Who's Up, Who's Down
Normally, this annual list is devoted to the wealthy and the elite. But these are not normal times. The recession and the war on terrorism have sobered the bullish mood that so recently greeted the new millennium. The fact that Sumner Redstone's fortune is reportedly $8.1 billion or that Beacon Hill's Amos Barr Hostetter Jr. has dropped a couple hundred mil seems unimportant. Because over the two years since the recession Â— mild as it may be Â— began, thousands of Massachusetts residents have lost their jobs and billions of dollars have disappeared in the stock market.
So now that the economy is beginning to stir again, we decided to look at how local business leaders have fared Â— who navigated their companies through the rough waters, who's gone down with the ship. Putting together this sort of list is never scientific. There will be arguments. But from clothing to construction, biotech to football, the businesses run by these players are a cross section of the local economy. Who knows: Maybe next year things will return to normal and one of these men or women will show up on our list as the wealthiest person in Boston.
58, founder and chairman, The Kraft Group
Lesson One on reversing public opinion: Win the Super Bowl. Whatever hard feelings lingered over the Patriots' stadium brouhaha have gone the way of Foxboro Stadium itself. Now the team that cost Kraft $200 million in 1994 is worth at least $524 million and rising, and his $375 million CMGI Field comes with all the fixings. Off the field, Kraft's paper companies have held steady Â— even Israel-based Carmel Container. And he and wife Myra have continued their philanthropy, which included an $11.5 million gift to Columbia University.
Edmond “Ted” English
48, president and CEO, The TJX Companies, Framingham
September 11 likely affected no local company as it did TJX, parent of retailers T.J. Maxx and Marshalls. Seven TJX employees died on American Flight 11. Immediately, English showed why he was named CEO in 2000: He brought in counselors and chartered a plane to carry stranded employees home to their families. Six months later, he proved his worth again when TJX reported profits of $500 million. Meanwhile, the company's stock price has nearly doubled since English took over.
46, chairman, Bright Horizons Family Solutions, Watertown
44, executive chairman, Bright Horizons Family Solutions, Watertown
Husband-and-wife-team Mason and Brown have done everything together Â— worked with famine and war victims in Sudan and with Cambodian refugees, founded the Horizons Initiative to help homeless mothers and children in Boston, raised a family. But with Bright Horizons they've done the seemingly impossible: turn a profit while being socially responsible. The childcare and education provider reported profits of $11.5 million last year. It increased its staff by 20 percent, and the stock price has nearly doubled since May 2000. Mason's new book, The Working Mother's Guide to Life, comes out in September.
69, CEO, TAC Worldwide companies, Dedham
The largest temporary-employment firm based in Massachusetts, TAC saw a few layoffs last year, but the privately held company founded by Balsamo in 1969 still managed to rake in a reported $850 million in sales. Now, with the economy rebounding, TAC has new offices, a new initiative to recruit minorities, and history on its side: Emerging from the last recession, the staffing industry grew at 10 times the overall employment rate. Perhaps the best signal that Balsamo is on top came in January, when the city of Newton approved his $250,000 donation toward building the Salvatore A. Balsamo Millennium Park.
53, CEO, Gillette, Boston
When he was hired last year, turnaround specialist Kilts was just what was needed at “World Shaving Headquarters” following a long period of decline. So far, so good. One of his first moves was more symbolic than anything: He stopped talking up his company's stock to Wall Street. Since then, the share price, which once peaked at $64.38, has actually climbed from around $28 to $34. About 10 percent of Gillette's workforce was laid off in Kilts's first year, but the company reported a $200 million profit in the fourth quarter. And after a period of losing market share, Gillette-owned Duracell is again beating up that damn bunny.
James “Jim” Davis
49, Chairman and CEO, New Balance Athletic Shoe, Brighton
In the 21 years since Davis bought it for a measly $100,000, New Balance has become the world's fourth-largest athletic footwear company, with around $1 billion in sales. It moved into its Pike-side headquarters in 1999. But Davis has made sure New Balance is about more than just numbers. Unlike his competitors, Davis maintains U.S. factories, allowing New Balance to stitch “Made in USA” on some of its shoes. The company pledged $1 million to the Twin Towers Fund and, in March, announced that it was donating 28,500 pairs of shoes to a program for Afghan girls.
52, president and CEO, KB Toys, Pittsfield
Kids will be kids, even when they're running a $2 billion company: Glazer likes to take out his stress on a race-car arcade game he keeps in his office. KB Toys has been racing along since a Bain Capital-backed management buyout in December 2000. Started in 1922 as the Kaufman Brothers candy company, KB now has more than 1,300 stores and 6 percent of the $30 billion U.S. toy market. Glazer is pushing KB into alternative spaces Â— namely, partnerships with Sears and the Safeway supermarket chain.
Lily H. Bentas
62, chairman, president, and CEO, Cumberland Farms, Canton
It's been a decade since Bentas took over following the Cumberland Farms bankruptcy, and the family-owned company, which began with one dairy cow, has come a long way. It's now one of the nation's largest convenience-store chains with more than 1,000 outlets along the Eastern Seaboard and a majority stake in local petroleum-storage firm Gulf Oil L.P. It has sales upwards of $1.5 billion, which puts Bentas at the top of a Babson College list of the state's most successful women-led businesses. And the squabbles between Bentas and her brothers George and Demetrios Haseotes were finally settled in court. Bentas won.
71, president and ceo, Nypro Inc., Clinton
Lankton is what Dustin Hoffman's character in The Graduate might've been if he had taken that famous advice: a plastics legend. His injection-molding company makes plastic parts for products ranging from seat belts to cell phones and has 26 plants in 12 countries. Nypro has posted 16 consecutive years of profits, including $31.7 million last year. Lankton, who sold Nypro to his employees in 1999, is in the Plastics Hall of Fame (yes, there is one) and was named 2001 New England Master Entrepreneur of the Year by Ernst & Young.
44, president and CEO, Biogen, Cambridge
Thus goes the volatile biotech sector: Biogen's stock price fell in March on news that a Swiss company had received FDA approval for a rival to its multiple sclerosis drug, Avonex, which boasts $1 billion in annual sales; of course, the shares had just jumped on news that Avonex was nearing approval in Europe. But Biogen has mostly held its own lately, posting a $272 million profit last year and a steady $45-$55 stock price. Its potential blockbuster psoriasis drug, Amevive, goes to the FDA this month. Along the way, Mullen earned $8.7 million in fiscal 2000 alone, and the company has set up a $1.1 million scholarship fund for children whose parents died September 11.
60, founder, Kenan Systems Corporation, Cambridge
In early 1999, the “Bill Gates of Turkey” sold his Cambridge software company, Kenan Systems, to Lucent Technologies for $1.48 billion in stock and stayed on to guide Lucent's software group. Twenty months later, he left. Since then, Lucent has collapsed, its stock falling from around $75 to $5; in December it resold the former Kenan group for $300 million. Last fall the courts ruled in Sahin's favor against his ex-wife's petition for more money from the Kenan megadeal (she got more than $1 million in their 1996 divorce settlement). Now, Sahin can relax and monitor his $100 million pledge to his alma mater, MIT.
45, partner, Highland Capital Partners, Lexington
Ask Davis if he thinks e-business is still viable, and you'll probably get a quick lesson on how to become a cybermillionaire. Or he might just hand you his bestselling memoir, Speed Is Life, which explains how he did it. Davis stepped down as CEO of TerraLycos last year, just one year after the $5.4 billion Lycos merger that made him rich. Since then, he's been solving other people's financing problems: In February, he led Highland's $10.7 million funding of Burlington-based Performix, his first major foray into the VC thing.
Edward G. Watkins III
65, former owner, Simplex Time Recorder, Gardner
The Watkins family has always known that time is money. From 1894, when Watkins's grandfather patented the “Simplex” time clock, until the 1980s, Simplex held a virtual monopoly. After punching in at the helm in 1967, Watkins III diversified into fire alarms and security systems. He also went to work as a philanthropist, giving some of his estimated $900 million to local hospitals and sitting on the boards of various charities. In January 2000, just before the economic slowdown, he sold Simplex for $1.2 billion to Tyco International, which sold it to Kronos two years later.
58, chairman and CEO, Kronos, Chelmsford
If timing is everything, then Ain's was perfect when in 1977 he founded Kronos, the world's leading frontline labor-management company. Just as microprocessors were coming of age, Ain developed a timeclock that automated timekeeping. Now, Kronos can boast of more than 50 percent market share, 88 consecutive quarters of revenue growth Â— $300 million last year Â— and 59 consecutive profitable quarters. It recently acquired its former rival SimplexGrinnell, a unit of struggling Tyco International.
Gordon R. Cooke
55, chairman, president, and CEO, J. Jill Group, Quincy
When the business world got dotcom funky, women's clothing retailer J. Jill thought it might try that, too. The shift to “edgy urban” bombed: The stock price fell almost 75 percent, below $4, and losses piled on. So Cooke refocused on the basics: casual clothes for “active, affluent women age 35 to 55.” Now, the dotcoms are gone, and J. Jill is thriving. The 15-year-old company posted a record $13.1 million in profits last year, added 29 more stores, and watched its stock climb back into the $20s. For his efforts, Cooke received $1.5 million in 2001 and has already sold stock worth more than $10 million so far this year.
60, chairman, president, and CEO, Talbots, Hingham
It's hard to imagine Zetcher could beat 2000, when women's and children's retailer Talbots earned $115 million and he raked in an estimated $62.5 million, which got him pegged as the nation's most-overpaid CEO. But last year, amid the down economy, Zetcher backed it up: Talbots' profits grew by 10 percent to $127 million; 82 new stores were opened; and there are plans for men's stores. Zetcher also received the National Retail Federation's Gold Medal Award. And last summer his racehorse, Gabriellina Giof, won its American debut.
Joanna T. Lau
42, founder, Lau Technologies and Viisage Technology, Littleton
In the mid '90s, Lau received industry recognition for turning her money-losing defense-system developer into a $50 million security services operation. Following September 11, Lau Technologies subsidiary Viisage's own advancements in recognition Â— biometrics, to be precise Â— put Lau back in the spotlight. Last November, she testified before a Senate subcommittee about face-recognition technology. In December, Lau Tech sold two units for $41 million. Then, in January, Viisage Â— whose stock has quadrupled since September Â— turned around and bought its parent company in a deal worth up to $27.5 million.
66, CEO, Gulf Oil L.P., Chelsea
40, president, Gulf Oil L.P., Chelsea
First energy-friendly Dubya won (helped by the more than $500,000 John Kaneb has reportedly contributed to the GOP). Then John, who was already a limited partner, upped his stake in the Red Sox. And finally, after three flat years, petroleum wholesaler Gulf Oil's revenues rose to nearly $2 billion in 2001. Gulf now sells gas to 1,800 independently owned stations. The cream also rose at another Kaneb company, local dairy HP Hood, which saw revenues increase to $700 million. Blame those baby boomers again.
David F. D'Alessandro
50, chairman, president, and CEO, John Hancock Financial Services, Boston
D'Alessandro isn't afraid to put his money where his mouth is. In addition to raising $1.7 billion with Hancock's IPO in 2000, he has championed affordable housing; challenged the International Olympic Committee; and, in March, called for Cardinal Bernard Law's resignation. The public listens because Hancock continues to show well, with $611.5 million in profits last year; a stock price around $38, up from $17; and rumors of a sale. All that outspokenness hasn't hurt D'Alessandro's paycheck, which was $8.1 million last year.
53, president and COO, Perini Corporation, Framingham
If you're the gambling type, Band is your lucky charm. Aside from doing $378 million of Big Dig work, general contractor Perini, through its subsidiary Perini Building, has constructed several casinos in Las Vegas and has an $870 million contract to expand the Mohegan Sun complex. Last year saw a 40 percent increase in revenue, to $1.55 billion, and $26.4 million in net income. Perini's stock has doubled in the last two years, and its workforce has grown nearly 40 percent.
Kennett F. Burnes
58, chairman, president, and CEO, Cabot Corporation, Boston
For Burnes, it's all about chemistry. Cabot, which produces chemicals such as carbon black, has defied the stock market's downward trend. Its share price has tripled over the last two years. In 2000, the company successfully spun off Cabot Microelectronics, and in February it acquired Japan's Showa Cabot Supermetals for $100 million. Profits hit $38 million last year, earning $4.3 million for Burnes, who took over in March 2001.
Lelio “Les” Marino
65, CEO, Modern Continental, Cambridge
Commuters may complain about the Big Dig, but the recession hasn't slowed the digging; in January, the project's favorite construction company, with more than $2 billion in contracts, won the final contract, $179.4 million to connect the Pike and the Expressway. And it has already prepared for what comes next, opening branch offices in New York and Los Angeles. Even though Modern took a hit on its mostly vacant office tower at 470 Atlantic Avenue, last October it won a $10.9 million contract for renovations to the Pentagon.
67, chairman and cofounder, Analog Devices, Norwood
56, president and CEO, Analog Devices, Norwood
Even with the semiconductor industry in the soup, Stata and Fishman can spoon up profits. Granted, those profits were down 73 percent last year, but the stock price has climbed into the $40s after bottoming out at $29 in September. Analog's assets actually rose and its market cap jumped 11.4 percent to nearly $16 billion. Fidelity Investments likes Analog enough that it nearly doubled its stake to 10.2 percent. And next year MIT will open the Frank Gehry-designed Ray and Maria Stata Center.
65, chairman, International Data Group, Boston
42, CEO and president, International Data Group, Boston
McGovern built IDG into a high-tech media and research giant with $3 billion in revenues Â— which made him an estimated $2 billion Â— but Conlin has been driving things lately. His expansion initiatives and push into the emerging bio-IT market have helped balance the drop in ad revenues at IDG's 300-plus titles, which include CIO and PCWorld. And though the employee stock plan reportedly dropped 47 percent in the past year, IDG is still on Fortune's list of the 100 best companies to work for.
53, executive chairman, Staples, Framingham
46, president and CEO, Staples, Framingham
Stemberg didn't get the Red Sox, but Staples has come out of its slump. After a year of shrinking profits, it is refocusing on its core customers: small businesses. Net income leaped from $59.7 million to $265 million last year, and the stock has returned to its pre-September 11 price. Sargent ascended to CEO in February, though Stemberg will be around when he's not helping out buddy Mitt Romney; Stemberg backed Romney's losing senatorial bid in 1994.
47, Chairman of the Board, CMGI, Andover
The Internet giveth, and the Internet taketh away. In early 2000, Wetherell was still a Wall Street darling: His conglomerate had more than 60 investment properties and a stock in the $160 range. Wetherell himself was the 4.9-billion-dollar man. But a $5.4 billion net loss has a way of changing things. CMGI's stock has been dropped from the Nasdaq 100 and is hovering at a buck and a half, and Wetherell's CMGI holdings have been shredded. In a gesture, he cut his own salary to $1. Throw in the $120 million name game at CMGI Field, and Wetherell's displacement as CEO this past March isn't that surprising. It gets worse: Last spring his $22.5 million private jet was forced to make two separate emergency landings.
Gururaj “Desh” Deshpande
51, chairman, Sycamore Networks, Chelmsford
52, president and CEO, Sycamore Networks, Chelmsford
Few have ridden the economic sine wave like Sycamore cofounders Deshpande and Smith. After the optical-networking innovator's stock price reached $189, each was worth an estimated $7 billion. But then the company lost more than $500 million, the stock price fell to $4, and about a quarter of the staff was laid off. Now, both are worth less than $700 million, which is still enough for Deshpande to easily fulfill his $20 million gift for MIT's new Deshpande Center for Technological Innovation.
50, chairman and CEO, Polaroid, Cambridge
A picture may say a thousand words, but these days a Polaroid says one: bankruptcy. In July 1997, the stock peaked at $60.25, which brought smiles to its employees, who were part of the company's employee stock ownership plan. But after personally making $5.7 million in 2000, DiCamillo watched Polaroid collapse in 2001, laying off more than 25 percent of its workforce and sinking under nearly $1 billion in debt. The stock price plunged, and in October, once-proud Polaroid filed for Chapter 11 protection. And those employees Â— many of whom were depending on their Polaroid holdings for their retirements Â— were left with stock worth an average of less than 10 cents per share.
L. Dennis Kozlowski
55, Chairman and CEO, Tyco International, Exeter, New Hampshire
After building Tyco into a $97 billion General Electric-like conglomerate (while reportedly earning $279 million over the past two years) Kozlowski finally hit the wall. In January, with the company carrying $11 billion in debt, he announced plans to split Tyco into separate companies, hoping to attract more investors. “I want to build wealth, not an empire,” Kozlowski said. Truer words were never spoken: Between July 1999 and February, he sold $330 million worth of Tyco stock. Over the same period, the stock price fell 40 percent. In January, Kozlowski bought half a million shares in an effort to boost the price. In February, Tyco announced 1,000 more layoffs.
52, chairman and CEO, ACT Manufacturing, Hudson
ACT Manufacturing is the electronics-manufacturing equivalent of MC Hammer Â— topping the charts one day, bankrupt the next. After landing at number 6 on last year's “Globe 100″ with sales of nearly $1.4 billion, ACT filed for Chapter 11 protection in December, $387.4 million in debt. Over the course of last year, nearly half the employees (3,800) were laid off. At the end of January, the Nasdaq de-listed the stock, which was at 35 cents only 16 months after peaking at $71.38. Even so, Pino, who took the company public in 1995, will get up to $175,000 in bonuses just to stick around.
C. Edward Baker Jr.
51, chairman and CEO, Arch Wireless, Westborough
The e-boom's growth-over-profits mantra sounded loudly at Arch, a two-way paging provider: It bought MobileMedia in 1999 for $500 million and completed a $1.5 billion merger with Paging Network the next year, while posting $595.4 million in losses for the two years combined. By December, pagers were losing out to cell phones, Motorola was pulling out of the paging business, and Arch was filing for bankruptcy protection Â— the ninth-largest telecom bankruptcy in U.S. history, with the company listing $2 billion in debt. Par for the bankruptcy course these days, Baker will reap $726,000 in his “key employee retention” bonus.
50, former CEO, Arthur D. Little, Cambridge
44, former CEO, Arthur D. Little, Cambridge
How does a firm with 116 years' experience advising companies how to succeed and $600 million-plus in revenues go bankrupt? Easy. Borrow $40 million and use it, at Lamadrid's urging, to spin off a high-tech unit with the hope of cashing in on an IPO just as the IPO market dries up. Then default on a loan. Then, under McNamara, secure another loan whose fees further cripple you. Finally, call it quits in February under the burden of $66 million in debt. Along the way, force your employees to hold onto ADL's privately traded stock and then default, à la Enron and Polaroid. Eventually, sell the pieces for a total of $96 million.
43, former ceo, Holland Mark Advertising, Boston
In 2000, Holland Mark created Citizens Bank's antimerger ads, which asked: “What's your bank doing for you?” The campaign struck a chord with people irked by the growing fleet of megabanks. By 2000, Holland Mark was the fourth-largest agency in town, with billings of $162 million. After its competitors were snapped up by mega-agencies, Holland Mark was New England's largest independent agency. But the down economy saw ad budgets slashed. In October following Polaroid's bankruptcy, Davis closed shop, citing, among other factors, Polaroid's unpaid bill of nearly half a million dollars.
55, chairman and CEO, American Tower, Boston
When a Wall Street analyst predicted in January that American Tower, which owns and operates communications towers nationwide, would file for bankruptcy within a year, Dodge naturally scoffed. But since appearing for the last three years on the Forbes list of best-paid CEOs, he has watched American Tower post more than $300 million in net losses for 2001 and the stock price slip from $41 to around $6. He doesn't seem too worried, personally, though: In March he pledged $300,000 to the Boston Renaissance Charter School, which adds to the million he gave in 1998.
31, cofounder, Zefer, Boston
38, cofounder, Zefer, Boston
Onetime startup stars Tjan and Ng epitomized the dotcom hype. Founded with $2 million and an award-winning plan, their e-consulting firm, Zefer, secured $168 million in funding between 1999 and 2001 Â— $68 million of it after the Nasdaq plummeted. The company grew to about 800 employees, and Tjan became the brash mouthpiece of Internet how-to with a monthly column in Red Herring. But Zefer never turned a profit, and two IPO attempts failed. Layoffs began, and in September, the assets were sold, and Zefer disappeared without so much as a whimper.
38, cochairman, chief strategy officer, Art Technology Group, Cambridge
37, cochairman, chief technology officer, Art Technology Group, Cambridge
Singh and Chung turned $5,000 into an $8 billion company and became e-stars. ATG's stock price reached $122 in July 2000, and, at one point, Singh and Chung were worth more than $700 million each. Then the fuse blew. ATG posted a $156 million net loss last year, its stock sputtered, and 600 heads rolled. In October, Singh was replaced as CEO, and a shareholder group accused him and Chung Â— whose holdings are now worth around $12 million each Â— of making false statements and cashing in on the inflated stock price.
51, former chairman and CEO, Viant, Boston
E-consulting firm Viant fell as quickly as it climbed. Founded in 1996, Viant saw its stock quintuple just six months after the IPO, peaking at $118.88. The company turned a $1.4 million profit in 1999. And Gett's holdings were worth more than $200 million. But when the dotcom sector bombed, so too did Viant. Losses reached $72 million last year, the workforce was pared by 68 percent, and the stock fell to a little over a dollar. Finally, Viant was sold last month to Chicago-based Divine.
57,cofounder and chairman, Sonus Networks, Westford
47, cofounder and cto, Sonus Networks, Westford
44, president and CEO, Sonus Networks, Westford
Conceived by “serial entrepreneur” Gruber over a pizza and cofounded with Hluchyj in 1997, switchmaker Sonus rode the bucking '90s tech boom like a hardened cowhand. Ahmed was hired in 1998. In 2000 the stock jumped to $261 only 71 days after debuting at $23. The company actually wrangled quarterly profits (before charges and options) through the dark days of late 2000 and early 2001. That all changed in late 2001. By year's end, Sonus had laid off 21 percent of its employees and announced $645.4 million in losses. Its stock price now languishes around $3.
55, CEO and chairman, Raytheon, Lexington
You'd think a war would mean a windfall for a defense contractor. But in the “new era,” as Burnham has called the post-September 11 world, Raytheon has a way to go. It posted a $791 million loss for 2001 and still carries $7 billion in debt. Last year, Northrop Grumman displaced it as the third largest defense contractor. After years of selling off assets to try and lower that debt Â— most recently, the aircraft modification unit for $1.13 billion Â— Burnham announced in January a desire to begin acquiring again.
35, cochairman, co-CEO, and cofounder, Sapient, Cambridge
J. Stuart Moore
39, cochairman, co-CEO, and cofounder, Sapient, Cambridge
Greenberg and Moore seem to do everything together Â— start a company, share an office, give to charity. They have also now shared the experience of relinquishing billionaire status, dropping to the mere $225-mil-or-so range. Unlike most e-companies, Sapient was profitable Â— until last year, when it reported a $189.8 mill