean federal prison, the pokey, up the river. The three-hots-and-a-cot provided by Uncle Sam will no doubt be a comedown from his previous lifestyle, which featured such bizarre luxuries as $6,000 shower curtains.
I’m actually smiling right now, thinking of Mr. Kozlowski shuffling along C Block to the arts-and-crafts shed, trying hard not to make eye contact with the big guy in the next cell who “just wants to be friends.” I’m not the only one, either. At a dinner party last week, the nicest, sweetest, most decent woman I know–mother of three, philanthropic leader–turned to me and hissed in glee, “I can’t wait to see Martha Stewart do the perp walk.”
The “perp walk,” for those not familiar with the jargon, is what they call it when the indicted person, in cuffs, is led to or from the courthouse escorted by the Feds and a zillion photographers. Why does this otherwise gentle lady want to see America’s favorite homemaker tucked into a staff car by a couple of cops? “I could never make those goddamn lime tuiles,” she said to me. “Let her fry.”
