In Business This Week: Headliner
Michael Carpenter: Sandy Weill's Fair-Haired Boy?
Has Sanford "Sandy" Weill, Citigroup's tireless CEO, settled on a successor? Citigroup on July 25 split up Michael Carpenter and Victor Menezes, who had been co-heads of investments and corporate business. Menezes, 51, was farmed out to run emerging markets. Carpenter, 53, will remain head of Citi's investment and corporate businesses, where second-quarter profits grew 24% from a year earlier and accounted for 30% of Citi's earnings.
The 67-year-old Weill promised in February, when co-CEO John Reed retired, that he would draft a succession plan in two years. Weill watchers say Carpenter's solo reign may be a sign he's a candidate.
And why not? Carpenter is yet another Weill lieutenant, having been head of the life insurance and annuity unit of Travelers before its 1998 merger with Citibank. The British-born Carpenter may be best remembered for running the former Kidder Peabody during its 1994 bond-trading scandal. He left Kidder then and moved soon to Travelers. Seems to have been a good insurance plan.By Heather Timmons in New York; Edited by Anne NewmanReturn to top
Bezos' Job Just Got Bigger
Can Jeff Bezos do it all? On July 25, the Amazon.com CEO lost his president, Joseph Galli, who became chief executive of Horsham (Pa.)-based industrial trading site VerticalNet. The former Black & Decker exec said he wanted to be closer to his children in Baltimore, but insiders say his take-charge style clashed with Amazon's more collegial culture. Bezos will assume his duties, and analysts say the e-tailer's management remains strong. But losing Galli heightens doubts about Amazon's future: Its shares fell 7% in two days, to 36 1/16, off 70% from a peak of 113 last December. And second-quarter earnings reported July 26 didn't help. While Amazon's operating loss of $89 million was less than expected, sales of $578 million came in slightly below forecasts.Edited by Anne NewmanReturn to top
A Gathering of AOL Foes
America Online's foes piled on at the Federal Communications Commission's July 27 hearing on AOL's $183 billion merger with Time Warner. Earlier in the week, rivals including Microsoft, Yahoo!, and AT&T formed the IMUnified coalition to highlight AOL's dominance in instant messaging and to implement an open standard for the technology by year-end. AOL refuses to let the rivals' customers hook up with its system, claiming consumer privacy and security are at risk. An AOL spokeswoman says the company is cooperating with the open-standard effort. The coalition, she says, "is putting more emphasis on speed than on consumer safety." Meanwhile, instant-messaging company Tribal Voice will ask the FCC to require AOL Time Warner to hew to an open standard.Edited by Anne NewmanReturn to top
Happy Customers at Vanguard
Vanguard again proves its mutual funds are a cheapskate's paradise. The Valley Forge (Pa.) fund house will cut fees for its largest and most loyal shareholders in October. Retail shareholders who hold $50,000 in accounts for 10 years or more, or $150,000 held three or more years, will be eligible for the new "Admiral" class shares. Accounts of $250,000 or more will be eligible immediately. Fees will be 25% less in some cases. Vanguard Chief John Brennan says the program "reinforces intelligent investing principles"--or long-term investing. Cost-conscious investors should salute the admiral.Edited by Anne NewmanReturn to top