2016

Stories related to "Energy".

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Of Like Minds in the C-Suite

When an organization’s CEO and CFO both hail from Booth, there’s a common methodology to problem solving that cuts to the chase. In a fast-moving environment, according to Byron David Trott, AB ’81, MBA,’82, founder, chairman, and CEO of BDT & Company, applying “the same disciplined approach” as his Booth-trained CFO Mike Burns, ’03, speeds decision making and removes unnecessary drama from the equation. This doesn’t mean that they always agree—far from it. Maria Kim, ’12 (XP-81), CEO of Chicago-based the Cara Program, describes her CFO Carla Denison-Bickett, ’04, as “a healthy agitator.” But in many ways, the open debate leads to increased dynamism that infects the entire leadership team. At BDT & Company in Chicago and Oaktree Capital Management in Los Angeles, the CFOs were the first and most significant external hires by the founding CEOs—and the pairs are still together. At Oaktree, it’s been 20 years as a team for CEO Howard Marks, ’69, and David Kirchheimer, ’78. Kim and Denison-Bickett have led nonprofit the Cara Program for the past year, but previously worked at the organization

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Power Sources

The Challenge: In 1999, Ted Brandt cofounded Marathon Capital in Bannockburn, Illinois, a $25 million investment bank focused on renewable energy. The original compensation structure hewed to the industry norm of a steady balance between salary and bonus, based on both individual and company performance. But in the first several years, Marathon was short of capital and the model was unsustainable. How could the company devise a system of incentives while maintaining the necessary cash flow to sustain the business, Brandt wondered. The Strategy: For the next three years, Marathon slashed salaries and paid bankers big bonuses when deals closed. Revenues grew, but that led to new challenges. This “eat-what-you-kill” model, as Brandt calls it, discouraged teamwork and was unfair to younger bankers who had no say in what projects to join. Also, by paying out bonuses before fixed costs, Marathon had few profits. Compensation ran about 90 to 95 percent of revenues. In comparison, similar banks