At the Sept. 7 press conference at New York’s St. Regis Hotel announcing Viacom Inc.’s proposed merger with CBS Corporation, Viacom chief executive Sumner Redstone was as vital as ever. Tall, beaming, under a thatch of impish red hair, Mr. Redstone stood by his heir apparent, Mel Karmazin, and gloated, as the deal billboards in the background testified to all the power that will soon rest under the old entrepreneur’s famously gnarled right hand.
Mr. Redstone was born five years before William Paley paid $417,000 in 1928 for the radio stations that would become CBS.
But, as Mr. Karmazin pointed out, “This man has not lost his fastball.” Mr. Karmazin has been careful to make it clear to the world that he is taking a back seat to Mr. Redstone, with the understanding that as Mr. Redstone’s heir apparent, he will one day be the big man out front. But he has to be wondering, at least a little bit–will Sumner Redstone ever really let go?
Mr. Redstone is 76 years old, or thereabouts. (His age is as changeable as his hair color.) Analysts have bellyached for years about a lack of an heir at Viacom. Now he has satisfied them by snapping up one of Wall Street’s favorite salesmen, which is but one reason Wall Street seems to love this deal. In the past year, Mr. Redstone has resuscitated his company’s stock with a series of shrewd moves that prove that the old man still has it, and that the old man still wants it. It is hard to tell whether this latest, crowning move, Viacom’s $38 billion acquisition of CBS, is an exit strategy or an entrenchment ploy for Mr. Redstone. Running a company is like playing blackjack. Whether you’re winning or losing, you just want to keep playing cards.
Corporate lions tend not to retreat quietly. Men who spend their lives pursuing power and all of its trappings don’t just relinquish it overnight. It’s hard enough to get old folks to stop driving. How is a chief executive, especially one who controls his company’s voting power, as Mr. Redstone does, supposed to know when the time has come to step down?
In most of corporate America, a company’s board of directors is responsible for preventing the onset of King Lear syndrome. America’s most celebrated chief executive, General Electric’s Jack Welch, is approaching G.E.’s mandatory retirement age of 65. He’s a young man, damn it, but policy is policy, especially in a company as devoted to corporate philosophy as G.E. So now a pair of insiders are vying for his job, the company’s future hangs in the balance, and analysts and investors have an excuse to wring their hands.
Many would argue that in this day and age mandatory retirement at 65 is arbitrary and obsolete. Life expectancy has increased by 30 years over the last century. With 69 million baby boomers beginning to approach retirement age, there is an incentive–from both a Medicare and Social Security point of view–to keep as many of them in the work force as possible, much as they’d like to retire yesterday.
But what about Mr. Redstone’s 76 years? Yes, he is spry, Yes, he is vital. Yes, he still plays tennis, even with that hand. And yes, as fellow septuagenarian and Loews Corporation co-chairman Laurence Tisch put it, “His mind is perfect!” Hey, Albert Gordon ran Kidder Peabody, and was as smart as anybody there, until he was 85. (He is still reportedly going to the office at Paine Webber, at the tender age of 98.) But Ronald Reagan ended the Cold War in his 70’s and was afflicted with Alzheimer’s in his 80’s.
So how old is too old to be a chief executive?
“Some people are old at 50, and some are old at 100,” said Bear Stearns & Company’s chairman, and Viagra champion, Alan (Ace) Greenberg, 72. Mr. Greenberg relinquished the title of chief executive to James Cayne in 1993, but he said his function at the firm hasn’t changed. “Old does not depend on chronological age. I mean, I personally have the body of a girl of 16.”
“At the moment, I can outlast most of my colleagues,” said Robert Pritzker, the 73-year-old chief executive of Marmon Corporation. “We’ll be working 60 to 70 hours a week, more than two or three cities a day. I’m ready to keep going at 10 o’clock at night, and I have to drag the rest of them along. People have been telling me to slow down for years. But they told that to my father, and he died at 90.”
“I am told that I stay up later than most people and get up earlier,” said Ahmet Ertegun, the 76-year-old founder and co-chief executive of Atlantic Records. He said he has no plans to retire. “Not right now. I’m too busy. But maybe when I’m not that busy I’ll think about it.”
“Having taught at Harvard for eight years, at the business school, I’ve seen enough of the world’s brightest 25-year-olds to know that they still have some stuff to learn, so I remain at least modestly skeptical that they’re going to set the world on edge,” said Andrall Pearson, the 74-year-old chief executive of Tricon Global Restaurants Inc., who was president of Pepsico for 15 years. “The 24-year-old millionaires, we will have to see how they do. That’s a recent phenomenon and not one that has yet stood the test of time.”
“If we were gorillas, they would say the silverbacks are at the top of the heap because they have an expertise that the younger generation doesn’t have,” said former Mayor Ed Koch, who just completed an anti-retirement book entitled I’m Not Finished Yet: Remaining Relevant . “Do you think given the choice between some whippersnapper who’s terrific in physics and Albert Einstein, I would take the whippersnapper? I wouldn’t.”
“The only disadvantage to being an older C.E.O. is that your life expectancy is shorter,” said Mr. Tisch. “In business, nothing really changes over the years.”
But Walter Wriston, the octogenarian former chief executive of Citicorp, disagreed. “The danger of hanging around as a C.E.O. is that you tend to know the things that aren’t true anymore. My rule is that I don’t even go into the door of my old outfit except to work the cash machines.”
Graef Crystal, corporate watchdog and compensation expert, echoed his sentiment. “You get to this point where you just assume you have your whole act together now and you don’t have to keep editing the manuscript. The root cause is perhaps an unwillingness to throw out almost wholesale what worked in the past and to incorporate a whole new repertoire of behavior that is needed for today.”
(“I don’t use the computer,” said Mr. Ertegun. “But my secretary does. I want to take some computer courses because I’m interested in some of the access to some of the illegal things on the Internet. I’m just kidding. Do you do surfing or whatever they call it?”)
“The record is not very good,” Mr. Crystal continued. “Armand Hammer, chief executive of Occidental Petroleum, lasted until the day he died, when he was 90. He raped the shareholders, was grossly overpaid, and his performance was terrible. He had a contract that renewed itself every seven years. The day he died, they owed him seven years of salary. The Los Angeles Times dubbed it the ‘Golden Coffin.'”
“Then there’s Henry Ford!” Mr. Crystal said. Mr. Ford, he pointed out, hung on until his son, who was in the Navy, had to come home during World War II to rescue the family business from his ailing father’s increasingly incompetent leadership.
Mr. Crystal was getting warmed up. “Leonard Tow, chairman of Citizens Utilities, chief executive of Century Telecom–he’s got to be in his 70’s. He was one of the biggest pay abusers. All that may be changing. Everything’s going down–even his greed glands are shrinking!”
And then, of course, there was the legendary William Paley of CBS. Jealous, mean and paranoid in his later years, Bill Paley fired heirs apparent Frank Stanton, Arthur Taylor, John Backe and Tom Wyman while he himself stayed on, driving his company, and its ratings, into the ground. While he was in his 80’s, according to Sally Bedell Smith’s biography of Paley, In All His Glory , he repeatedly asked his friend Jeanne Vanderbilt, “Why do I have to die?”
“I wonder about Sumner having a little bit of the outbreak of William Paley’s disease,” said Mr. Crystal. “You know, he fired Frank Biondi, who was well regarded. Now he’s got Mel. I always thought Mel was pretty smart, but now he’s working for Sumner, and I wonder–is Sumner going to do what Bill Paley did, and send Mel to the board and get him fired?”
The Country Club
“I do think that there probably is a fear of loss of role, loss of status, with some loss of power in retirement,” said Rose Dobroff, a professor of gerontology at Hunter College. “When you get to be in your 70’s, you’ve seen enough of people being forgotten.”
“Without their business these people don’t exist any longer,” said Tom Wolfe, author, most recently, of A Man in Full , the story of Charlie Croker, an aging real estate mogul in decline. “Because suddenly nobody’s inviting them anywhere anymore. All they’ve got is money. They become non-people, no matter how powerful they may have been. In the case of Charlie Croker, he went to great lengths to try to make people believe that he wasn’t old by hiring young people. If I were Sumner Redstone, I’d probably feel the same way. As long as he’s running Viacom, he’s a force to be reckoned with. But the minute he steps down, what’s he got, the country club?”
As Marc Bell, the 32-year-old founder and chief executive of Globix Corporation, put it, “I figure when you stop working it’s as if you’re waiting to die.”
“The highest suicide rate in the United States is among white men in their 80’s,” said Dr. Robert Butler, chief executive of the International Longevity Center. “Retirement is an aberration, mostly a 20th-century phenomenon. For those who are functioning and healthy, it’s destructive. There’s only so much golf you can play.”
“People are very fearful,” said Mr. Wriston, who retired at 65 but still goes to work every day. “They think–what am I going to do on Monday morning? The phone doesn’t ring, and I’m in yesterday’s newspaper.”
The hustle never ends. You’re only too old if you admit you’re too old. And no one is going to do that.
“At the end of a dinner party, when everyone goes home, I still sometimes have to go out and listen to a band,” said Mr. Ertegun. He brightened. “Do you like rock ‘n’ roll? Call me up sometime and I’ll take you to hear a new group at CBGB’s or something.”
Additional reporting by Gabriel Snyder.