Thursday, June 14, 2007

And speaking of hubris...

The prior post discussed the strange morphing of Ken Thompson into a regal CEO. News items in the last week, however, remind us that he is dwarfed in his arrogance by the likes of Steve Schwarzman and Barry Diller.

Yesterday's WSJ had a page one article on Schwarzman, CEO of investment firm Blackstone, in which he is quoted as saying that he is worth every penny of his $7 billion net worth. He also makes choice statements such as he wants to "inflict pain" on and "kill off" his rivals. "I want war" with rivals, he is quoted as saying, "not just skirmishes. I didn't get to be so successful by letting people hurt Blackstone or me". In this lengthy article there is not one touch of humility or gratitude. His highly publicized multi-million dollar 60th birthday party for 350 people at the New York armory is detailed once again but the new nugget of information there is that anyone who chose to make a toast honoring him was warned in advance that no "roasting" or poking fun at the honoree was allowed. Serenaded by hired hands Rod Stewart, Patti LaBelle, and Marvin Hamlisch and surrounded by banners detailing the interior of his huge Park Avenue apartment, everyone obeyed. What happened to money can't buy you love.

And then there's Barry Diller, former media mogul and now CEO of IAC, on 60 Minutes being asked if he deserves the $470 million of compensation that he received last year. "Absolutely" he said, explaining that he has created great wealth over the last 15 years for his shareholders. The fact is that for those lucky enough to be IAC investors for the long term and get in on the ground floor the returns have been phenomenal, as Diller implies. For anyone risking their money with him in the last five years, the results have been above average but not necessarily deserving of the highest paid CEO status. Diller's persona during the interview was one of confident entitlement and bullying brilliance. Really attractive.

What's the point here one could ask. Both of these men have been rewarding their investors, legally making money, and apparently unlike Thompson they understand finance. They may have big egos, but so what. The point is that they are establishing the image for corporate America, flaunting their wealth and power. When the tide turns, their images could overide those of Warren Buffett on the investment side and Bill Gates on the corporate side, of the many hedge fund managers and corporate leaders who prefer to maintain their privacy, stay grounded and keep their profiles low. Even big egos like Sandy Weill and Ted Turner choose to flaunt their significant philanthropy more than themselves.

When history is written are Schwarzman and Diller helping to create a story of the robber barons of this era. Don't they realize that many people outside of their sphere of influence see them at best as unattractive braggarts and at worst as a hated focus of their resentment. Guess, however, that they need to live large.

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