““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
An Uh-Oh Moment
If you’re a journalist, it helps to know how to write. But sometimes, nothing matters more than doing your research.
Case in point: some time ago, we began planning a Q&A for BJT’s Center Stage feature with an entrepreneur who appeared to offer a classic rags-to-riches story. We read that he’d grown up in a family of modest means, learned good values from his father and started his first business when he was in his 20s. By the time he hit 30, he headed a thriving company; and now, nearly 40 years later, his holdings included numerous businesses around the U.S.—not to mention literally dozens of cars and yachts. He also owned a capacious, recently refurbished business jet that he was thinking of trading in for an even larger one, to make it easier for him to oversee international operations of a retail chain he’d founded.
After interviewing him aboard his current jet—which was parked alongside his $200,000 Rolls Royce—our reporter confirmed that we had the makings of a fascinating piece. As the writer later proclaimed in the introduction to his manuscript, the subject is “the very embodiment of the American dream, a modern-day Horatio Alger who, from a blue-collar childhood, has built a business empire.”
How had he done it? He told our writer that his family had taught him that “when you are true to your word and good and loyal to those around you, nothing can prevent you from achieving your dreams.” He added that “constant hard work and unwavering generosity leads to success,” and, indeed, he gave munificently to several charities. One gift to a school reportedly totaled $1 million.
The story seemed inspiring, and yet certain aspects of it raised red flags for me. Where had he gotten the money to launch his first business? Why hadn’t he wanted the interviewer to discuss certain topics? How had he lost close relatives in two fiery car crashes in the space of just a few years? I had more questions than answers.
Fortunately, I also had Google. First, it led me to the interviewee’s own website, which touted him on the home page as a family man, entrepreneur and philanthropist. It contained information on his businesses and charities and links to articles about his gargantuan primary yacht. Another site estimated his net worth at $75 million while another showed photos of him with his attractive longtime girlfriend. Still another featured aerial views of his waterfront mansion.
But then, just as I was about to stop surfing and start editing, I discovered additional accounts that muddied the narrative. One described our interviewee as one of his state’s richest hoodlums and a longtime member of the Colombo crime family. It also mentioned felony convictions for gun possession and attempted grand larceny, his alleged role in intra-family Mafia wars and jail meetings with mob superiors. Further digging turned up court records suggesting that he wanted to get a rival-family member killed.
I also saw that the interviewee has consistently denied any Mafia ties. Still, the Horatio Alger image faded fast. And speaking of killing, we killed the story.
In journalism, it pays to check your facts. Then check ’em some more.