Posted on: Sunday, June 29, 2003

Gray moguls remain czars at corporations

By David Pauly
Bloomberg News Service

Let's hear it for septuagenarian CEOs.

Saudi Prince Alwaleed bin Talal, the biggest shareholder in Citigroup Inc., said in mid-April that Sanford Weill, 70, deserves to remain boss of the financial services company for "another 10 years."

Alwaleed — who owns 5.17 percent of Citigroup shares, a stake worth more than $10 billion — said Weill belongs in the same class as Maurice "Hank" Greenberg, who at 78 still runs American International Group Inc., the world's largest insurer.

Weill and Greenberg need no encouragement from Alwaleed, who's only 46. The CEOs show no sign of retiring — or of even naming a successor.

Citigroup's growth-by-one-acquisition-atop-another strategy is suspect to many, but Alwaleed likes the 18 percent gain reported by Weill for the first quarter. AIG had a rare loss in the fourth quarter of 2002 but was back on track this year after raising its prices.

Weill and Greenberg aren't the only old-timers who remain in charge. Warren Buffett, 72, apparently will run his Berkshire Hathaway Inc. conglomerate until he drops. Martin Whitman, 78, manages the $2.2 billion Third Avenue Value Fund — and got good marks during the recent stock decline. J. Willard Marriott Jr., 71, heads the hotel chain that bears his name. Two years ago, Corning Inc. brought back retired CEO James Houghton, now 67, in an attempt to rescue the stumbling fiber-optic-cable maker.

And in late April, President George Bush said that Alan Greenspan, 77, deserves another four-year term, starting next year, as chairman of the most important economic enterprise of all: the Federal Reserve. Greenspan said he is willing.

Old guys seem particularly prevalent in the entertainment business. At 80, Sumner Redstone is still king of Viacom Inc., which owns CBS and MTV. Rupert Murdoch, 72, remains in control of News Corp. Ralph Roberts, 83, is active as a director at Comcast Corp., the biggest U.S. cable TV company, now run by his son Brian.

Redstone, Murdoch and the elder Roberts are still around for the obvious reason that each controls the votes of his corporation. Redstone has a successor in president Mel Karmazin, 20 years his junior.

Karmazin ran CBS Corp. before it merged with Viacom in 2000, and many investors would like him to take over now. That no doubt has increased tension between Redstone and Karmazin, both of whom knew they'd have trouble getting along from the outset. Under the merger accord, they agreed not to bad-mouth each other.

Buffett is in charge, too: He controls 35 percent of Berkshire's votes. The company's board meetings are a veritable gathering of geezers. Six of the nine are 70 or older, including vice chairman Charles Munger, 79, and the two latest additions, ex-Coca-Cola president Donald Keough, 76, and 77-year-old Thomas Murphy, once head of Capital Cities/ABC Inc.

None of Buffett's adoring shareholders want him to leave, however. And he at least has a succession plan. He says he always has in mind two people to take his place: one to run Berkshire's many businesses and the other to oversee investments. That's either very practical — considering the company's growth and performance — or egotistical.

Alwaleed certainly had a point. Seventy-five doesn't mean senile, and mandatory retirement at 65 can seem silly in an era of medical wonders. (Full disclosure: The writer is 67.)

So stick around, guys. Just don't start thinking you're indispensable.