I just finished McNish and Stewart’s Wrong Way: The Fall of Conrad Black, a truly eye-opening account of events leading up to Conrad Black’s ouster from Hollinger International, just preceding the laying of criminal charges on which he was tried in Chicago. Since Black, with his notorious penchant for suing into silence, has not taken action against the authors, one would have to surmise there’s nothing significant that is not provably true in this account.
And what an account it is! I thought I was “up” on the Hollinger International story, at least as it pertained to the shareholder ‘revolt’ that brought its notorious CEO down to earth. Hardly. What stood out for me were two things:
The sheer rapaciousness of the management team (overwhelmingly Black and Radler) in laying personal claim to the income of the company. Between 1997 and 2003, they received almost $400 M. in “compensation, fees, perks, and other payments”, representing “more than 95% of Hollinger International’s entire adjusted net income” for the period. Whew! Now that’s executive compensation! Black, in his ingeniously dismissive way, brushes aside such trifling as “Lilliputian”, mere ‘shareholders’, they, free to leave anytime.
The other thing that jumped out at me was of a classic example of irony. Black was “pushed out” of his CEO position by a special audit committee formed to address (and theoretically quickly sweep away) shareholder concerns. Their demand that Black resign as CEO was surprising and “humiliating” to Black personally. That he capitulated to it is probably (unintentionally) the smartest thing he ever did.
Had Conrad Black personally certified the corporate financial statements, as was then newly-required by U.S. securities law, that were due shortly after his resignation, he’ d undoubtedly still be fighting the raft of securities violations charges that would have ensued from Hollinger International’s spectacularly lax, incomplete and erroneous accounting of, most notably, payments to its executive team. Talk about “silver linings”……