Recession lifting for luxury yachts? Tampa's Lazzara Yachts senses momentum

 
Boat sales ahoy? Reports of stronger than expected sales at last week's Fort Lauderdale International Boat Show last week earned Tampa's Lazzara Yachts (photos at the show courtesy of Lazzara) a plug in the Wall Street Journal Wealth blog this week. The builder of custom boats in the $4 million range registered more sales midway through the boat show than all of last year. Here's the full WSJ story. **UPDATE -- note that Rich Lazzara in the comment section below says the WSJ remark is not accurate but adds business is still pretty good this year-- Robert Trigaux/Venture blog

Yacht reps said that much of the increase yacht demand is coming from two regions; the Northeast and Middle East. “That correlates in timing with both the big bonuses about to be handed out by several Wall Street Investment banking firms at year end, and increased oil prices in the Middle East,” the WSJ article says.

Lazzara showed off its new, high-end, 92-foot LSX 92 at the show as two spokesmodels in evening wear sat on the private water terrace of the yacht sipping champagne.

"You see that smile on my face?" asks Rich Lazzara (see photo) in an enthusiastic video blog report from the boat show. The boat company sold four boats, and possibly two more, "The show was one of the best we've ever had," Lazzara says. "I'm not ready to say we are back where we've been," he added but Lazzara's well on its way.

This is the same Rich Lazzara recently quoted in Success magazine urging people that, to be a successful entrepreneur, "think like a child." And the same Rich whose own Web site is aimed at "Generation Next Entrepreneurs."

The boat show is one of the largest luxury boat shows in the U.S. each year with over 600 vessels from 25 to 214 feet in length docked along a mile-long intercoastal front pier that displayed over $3 billion worth of luxury yachts currently for sale.

Quite a different spin from the glum reports in recent years from the big South Florida boat shows.

-- Robert Trigaux, Times Business Columnist

After 40 years, banking industry's annual meeting faces protesters again in Chicago

Hundreds of protesters are gathering in Chicago this week to demonstrate at the American Bankers Association's annual meeting. The protesters are calling on banks that received billions in federal bailout money to help consumers who have fallen victim to bad loan practices and are losing their homes to foreclosure. The protesters are calling the rallies a "Showdown in Chicago."

Read more here in the Chicago Tribune, about the influence of unions in the protest here from NPR, and about picketing outside the Chicago offices of Goldman Sachs and Wells Fargo here from the Wall Street Journal.

In my many years of reporting on the banking industry, I covered ABA annual meetings from New York to New Orleans to Chicago to Honolulu. The last time there were serious protests directed so vigorously and specifically against bankers was in... Chicago, in the late and admittedly combative 1960s.

What goes around comes around.

Photo: Deborah Clark joins thousands of protestors demonstrating in Chicago for bank reform during a rally before marching to the Sheraton Hotel where the ABA annual convention was held. (Photo by Scott Olson/Getty Images)

-- Robert Trigaux, Times Business Columnist

Maybe BofA Ken Lewis is calling it quits because he's tired of being Washington's punching bag

So Ken Lewis, CEO of Bank of America and one-time regional bank executive for Tampa Bay, is calling it a day and retiring at the end of this year. Here's his letter to employees.

States Lewis: "Some will suggest that I am leaving under pressure or because of questions regarding the Merrill deal. I will simply say that this was my decision, and mine alone."

The media is going bonkers speculating on the wretched year Lewis has had dealing with the federal government's inquiries into the shotgun-wedding deal that merged Merrill Lynch into BofA last fall during the Wall Street meltdown.

Today's Wall Street Journal features a story with the headline "A Succession Mess at Bank of America"   while TheStreet.com trumpets "BofA's Problems Won't Depart With Lewis."  Rochdale Securities bank analyst Dick Bove, based in Lutz, told Fox Business in this video report that Lewis is one of the industry's better leaders and losing him is a "significant blow."

Who might succeed Lewis? Bove says Brian T. Moynihan, BofA's president of consumer and small business banking, may have a good crack at it. But Bove's choice is BofA veteran Barbara J. Desoer, currently president of the company's home loans and insurance division.

I have a simpler explanation why Lewis is retiring. Above, on the left, is Ken Lewis in 1987. On the right is Ken Lewis (in Washington by the way) in 2009. Need I say more?

-- Robert Trigaux, Times Business Columnist

New Forbes 400 list: Florida awash in billionaires but just two in Tampa Bay

Wake up and good morning. The new Forbes list of the 400 richest Americans is out and Florida can claim 27 or 6.75 percent of them who declare the Sunshine State as their home. Two of the 400 richest Americans -- Edward DeBartolo Jr. (see first photo) and George Steinbrenner (see second photo) -- are based in Tampa. (Photos: AP)

(I wonder. Did Forbes miss Sheila C. Johnson, owner of Innisbrook Resort and Golf Club in Palm Harbor and chairman of Salamander Hospitality? Or did her billionaire status fade in the rough economy?)

After a year of horrendous stock market declines, you have to imagine this was not a banner time for getting richer. Indeed, Forbes magazine says America's super rich are getting poorer. For only the fifth time since 1982, the collective net worth of the Forbes 400 fell $300 billion in the past 12 months from $1.57 trillion to $1.27 trillion. Divorce also diminished some of the wealthiest coffers as did the action of one individual -- fraudster extraordinaire Bernie Madoff -- whose record Ponzi scheme hurt many, including a few Florida billionaires. More on that below.

The 10 richest Americans -- yes, Bill Gates is still No. 1 -- lost a combined $39.2 billion in the past 12 months, a 14 percent decline. Here's the Forbes story about the 400.

Let take a closer look at the 27 Floridians (a loose term in some cases since billionaires often have many homes and probably declare Florida their primary residence for tax reasons) on the Forbes 400. What follows is a list of Floridians by wealth, in this order: Rank on the 400 (there are many ties), name, how much they have, age, hometown and the source of their wealth. I sprinkle some commentary throughout. Each link takes you to a longer description of each individual at Forbes. Here goes:

35  John Kluge, $6.5 billion, 95, Palm Beach, Metromedia. Been at the top of Florida's wealthiest Americans for many years.

56  Micky Arison, $4.3 billion, 60,  Bal Harbour,  Carnival Cruises.

139  Malcolm Glazer & family, $2.4 billion, 81, Palm Beach, sports teams, real estate. Owns the Bucs and Manchester United soccer. Malcolm's been ill for years so his kids run the show.

154  H. Wayne Huizenga, $2.1 billion, 71, Fort Lauderdale, investments.

158  Phillip Frost, $2 billion, 72, Miami, pharmaceuticals.

190  Robert Rich Jr., $1.9 billion, 68,  Islamorada, Rich Foods. Hope he likes fishing.

196  Wilbur Ross, $1.8 billion, 71,  Palm Beach,  leveraged buyouts. Expect to hear more from Wilbur as he invests in, and revives, failed banks.

196  Robert E. (Ted) Turner, $1.8 billion, 70, Lamont,  cable television. He's on a "plantation" east of Tallahassee. Largest individual landowner in country.

212  Bharat Desai & family, $1.65 billion, 56, Fisher Island, Syntel. All about outsourcing. Neighbors of the Gov. and Mrs. Crist?

212  Albert Ueltschi, $1.65 billion, 92, Vero Beach,  FlightSafety. Buffett bought his company.

230  Isaac Perlmutter, $1.55 billion, 67, Palm Beach,  Marvel. Marvel chief sold superhero comics outfit to Disney for $4 billion in August.

236  Fred DeLuca, $1.5 billion, 62, Fort Lauderdale, Subway.

236  Michael E. Heisley Sr., $1.5 billion, 72,  Jupiter Island,  manufacturing.

236  William Koch, $1,5 billion, 69, Palm Beach, oil, investments.

236  Igor Olenicoff, $1.5 billion, 67,  Lighthouse Point, real estate. UBS client hid an estimated $200 million overseas. Pleaded guilty to single federal tax felony and paid $52 million in back taxes and penalties.

272  George Lindemann & family, $1.45 billion, 73, Palm Beach, investments.

277  S. Daniel Abraham, $1.4 billion, 85, Palm Beach, Slim-Fast.

289  Thomas Golisano, $1.35 billion, 67, Naples, Paychex.

296  Edmund Ansin, $1.3 billion, 73, Miami, Sunbeam Broadcasting.

317  Edward DeBartolo Jr., $1.250 billion, 62, Tampa, shopping centers. Also pushed into sports management businesses.

317 Jeffrey Greene, $1.25 billion, 54,  Miami Beach, real estate and investments. Youngest of the Florida billionaires listed. Became a billionaire shorting subprime credit in 2007.

326  Norman Braman, $1.2 billion, 77,  Miami,  art, car dealerships. Former Philadelphia Eagles owner likes to file suit to stop use of public money for sports stadiums, including new one planned for Florida Marlins. Hurt by Bernie Madoff Ponzi scheme.

341  George Steinbrenner, $1.15 billion, 79, Tampa, New York Yankees. The Boss is in failing health. May yet see another World Series ring.

347  Charlotte Colket Weber, $1.1 billion, 66, Ocala, inheritance. Campbell Soup heiress.

366  Peter Lewis, $1.05 billion, 75,  Coconut Grove,  Progressive Corp. Insurance wealth.

371  Jeffry Picower, $1 billion, 67, Palm Beach,  investments. Alleged to have taken in $5.1 billion as a result of fraudulent returns from Madoff accounts before Ponzi scheme collapsed. Forbes hints it may have understated his wealth.

399  Dwight Schar, $950 million, 67, Palm Beach,  NVR Inc. How did he make the list? Not even a billionaire, but not bad recovery since 1992 bankruptcy.

-- Robert Trigaux, Times Business Columnist

Progress Energy may not want to publish exec pay, but some of it's already out there

Am I missing something here with this week's all-aflutter noise out of Tallahassee about the need to disclose -- and the power companies' refusals, so far, to do so -- the compensation of top utility executives? Here's what the St. Petersburg Times published yesterday:

"In their bids to get electric rates increased next year, two of the state's top electric companies said Monday that it's not in the public's interest for them to disclose how much they pay their top executives, according to documents filed with state utility regulators.

"Florida Power & Light and Progress Energy argue that disclosing how much they pay their executives in salaries, stock and bonuses is not necessary for the Public Service Commission to determine whether to allow it to raise rates by as much as 31 percent starting next year."

It's not in the public interest to disclose salaries? Well, let's make this really simple. The Times already published the pay of Progress Energy's Jeff Lyash who, at least until a few weeks ago, was CEO of Progress Energy Florida. (Lyash photo by Cherie Diez of the St. Petersburg Times.) He's since been promoted to the headquarters in Raleigh, N.C.

Here's what Lyash was paid in 2008.

Salary: $432,885

Stock awards: $905,018

Non-equity incentive plan compensation: $225,000

Change in pension value and nonqualified deferred compensation earnings: $323,904

All other compensation: $140,812

Total: $2,027,619.

That may not satisfy the Florida Public Service Commission, whose Nancy Argenziano wants a tally of everyone making over $165,000. But the compensation of the $2 million man at the top is public, if you bother to look. 

-- Robert Trigaux, Times Business Columnist

After record profit, Goldman Sachs CEO tells staff: Beware lavish spending, please

UPDATE Wednesday afternoon: Goldman Sachs says the government is investigating its pay practices and credit-derivatives trading. It made $100 million in trading revenue on 46 days in the second quarter. Read more here.

Wake up and good morning. This story puts a new twist on the old saying, "You can fool some of the people some of the time...." Because, if you're Wall Street wonder Goldman Sachs, you can now apparently snooker all of the people all of the time.

A terrific New York Post report this week says a politically sensitive Goldman Sachs CEO Lloyd Blankfein (in blue tie in AP photo) warned his employess to avoid making big-ticket, high-profile purchases "as the gold-plated Wall Street firm hunkers down amid a firestorm of public and political anger" over outsize bonus payments. Says the Post story:

"A source within the bank said Blankfein first began calling for an end to the conspicuous consumption late last year, but has stepped up his campaign in recent weeks as the White House has sought to rein in compensation."

Ordering Goldman Sachs employees to tone down conspicuous consumption is the equivalent of telling them to buy His & Her Bentleys rather than Rolls Royces, vacation at 5-star resorts rather than private chateaus or have Jeeves the Butler give up his personal trainer. There's a very good reason Tom Wolfe, author of the blistering Wall Street satire The Bonfire of the Vanities, created the term Masters of the Universein describing overindulged Wall Streeters gorging on their gargantuan bonuses.  

This is precious. As the Tampa Bay area unemployment ranks swell over 11 percent, as retirement accounts tank by 20-plus percent and home values wither to 2003 prices, and soon after Goldman Sachs took a multibillion-dollar handout from taxpayers, CEO Blankfein whispers: Spend, but discreetly.

Goldman accepted $10 billion in rescue funds from the U.S. Treasury to help it stay afloat last year amid a crisis of confidence on Wall Street but quickly repaid the money thanks to record revenues. Now Goldman, betting big on the market, has posted the biggest profit in its history during the second quarter as revenue from trading and equity underwriting reached all-time highs.

Goldman earned $3.44 billion in one quarter.

 Again, from the Post story:

"This is a sensitive time for us, and [Blankfein] wants to make sure that we're not being seen living high on the hog," said one Goldman exec. Indeed, the exec said that senior managers were ordered to tell their staffs that just because Goldman made a record second-quarter profit... they shouldn't bank on getting a fat bonus just yet. Blankfein was quoted as reminding staff that bonuses are based on full-year results, and that the year is far from over."

Is Goldman simply better than the rest, just awash in smarter Masters of the Universe? Or did it bet and happen to win at riskier investments -- not exactly the strategy the United States is looking for -- after the mortgage securities debacle? Or did Goldman benefit because Bush Treasury Secretary Henry Paulson (left, in AP photo) happened to be a former CEO of Goldman Sachs? Or, perhaps, is Goldman hitting home runs because most of the other Wall Street competitors are out of business, licking their wounds or effectively neutered under new owners? Let's see how the rest of this year plays out.

-- Robert Trigaux, Times Business Columnist

 

Healthcare compensation survey: Lincare, Wellcare execs are big winners

Wake up and good morning. It's one big payday after another for some Tampa Bay area executives in the healthcare field. According to just published Modern Healthcare magazine's annual nationwide compensation survey, the big winners in executive pay for 2008 include John P. Byrnes, CEO of Clearwater-based home oxygen provider Lincare Holdings, who moved up to the top spot among specialty-care providers thanks to the largest gain in 2008 from exercising stock options of any CEO on the list. His total compensation was $11.7 million.

Byrnes earned the top spot among specialty providers because he had the highest proceeds in 2008 from exercising stock options, at nearly $8.5 million. Byrnes can thank his long tenure at Lincare, having become its CEO in January 1997 and joining the board of directors in May of that year, Modern Healthcare said. Byrnes declined to comment for the magazine story.

Another winner in the survey was Todd Farha (in photo), the former CEO of Tampa's WellCare Health Plans. According to Modern Healthcare, for less than one full month at the helm in 2008, Farha took home $3.5 million, largely by cashing out stock options before he left the company. Farha received no severance or golden parachute when he left WellCare, according to company filings, and got just $17,223 at his time of exit, in unused vacation pay. He still managed to spend $16,000 in housing and car expenses in New York in January before his resignation, according to company financial statements, Modern Healthcare reported.  (Farha photo by Ken Helle of the St. Petersburg Times.)

Farha still could receive up to 130,000 unvested company shares under a 2005 agreement, provided he meets certain criteria, which likely will be determined by the outcome of pending state and federal investigations. Farha was replaced by Heath Schiesser as the company's top executive three months after the FBI raided WellCare's Tampa headquarters in October 2007. (And this last line, clarified from the original posting): Schiesser earlier this summer announced plans to leave Wellcare once the board of directors has selected a successor.

-- Robert Trigaux, Times Business Columnist

Golf and CEOs: Are links between the two waning?

Wake up and good morning.Tuesday morning pop quiz! Name the activity CEOs are most likely to publicly engage in amid this recession:

1. Fly on the corporate jet to testify before Congress.

2. Play a round of golf with some business clients.

3. Send the corporate grounds maintenance employees over to the home and spruce up the landscaping.

The answer, of course is No. 2 (though with some CEOs you never know what they'll choose). But CEOs playing golf, once a basic slice of upper management's lifestyle, is increasingly becoming an endangered pastime as more chief executives have been shamed into playing less golf, or at least humiliated enough by their tanking public image to play their rounds on the sly.

So says a USA Today story examining the treasured CEO perk of playing golf in a time of extraordinary public scrutiny. The story quotes Steve Bennett, who retired as CEO of Intuit in December 2007 after being ranked by Golf Digest magazine as the ninth-best golfer among large-company CEOs in 2006:

"CEOs are golfing less … and those that are still golfing are probably talking about it less."

A 2006 USA Today analysis of 115 golfing CEOs of large companies found 25 belonging to three or more country clubs at the same time. But an unscientific survey for the newspaper of 163 CEO golfers by the CEO organization Vistage International this month found that 29 percent had reduced their rounds and another 11 percent have stopped playing altogether.

In Miami, the new contract for the CEO of the Beacon Council, the area's principal economic development group, excludes a traditional golf course membership, says the Miami Herald.

More businesses also shun golf sponsorships these days. But one CNBC sports business reporter suggests a smart CEO would show up at a recent U.S. Open hospitality tent, for example, invite the media and explain the marketing benefits of sports marketing at major golf tournaments.

-- Robert Trigaux, Times Business Columnist

Minutes of Visit Florida board of directors reveal rifts in firing of tourism agency chief Bud Nocera

Wake up and good morning. It seemed only moments ago that Visit Florida chief Bud Nocera was toasted as one the country's top state tourism officials. But that's so yesterday. Now Nocera is out at the state tourism marketing agency and the political heat is focused on his departure pay package.

Visit Florida's decision this month to can Nocera without cause will cost the publicly subsidized agency $537,000 in severance payments. But that decision, as reported by the Orlando Sentinel's "Tourism Central Florida" blog, wasn't a unanimous one. The blog reports that minutes of Visit Florida's May 8 board of directors meeting show that Kevin Healy, an executive at Orlando-based AirTran Airways (shown in second photo), voted against firing Nocera, who had spent six years at the helm of the state's tourism-marketing agency.

Healy's was the sole no vote against 15 yes votes, the tourism blog says. But the minutes show several other board members raised questions about why they were being asked to fire Nocera, who was named the state tourism director of the year in 2007 by a national tourism industry trade group. 

For example, reports the blog, "after being told that Visit Florida's executive committee had unanimously endorsed the decision to fire Nocera, Glenn Hastings, the chief executive of the St. Augustine, Ponte Vedra and The Beaches Convention and Visitors Bureau, noted that he had always heard only glowing performance evaluations for Nocera. He said he was 'concerned' that future internal evaluations be better explained to the full board of directors."

Richard Goldman, the chairman of Visit Florida's board and the chief marketing officer at Amelia Island Plantation, repeatedly told board members that Visit Florida's executive committee decided it was time for a leadership change and that the move was not solely to appease state lawmakers, many of whom grilled Nocera and Visit Florida over agency spending during legislative hearings earlier this year, the Orlando Sentinel blog reports. Here's Goldman's statement on the matter.

The blog goes on to describe a clearly uncomfortable board of directors meeting in which some members chafed at the idea they were firing Nocera to soothe elected officials. Goldman called the move "an industry decision." Nocera was criticized by state lawmakers this spring for his management of the tax-subsidized tourism marketing organization. Among other things, legislators faulted Visit Florida for having spent tax dollars on a customer-service call center located outside the state.

The minutes also show Visit Florida expected that firing Nocera would spark a public backlash. Nocera's contract entitles him to a lucrative severance package that includes continuing his roughly $220,000 a year salary -- and $700 a month car allowance -- for the next two years, among other benefits. The funds are reported to be from private contributions, not taxpayer sources.

In a brief press release, Nocera was replaced as Visit Florida CEO by Chris Thompson (shown in last photo), the former chief operating officer.

-- Robert Trigaux, Times Business Columnist

Executive pay drops at most companies in '08

Wake up and good morning. I've always been amazed at the vast differences in the size of paychecks for CEOs of corporations whose performance so often seems so out of whack with the chief executive's rewards. And it's sad but somehow amusing to read the typical board of directors' lame rationale for blessing extraordinary CEO pay packages based on these three excuses: (1) Other companies like ours pay just as much or more; (2) the outside consulting firm (that we paid) told us to pay this much, and (3) if we don't pay a bazillion bucks, this 'terrific' CEO will go somewhere else. It's a 3-legged stool of nonsense more befitting 3rd-grader Tommy telling his teacher: "It's not my fault. The dog ate my homework."

The Hay Group, a firm specializing in corporate compensation, just analyzed the 2008 pay of 200 large U.S. corporations at the request of the Wall Street Journal. A sampling of the Big Bucks and not-so-big bucks of CEOs is intriguing and certainly begs the question: Why is the spectrum of pay between CEOs -- in the Hay example approaching $100 million  just in 2008 -- so astonishingly huge?

Though I've written on this topic literally for decades, it's back in the spotlight now that the federal government is getting more aggressive in setting pay caps (soon to be circumvented, I'm sure) for those companies that choose to receive taxpayer assistance in this troubling recession.

Overall, the Hay analysis found that the increase of CEO pay reversed in 2008 as shrinking profits led to smaller bonuses.As reported by the St. Petersburg Times, Progress Energy was one such company reporting a drop in executive compensation. According to the Wall Street Journal, the median salaries and bonuses for the chief executives of 200 big U.S. companies fell 8.5 percent to $2.24 million. The analysis examined proxy statements for companies with more than $5 billion in annual revenue.

Including the value of stock, stock options and other long-term incentives, total direct compensation for the CEOs dropped 3.4 percent to a median of $7.56 million. The decline was the first in seven years and only the second drop since the Journal began tracking CEO pay in 1989. While median CEO salaries grew 4.5 percent, bonuses fell 10.9 percent as profits decreased by a median 5.8 percent.

Here's a sampling of 2008 total direct compensation from the Hay Group's analysis that appears in the complete 200-company listing in the Wall Street Journal (subscription required):

* Top 5 in Pay: Sanjay Jha, Motorola, $104 million; Ray Irani, Occidental Petroleum, $50 million; Robert Iger, Walt Disney, $50 million; Vikram Pandit, Citigroup, $38 million, and Louis Camilleri, Philip Morris, $36 million.

*  Pay of Top Bankers in  Florida Market: Vikram Pandit, Citigroup, $38 million; James Dimon, JPMorgan Chase, $21 million; James Wells, SunTrust, $8 million; Frederick Waddell, Northern Trust, $6 million; Dowd Ritter, Regions Bank, $4.7 million; John Allison, BB&T, $3.8 million, and Ken Lewis, Bank of America, $1.5 million.

* CEOs who received no compensation in 2008: Eric Schmidt, Google; John Mackey, Whole Foods Market; James Rogers, Duke Energy, and Richard Fairbank, Capital One Financial.

* CEO pay of two Tampa  Bay area companies: Tim Main, Jabil Circuit (St. Petersburg), $4.8 million and William Crenshaw, Publix Super Markets (Lakeland), just $775,000.

-- Robert Trigaux, Times Business Columnist