Jerome B. York, chairman, president, and chief executive officer of Micro Warehouse and former longtime CFO of IBM Corp. and Chrysler Corp., is bucking the recent trend of senior executives backing politely away from outside board obligations. York, who already sits on the boards of Apple Computer Inc. and MGM Mirage, has decided to take on the mother of all board assignments — Tyco International Ltd. A glutton for punishment? Nope, asserts York, just a savvy businessman.
“I have a personal investment philosophy that when I see a big company stock getting hammered, I do some investigating,” says York, who will also sit on Tyco’s audit committee. “After Tyco got hammered, I went through its public filings, and I discovered that they had a lot of really good assets.”
He was particularly impressed with the information on the company’s ADT alarm division, an industry he knows a thing or two about. “I ran Wells Fargo Alarm in the 1970s,” he explains, “so I am familiar with that business. The upside on Tyco is a major multiple of the downside.” He put his money where his mouth is and bought 35,000 shares.
Shortly afterward, he got an unrelated call from a search firm wondering if he’d like to sit on Tyco’s board. York met with new CEO Edward D. Breen Jr., and based on his own investigation and the meeting with Breen, he said yes. Potential lawsuits resulting from the misdeeds of the company’s former executives don’t concern him. “Because I’m new, I can’t be charged with anything that happened before,” he says. York is also confident that by performing his audit-committee functions diligently, he can help head off any issues for which he and the new members of the board might be held liable.
Despite the additional time commitments (20 to 30 hours a month in addition to the 100 hours a year he already spends on his board commitments), he thinks CFOs should accept board seats if they can afford the time. “It’s true there will be more time commitments,” says York, “but it’s also rewarding to fix up a situation. It’s great experience.”
CFOs on the Move
Raytheon Co. CFO Frank Caine resigns after censure by the SEC for alleged violations of Regulation Fair Disclosure…. Nick Caruso, former CFO of Shell Oil Co., joins Dynegy Inc. as CFO…. Sunbeam Corp. appoints Ralph Passino to the CFO spot, succeeding Bobby Jenkins…. Mark Buthman is named CFO of Kimberly-Clark Corp…. Electronic-brokerage Instinet Group Inc. names John Fay as CFO…. Frederick Schiff, former CFO of Bristol-Myers Squibb Co., is now CFO of Vital Signs Inc…. FleetBoston Financial Corp. appoints Robert Lamb Jr. as CFO.