Executive Careers Blog


  Friday, 24 Oct 2008 | 11:26 AM ET

Building A Successful Empire--Like The Tampa Bay Rays

Baseball pundits have called the Tampa Bay Rays run into the World Series a Cinderella story. I call it a great business model for fledging startups and even venerable companies.

In case you were too busy watching your stocks plummet and checking out Sarah Palin’s wardrobe, there’s a World Series being played right now pitting the Philadelphia Phillies versus the Tampa Bay Rays. Regardless of who comes out on top, one thing is certain, the Rays have surprised everyone.

Before the 2008 baseball season started, the Rays were 200-1 odds to win the World Series title. Currently, Vegas has the Rays favored to win it all (not that I’m checking). How did this team turn around their fortunes and what can we learn from their success?

At the end of 2007, the Rays owned the worst record in baseball. They finished dead last, which left their fan base wondering if the Rays could ever leave behind their stained image of being the laughingstock of the league. Granted, they weren’t spending cash like the upper-tier teams (in fact they had the lowest payroll in 2007 of the 30 teams), so what should their immediate reaction be?

If they were the Yankees and had pockets as deep and indulgent as Hank Steinbrenner than the most obvious reaction would be to go out into the free market and acquire the best players money could buy (which has become the Yankees MO). Instead, the Rays decided to inject their organization with some much needed vision.

While the Boston Red Sox were sleeping away a hangover from their 2007 World Series victory, the Rays held a press conference unveiling a new team uniform complete with a name change as well. The Tampa Bay Devil Rays of 2007 suddenly became the Tampa Bay Rays of 2008. Principal owner, Stuart Sternberg stated, “We are now the Rays—a new and improved version of the Devil Rays.” Then shortly after, the Rays began running ads with the slogan “We Are One Team,” a direction that the Rays president Matt Silverman said highlights an “improved team with talent allied with a fan base that reaches across the Tampa Bay region.” Did I mention, they were the worst team out of 30 in the MLB in 2007? Yet, they were optimistic. In other words, the upper management had vision when it came to their organization. They saw potential and promise when others were writing them off.

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Still, with a fan base hesitant about latching on to the Rays, the organization’s main goal was to create a winning team. After all what breeds fan loyalty more than success. But again, instead of spending large quantities of money to acquire big-name talent (they’re still the second lowest payroll in baseball), the Rays continued to stay the course by concentrating on building their team around young talent. By focusing on young talent, they were spending a minimum in salaries for what could be long-term rewards. Not only that, but they were allowing their fan base to build around talent that would become household names for years to come.

Currently, the Rays feature some of the best young talent in baseball, many of whom are grossly underpaid in market value due to the fact that they were signed long extensions early. Names such as Evan Longoria, B.J. Upton, Carl Crawford and Matt Garza will be players to be reckoned with for years to come. Especially savvy was the six-year, $17.5 million contract that the Rays signed Longoria with earlier this year before he had even proved himself on the MLB stage. Currently, Longoria is considered one of the premier players in the league, and by comparison to others in the league, the Rays are paying pennies on the dollar for his service. In other words, the Rays are benefiting for their prescience.

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  • Lastly, the Rays’ players have all adopted the vision of playing as one team. Their latest slogan has been “9=8,” which is a formula their manager Joe Maddon created that means, nine players going hard for nine innings equals one of eight playoff spots. To further emphasize the team’s unity, the players including the manager sported mohawks the past month to galvanize the team as well as loosen the clubhouse. It’s worked.

    So if you were following along, the Rays have done the following:

    - stayed the course

    - chose to patiently grow success and not just buy success

    - invested early into young talent

    - built a fan base around long-term acquisitions

    - fostered unity

    - cultivated some fun

    - expanded vision (when there was none)

    - got mohawks

    All of the bullet points above can be applied to your company in some way or another. Especially in a time when morale might be low, profits are slim to none and there’s a lack of employee loyalty—a renewed vision, commitment to your talent, team building and staying the course might just be what your company needs. I’m also guessing that sporting a mohawk can’t hurt.

    Caveat: this analogy will be completely inconsequential if the Rays end up winning the World Series, which will mean by 2009-2010, most of the young players will be asking for huge contracts. The Rays most likely will not be able to meet the demands of the large salary requests, which means you’re basically watching what will inevitably become the Yankees future roster.


    Won Kim is an editor at Vault. He graduated from Rutgers University and is an avid St. Louis Cardinals fan.

    Comments? Send them to executivecareers@cnbc.com

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      Thursday, 23 Oct 2008 | 10:24 AM ET

    A New Recipe for Cooking the Books

    Posted By: Brian Dalton

    Back in September, Katie Couric asked a certain hockey mom to discuss any Supreme Court case besides Roe v. Wade. The answer was silence.

    Before we judge too harshly, let us consider that Sarah Palin is actually representative of the way the majority of Americans view the Supreme Court’s role. When—that is to say 'if'—most people think about the Court, it is as the final arbiter of polarizing social issues: guns, the death penalty, abortion, and so on. But what that silver-tongued Calvin Coolidge said of the American people also applies to our highest court: The “chief business” of the Supremes is business.

    Cases concerning antitrust, interstate commerce, corporate liability, securities and other areas of business law are the Court’s bread and butter. Under the stewardship of Chief Justice John Roberts, whose own background is largely in appellate litigation on behalf of corporate interests, business cases are a “growth area” of the Court’s docket. Decisions in these cases will directly affect the rules by (or around) which companies—and their C-level executives—must play.

    There’s no question the most important business case from the last term was Stoneridge Investment Partners v. Scientific-Atlanta and Motorola. Dubbed by The Washington Post as the “Roe v. Wade of Securities Fraud Suits,” the case pitted investors in Charter Communications, a cable television company, against two of Charter’s partners in phony cable box transactions. The scam was a “round-trip” transaction: Charter overpaid the defendants for the boxes and the defendants turned around and returned the extra money to Charter by overpaying them for advertising. The effect was to artificially inflate Charter’s financial statements in order to boost its stock price. The investors argued that Scientific- Atlanta and Motorola should be liable for the fraud because they were party to a “scheme” to inflate the stock price. A federal judge is Missouri dismissed the complaint, and the 8th Circuit affirmed. The investors then appealed the Supreme Court, asserting that “the simplicity of the scheme was trumped only by its brazenness.”

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  • Before the Court was this question: Whether third parties may be held liable under SEC rules for “engaging in transactions that enabled a corporation to misrepresent its earnings to shareholders?” The ‘service sector’ of the securities industry trembled at the prospect of a decision for the plaintiff shareholders. Such a ruling might open the door for suits against third parties who provide services to public companies that defraud their investors.

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    Brazen or not, the defendants prevailed. In a 5-3 decision, the Court held that “non-speaking” third parties could not be sued by investors for conspiring to deceptively inflate a company’s stock price. The “non-speaking” modifier is crucial: a third party cannot be liable if the plaintiffs did not rely on any statements or conduct of those defendants in making the decision to purchase or sell securities. Give that rule a bath in some of Oliver Wendell Holmes’ “cynical acid” and it might read “Go ahead and work with all the shady public companies all you like. Just keep your mouth shut and your hands to yourself; do nothing that might be interpreted as vouching for the accuracy of their financial statements.

    As famine follows drought, so do massive securities fraud class action suits follow a global financial meltdown. But I-bankers, lawyers, consultants, accountants and other members of the ‘service sector’ of the securities industries can breathe little easier in the post-Stoneridge era: third party liability just ain’t what it might have been.


    Brian Dalton is Vault's senior law editor. He has J.D. from Fordham, and a B.A. in History from Middlebury.

    Comments? Send them to executivecareers@cnbc.com

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      Wednesday, 22 Oct 2008 | 10:28 AM ET

    Welcome to the 24/7 Job Search

    One of my coaching clients should have wrapped up her search weeks ago. But with budgets tightening, the job that she seemed poised to get may not be filled after all. This has happened twice now in her search. The first time, she had other companies in play but slowed down the pace on those leads and then had to rebuild. Now she knows to keep searches going simultaneously even when one seems promising. When the second imminent offer fell through, she barely missed a beat. Welcome to the age of the 24/7 job search.

    In investing, you shouldn't try to time the market because you may pull out on the handful of days when the market makes its big returns. Similarly, in the job search, persistent and regular action is critical to getting in front of the right opportunities at the right time. If you put yourself out there day in and day out, you are more likely to be front and center when that ideal job opens up. In today’s volatile hiring market, right place and right time could be anywhere, anytime, hence the 24/7 job search.

    If interviews are going well, don't stop looking elsewhere. The budget may disappear, another candidate may appear, and the chemistry may be off with a key decision-maker that only gets involved at the end of the interview process. Even if the offer does come through and you do accept it, the other interviews will serve as building blocks for your network, data points for your negotiations, and springboards for your next search.

    After all, in the era of 24/7 job search, your next search starts as soon as you finish this one. I don’t mean that you send out resumes and schedule job interviews on or before your first day of the new job or even shortly thereafter. But I do mean that you don’t ever stop managing your career -- keeping an updated resume, maintaining your network, being aware of opportunities (even if that means referring other people instead of yourself). Work your job but also work your career. There is a difference: the person who works a job has things happen to them; and the person who works a career is ready at a moment’s notice to deal with an unexpected restructuring, layoff, or golden opportunity elsewhere.

    The 24/7 job search isn’t bad, then, because it means that you take control over your career. It takes work and a shift in mindset, but once you do it and experience the power of having choices, you will never go back to the way things were. Besides, given this tight market, I’m not sure anyone can be successful with the old job searches techniques.


    Caroline Ceniza-Levine is co-founder of SixFigureStart a career coaching firm for Gen Y professionals. Formerly in corporate recruiting and retained search, Caroline has recruited for Accenture, Booz Allen, Citibank, Disney ABC, Oliver Wyman, Pfizer, and Time Inc. She currently writes career columns for Portfolio.com and Vault.com and teaches Professional Development at Columbia University School of International and Public Affairs.

    Comments? Send them to executivecareers@cnbc.com

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      Monday, 20 Oct 2008 | 4:58 PM ET

    'Joe the CEO' Weighs In on Election '08

    Posted By: Erik Sorenson

    I am boycotting the rest of the presidential campaign. I refuse to read or listen to any more rhetoric or attacks from either campaign. Obama blew his answer to the alleged plumber but McCain fumbled his prosecution of Obama at the debate last week. And now, everyone’s in a scrum \(including the media\) to score points with Mr. Wurzelbacher, the wannabe business owner. Talk about fiddling while America is burning.

    As a CEO, I am concerned about taxes; the ones I pay on behalf of my business and the ones I pay on behalf of my family. Like most CEOs and individual taxpayers, I constantly question my ROI on those taxes and wish the money were better spent. And sure, I am trying to keep as much as possible for my business and my family. The Uncle (Sam) withholdeth, and so do I. That’s human nature. But I accept government and taxes as facts of life, inextricable parts of the democratic equation.

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    I am not sure which candidate’s administration and work with Congress will result in lower taxes for me and my business (probably McCain) but it is way far from my biggest problem right now.

    I’m not sure either candidate has fully grasped what is going on out here, but it has little to do with taxes or earmarks or Bill Ayers. Credit has evaporated, fuel prices are unstable, healthcare costs keep climbing, consumers are suddenly frugal, customers are spooked and investors are frightened and impatient.

    I’m glad “small business” is getting some attention lately. There is so much focus right now on celebrity CEOs, along with the bank and insurance mega-CEOs, the medium and small guys have been tarred with the same brush. Look, a lot of us are lucky if we make north of Obama’s Mason-Dixon taxation line in base comp and it could be a long time before we get another bonus. (According to the Tax Policy Center only 2% of small business owners take home more than $250k a year.) And the bonus was never ever going to be the seven and eight figure variety folks have been reading about lately. Hell, we garden variety CEOs resent those bonus recipients as much as the next guy.

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    I have a number of friends and relatives who are CEOs. Many of them are tired and angry. One told me recently that his internal cost-benefit analysis has been tilting toward COST. Keep in mind that he lives in a Blue State where the cost of living is higher. ($200,000 in comp goes a lot further in Boston, Kentucky than it does in Boston, Massachusetts.) His investors are jamming him, his employees are anxious and less productive these days, he is tired of reading criticism of CEOs as a class in the press, and his family keeps asking if everything is okay. All his household costs are on the rise – fuel, food, healthcare, tuition, taxes. Oh, and he will not be getting a bonus this year.

    I’ve known him for a while now and suspect that he will not throw in the towel. Leadership is in his blood, he cares about his company and deep down he loves the challenge. We are all going through a big adjustment in the global economy and our own micro economies. It is painful and it will take some time. There’s a huge gap between Joe the Plumber and Dick “Joe the Banker” Fuld. In that gap are many serious-minded, honest, hard-working and successful CEOs. They may not be named Joe, but they deserve a little respect.


    Erik Sorenson is chief executive officer of Vault.com, Inc. Mr. Sorenson, 52, oversees the strategic direction of the global, New York-based media company. He is widely regarded as an expert on media strategy and industry trends, with experience spanning radio, local and network broadcast television, cable and syndicated TV, and the Internet. From 1998 through 2004, Mr. Sorenson served as president of the MSNBC cable news channel. He has won more than twenty Emmy awards as a writer, producer, and television executive.

    Comments? Send them to executivecareers@cnbc.com

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      Thursday, 16 Oct 2008 | 11:17 AM ET

    MBA's: Outdated In Today's Changing Economy?

    Posted By: Phil Stott

    Stephanie Myers co-authored this blog post with Phil Stott.

    Despite Monday's history-making stock market bounce, and worldwide government intervention to prevent a complete financial meltdown, the economy still looks bleak for the foreseeable future.

    While employees in the financial sector have undoubtedly borne the brunt of recent job losses so far, more and more workers at all levels are facing an uncertain future, and find themselves facing a key question: "Where do I go from here?"

    Regardless of what caused it, or where it ends up, this downturn has at least one thing in common with every other recession in recent memory: as it has progressed, the number of applicants to the most popular qualification for professionals—the MBA—have increased exponentially. It seems like the obvious thing for anyone seeking to make progress in their careers to consider in a tight job market, but is it really the best decision to make—especially for those already well progressed in their careers and currently operating at or just below C-level?

    We've put our heads together and come up with some reasons why those seeking to go back to school to ride out the downturn might be best to consider a different path than the well-trodden route to the MBA.

    More applicants = more competition
    With MBA applications up across the board (even if that doesn't necessarily translate into a higher quality of applicant, according to one career center contact we spoke to), anyone seeking to get into a program is facing a sterner test than they would have, say, a year ago. The ideal MBA candidate, then, will have to stand out even further than they would have previously just to get on the course. Dare we suggest that, when the going gets tough, while the tough may indeed get going, the savvy may be better getting into something else that has the potential to be just as rewarding?

    Where's the competitive advantage?
    Essentially, holding an MBA has become the gold standard for getting in at many companies (especially financial firms)—but is merely possessing one necessarily the golden ticket to a better position? After all, if everyone has an MBA, the value of such a degree quickly diminishes—especially in this economy. (Even The Wall Street Journal recently conceded this point, reporting that graduates are already dealing with a harsh job market.) But instead of worrying about whether now’s the time to go back and acquire an MBA, you might instead want to turn your concern to how you’re marketing yourself. One top school offering an MBA program said that it’s important to be able to “translate your skills to other sectors—or a different type of position, if necessary.” That means looking beyond your usual scope of jobs—or maybe even looking into a new sector altogether.

    Consider other options
    To this end, it’s important to keep in mind that the MBA is hardly the only game in town. Getting a Master’s in science, engineering or even geography or computer science may just give you that all-important competitive advantage, especially when a recruiter ends up with a pile of near-doppelganger resumes on her desk, all touting their fresh-out-of-school MBAs. Specializing your knowledge and being able to market it accordingly is always important, but even more so in these rough economic times.

    As one example, between the move toward cleaner fuel and the trend toward developing hybrid and electric automobiles, the alternative energy industry has exploded and looks set to continue to do so. As it grows, the industry is going to need more experts in the field—and that includes consultants, analysts and those with backgrounds and schooling in engineering. And those financial houses currently handing pink-slips to even their highest-level employees? They’re going to need people who understand these new industries to help them guide their future investment decisions. Anyone deciding to work within these industries and get a suitable Master’s degree to match will automatically find themselves apart from the pack—period.

    An uncertain future demands new answers
    With governments around the world calling for a new way of doing business in the financial sector, it seems safe to say that the future of business may bear scant resemblance to what we know today—or knew before the housing and credit markets imploded. Not to put too fine a point on it, the vast number of MBA degrees currently afloat in the hiring pool may be a big part of the puzzle that’s responsible for getting us into this mess. Whether it's the people, the system, the MBA, or a combination of them all that's responsible for the current crises, it seems reasonable to assume that following the same approach that got us here isn’t likely to get us to where we want to go.

    With that being the case, those interested in becoming the leaders of tomorrow may do well to consider how best to get there. Given that the MBA represents the status quo in business qualifications, and that the foundation our economy is built on has all but disappeared before our very eyes, future leaders—or indeed those in hiring positions—may want to consider how well a qualification that conforms to the status quo is likely to serve them in future.


    Phil Stott is a staff writer at Vault.com. Originally from Scotland, he now lives in New York, and has also lived and worked in Japan, South Korea and Eastern Europe.

    Stephanie R. Myers is a staff writer for Vault.com. She possesses a bachelor’s of journalism from the University of Texas and resides in Brooklyn, New York.

    Comments? Send them to executivecareers@cnbc.com

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      Wednesday, 15 Oct 2008 | 9:53 AM ET

    Are CEO's Ready To Face Career Instability?

    Posted By: Anu Rao

    Are American CEOs confident enough to try a performance-based compensation model?

    In pro sports, both older athletes declining in performance and younger, unproven ones in their physical prime will sign incentive-laden contracts with relatively low guaranteed salaries. This equates to a probationary period — if you produce, your salary goes up next year. It worked just dandy for future Hall of Famer Frank Thomas. He signed a $500K one-year deal with the Oakland A’s at age 37, performed amazingly well, then landed a two-year deal for some $9 million annually.

    Dan Amos, CEO of insurer Aflac, accepted a similar challenge: In May 2008, Aflac became the first U.S. company to embrace a say-on-pay structure, with shareholders voting on Amos’ compensation. How did Amos fare? Well, reflecting the fact that Aflac stock increased over 3,000 percent during Amos’ 18 year reign, over 93 percent of Aflac shareholders agreed he was worth his $11.96 million tab.

    In 2007 average CEO pay in the U.S. was $10.5 million — 344 times higher than the average American worker's wage (figures compiled by the Washington, D.C.-based Institute for Policy Studies and Boston-based United for a Fair Economy). The American public is at last examining this ratio, and hard: Did these executives really contribute 344 times more than the average worker?

    Certainly C-levels operating in complex financial environments and sectors require a rare degree of capability and experience. The shortage of people with this talent level is genuine, and given basic supply and demand, high remuneration for this very narrow circle is expected. History also shows that a single visionary can single-handedly grow a company into something extraordinary (a mighty fine horseless carriage, Mr. Ford), and if you ask their stakeholders, they are/were worth every penny.

    That said, the mistakes in judgment that heavily contributed to the current financial predicament were made by some of the highest-paid (by extrapolation: “smartest and best”) executives in the world. Assuming that stratospheric salaries are the norm for this pinnacle of exec is to assume that all who bear or aspire to these titles come with a “base” level of “superskills.” The spectacular errors in judgment of pricey CEOs across the country — now, sadly exposed as commonplace — shows us that this is simply not the case. Just as not every baseball player is an A-Rod, not every CEO is a Buffet. (Warren Buffet’s yearly base? $100K, and a bonus tied to increases in shareholder value). The problem comes when companies pay good managers like great managers, confusing the difference.

    Shareholder outrage is having immediate effects on the hiring packages of the future. Gone will be the compensation “carrots” that are counterintuitive to business success, the golden parachutes that allow for lavish compensation in the event of a firing, resignation or "early retirement” (see Bob Nardelli of HomeDepot). Instead of a system that implicitly rewards for failure, expect a system that only rewards (yet exponentially more) for success. The incentive for strategic risk-taking will still exist, but the parallel incentive for ill-considered risk-taking — those problematic parachutes — will be removed.

    New contractual conditions will come with a different degree of oversight. As Richard Fuld’s Congressional testimonyaptly underscores, if ever a job requires regular supervision, it is the CEO’s. The risk of a CEO’s poor decisions is socialized across the spectrum of a company (anyone in New York out of work because of some chief officer’s lack of caution, foresight or simple greed? anyone?) and all levels of workers take the hit when such executives drop the ball. As we see all around us, even strong businesses can be run to the ground in a year. Stakeholders have been made painfully aware of this, and will not soon forget the lesson.

    Gilded nameplates aside, being CEO is still a job. Jobs come with responsibilities, and with the natural expectation that these responsibilities will be fulfilled. As shareholder activism increases, even platinum execs will be subject to review processes, merit-based pay structures — and yes, the same career instability that the majority of workers face in the current job climate. The average worker combats this insecurity by proving his worth in every way he can, by bringing something to the table every day. This is how the vast majority of American workers operate, and the modern CEO will be no exception. The simple truth is that career instability is a great motivator.

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    Anu Rao is a Senior Writer at Vault.com. She has her BA in English from the University of California at Berkeley, and is a Masters candidate at NYU, studying Communications, Media and Marketing.

    Comments? Send them to executivecareers@cnbc.com

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      Monday, 13 Oct 2008 | 1:13 PM ET

    CEO's: Really, Nothing To Fear?

    Posted By: Erik Sorenson

    It's hell being a CEO or CFO these days. Well, try blogging. No sooner do I write something than it becomes outdated. So I'm going to blog about last week in hopes that history doesn't rewrite itself overnight.

    As the markets were crashing last week, much was written about the echo chamber effect driving a widespread panic. The fear factor is not helped of course by mainstream media clamoring on TV and radio, nor by print symbolism such as the wooly mammoth Ice Age art in Business Week, alien ghouls floating across a section cover in the venerable Wall Street Journal, and a drowning scene cover for US News & World Report.

    Perhaps in reaction, the week began with a blood red cover page on the New York Post exclaiming: "We have nothing to fear, but fear itself!"

    It's a much-repeated bromide since the collapse of AIG and Lehman, but many of us now believe that we do have more to fear than fear. Since no one can clearly explain what's going on or predict which company is going to disintegrate next, maybe there is something fundamentally wrong. Maybe since we've all been riding a giant credit bubble for three decades, the chickens have come home to roost. Just maybe we are being served a long overdue reality sandwich, to be followed by the mother of all sobriety hangovers.

    Budget Season
    What will this week bring? Will GM merge with Chrysler, or Ford? A 7000 Dow? Will GEstock sink below 20? Another major bank breakdown? Adding to the apocalyptic gloom for many of us is the dawning of the 2009 budget-making season. Are we budgeting for a shallow recession with a big turnaround by third quarter? Or will it be a sharp recession with a mid-year comeback? Or, how about a deep recession with no light in the tunnel until 2010? Or, as some suggest, something worse?

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    So add it up: a pyramid of debt, a banking crisis, an energy challenge, a US Presidential Election, and your company's budget season. I was in a budget meeting Thursday afternoon, discussing variables for 2009 in a room with no TV or computer. It lasted less than 90 minutes. By the time we adjourned the market had dropped 500 points. So much for variables.

    What's a mother (exec) to do?
    Well, my mother always said you can't budget for a depression. Of course, that was just an expression from someone who happened to live through the last Great Depression. But I think it's pretty good advice. If you're not moving, you're standing still. So keep moving. Expect some hard times, but expect a recovery. It's hard to have faith in leadership when we're not really sure who the leadership will be, but assume they will get their arms around the issues before year's end and the digging out can begin.

    2009 will look different than 2008 and capitalism may work differently too, but assume some version of business as usual and make a plan for attacking the New Year. Protect your core, cut your expendable ballast, run as lean as possible and position to invest in new rapid growth sectors. If you have the bandwidth, produce a Budget Plan B and even C. And try to keep the blinders on when it comes to things you can't control like global liquidity and the DJIA. Oh, and please pass the prayer beads.


    Erik Sorenson is chief executive officer of Vault.com, Inc. Mr. Sorenson, 52, oversees the strategic direction of the global, New York-based media company. He is widely regarded as an expert on media strategy and industry trends, with experience spanning radio, local and network broadcast television, cable and syndicated TV, and the Internet. From 1998 through 2004, Mr. Sorenson served as president of the MSNBC cable news channel. He has won more than twenty Emmy awards as a writer, producer, and television executive.

    Comments? Send them to executivecareers@cnbc.com

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      Friday, 10 Oct 2008 | 10:03 AM ET

    Investment Bankers: Get Used To New Pay Structure

    Posted By: Derek Loosvelt

    Like a married man being interrogated by his wife about an alleged extramarital affair, Lehman Brothers CEO Dick Fuld sat in front of the House Committee on Oversight and Government Reform on Monday for nearly two hours.

    He was deflecting accusation after accusation that he misled and profited at the expense of shareholders, holding firmly to the advice given to me by a college roommate with questionable ethics on what to do if a significant other ever accuses me of cheating: Deny Till You Die.

    It was clear that the members of Congress cross-examining Fuld weren’t buying his innocence, and in closing, Rep. Henry Waxman, chairman of the committee, told Fuld, “You don’t seem to acknowledge that you did anything wrong.” Indeed, Fuld did an outstanding job of dodging just about every question he was asked, performing especially well on ones merely calling for a yes or no answer, better than any political debate question evader I’ve seen in a long time. However, Fuld did acknowledge one thing, which will go a long way to cut into compensation on Wall Street.

    When asked if he’d support the much talked about clawback provisions—in which employees could be forced to give back part or all of their annual incentive bonuses if their performance lags in subsequent years—Fuld refused to answer in the affirmative or negative but did offer his support for “a longer-dated payout system,” alluding to a bonus system based on not one year of performance but several (or, at least, more than one). This was an oblique way of admitting that incentives are currently in place for investment bankers to make short-term gains at the expense of their firm’s shareholders.

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    Congress, which was outraged with the millions of dollars Fuld made prior Lehman going bankrupt (you could almost see the representatives imagining how much Fuld’s compensation dwarfed theirs as they grilled the Lehman CEO), is eager to find ways to curtail the compensation structure now ruling Wall Street, and with clawbacks seeming to be a tough sell, a longer-dated payout system just might prevail—and for good reason.

    It would allow bankers to keep their incentives to drive up deal volume and their firm’s profits, while maintaining the possibility of big paydays. This would be attractive to bankers and investors alike, and though it wouldn’t create accountability for possible losses several years out (which would certainly cut into bankers incentives and thus investors’ pockets), it offers a solid alternative to giving bonuses in stock, a practice Congress seems less than interested in, given their comments.

    When Fuld told the committee he lost millions of dollars in stock after Lehman failed (stock he accepted as part of his compensation) and was perhaps the shareholder who took the biggest hit, Waxman told him, “I don’t accept the fact that you assert the system worked when you lost your stock.”

    To be sure, it’s becoming clearer and clearer that about the only thing Congress is willing to accept with respect to Wall Street compensation is the current system doesn’t work, and Monday's hearing was yet another indication that investment bankers, who still have jobs, should start preparing for new ways to accept their bonus checks.


    Derek Loosvelt is Vault.com’s global finance editor. He has a BS in economics from the Wharton School at the University of Pennsylvania and an MFA in creative writing from The New School. He is a writer and editor and has worked for Brill’s Content and Inside.com. Previously, he worked in investment banking at CIBC and Duff & Phelps.

    Comments? Send them to executivecareers@cnbc.com

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      Friday, 10 Oct 2008 | 9:54 AM ET

    Lost Your Job? Here's What To Do With 401(k)

    Posted By: Cliff Mason

    If you lose your job or you leave your job \(not something I'd recommend right now--this is a cling to your employer moment\) and you've got some money in a 401\(k\) plan, should you roll it over into an IRA? The conventional wisdom says yes.

    But these are unconventional times. With the market getting killed almost daily, you could probably wait for a better moment to invest in your retirement account. If we really are heading into a depression, remember that the market didn't bottom during the great crash of 1929, although there was an interim bottom with the Dow at 198.6 in November of 1929, it bottomed in 1932 with the Dow at 41.22.

    I don't think things are that bad, but I do think there will be better opportunities for investors to buy stocks, especially young investors with a lot of time ahead of us, if we wait a few months, if not a few years. True, you could keep your money in cash inside an IRA or in bonds for that matter, but you won't get much appreciation from that, and when you're investing for retirement in your 20s, capital appreciation is the point.

    On the other hand, the reason they tell you to roll that money over into a new 401(k) or an IRA is a pretty good one: if you don't you'll pay a 10% penalty in addition to paying income tax on all the cash in your 401(k) as it becomes cash in your wallet. That's a big hit, and if you don't need the money, then follow the conventional wisdom, roll it over.

    But if you've just lost your job in this new world of rising unemployment I think you'd be better served with the money, even if the tax-man takes some of it away. Consider also the fact that it's going to be pretty hard to borrow money from anyone except family and friends unless you've got great credit or a decent net worth, in other words, unless you don't need it.

    If you've gotten laid off, fired, axed or terminated (as in your employment), keep the cash and throw the conventional wisdom out the window. The fat years are over, I don't know if we're looking at seven lean ones, but I do know that saving for retirement, basically laying out money to pay for your expenses in the distant future, only makes sense when you've already taken care of your expenses in the present and the more immediate future.

    It's time to stop worrying about tomorrow in a metaphorical sense, as in fifty years down the line, and start worrying about tomorrow literally, because no matter what, it's going to be rough.

    So in the immortal words of the Steve Miller Band, take the money and run!

    Questions? Comments? Send them to millennialmoney@cnbc.com

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      Tuesday, 7 Oct 2008 | 11:18 AM ET

    Hospital Careers For Executives--Something To Think About

    In an age when Barack Obama, if elected, plans to name the nation’s first chief technology officer (CTO), and technology behemoths Microsoft and Googleare setting out to create vast repositories for personal health information, being a CTO or CIO (chief information officer) in the health care space is an increasingly appealing career option for executives.

    A study presented to the House Steering Committee on Telehealth and Healthcare Informatics earlier this year cited that the country's health care system will require 40,000 additional health IT professionals (close to 40 percent) as the nation moves toward wider IT adoption.

    In the health care field, CIOs are responsible for setting forth the organization's long-term strategies and managing hardware and software applications, while CTOs generally manage day-to-day operations and technology standards and practices. These tech positions, which can net up to $400,000 for administrators of large multi-hospital systems, are increasingly requiring an MBA or MHA (masters in health administration) and previous director-level IT experience in the health care field.

    Chief medical information officers (CMIO), technologically-oriented MDs who usually have either an MBA, MHA or MMM (master of medical management) and help tie together the medical and technological aspects of a health care setting, are becoming more commonplace too. To this end, medical informatics programs, like the Cleveland Clinic Medical Informatics Fellowship and the Yale University Medical Informatics Fellowship, are cropping up all over the nation to train these new doctors in the latest informatics.

      • 2008 Health Confidence Survey: Americans Are Battered by Rising Health Care Costs

    With Google Health, Microsoft HealthVault and Dossia making partnerships with big health players like Cleveland Clinic and Kaiser Permanente, the $1.4 billion electronic personal health record market will only grow. President Bush also made it a goal to outfit all Americans with electronic health records by 2014, so that means the health care space will need a growing number of high-level technology experts to implement this infrastructure.

    Even with the economic downturn hospitals are still rolling out their EMR programs and moving forward with expansion projects: Johns Hopkins Hospital is moving full steam ahead with their $1.2 billion redevelopment project to replace half their inpatient beds and add two clinical towers, while Massachusetts General Hospital is set to open a 200,000 square-foot outpatient center in Danvers in June 2009.

    Health care 2.0 components like social networking will also add to health care IT growth. Combine these two in-demand fields of health care and IT and you've got economic gold that even Ben Bernanke can't undermine.


    Jennifer Prestigiacomo is Vault.com's healthcare writer. She has a double bachelor’s in journalism and in radio/TV/film from The University of Texas at Austin.

    Comments? Send them to executivecareers@cnbc.com

    »Read more

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