Last October William D. Perez, 59, broke 115 years of tradition when he was elected president and CEO of Wm. Wrigley & Company. Mr. Perez is the first non-family member ever to head the public but closely held $4 billion company that makes popular brands such as Altoids, Doublemint, Life Savers, and Big Red.
The promotion is a fine accomplishment for Mr. Perez and Wrigley, which ranks number 482 on the Fortune 500, but it could be expected. Mr. Perez earned it.
In this issue, Hispanic Business celebrates its Corporate Elite, and leading the charge are these five men, all CEOs of Fortune 500 companies or the dominant arm of a Fortune 500 company. The members of this quintet are winners in the ultimate reality series, The Battle for the Corner Office, and some are not only CEOs but also stand at the pinnacle of their industries.
These officers may differ in age, sector, background, and country of origin, but they have several traits in common. In general, they are aware of the disconnect between Corporate America's desire to diversify and the demographic and educational issues in the Hispanic community that slow advancement.
More specifically, each leader is grappling with how to respond to formidable change in his company, industry, or both.
Big shoes to fill
The original power trio of Hispanic CEOs left big footprints, but only three sets of them. The pioneers were current U.S. Secretary of Commerce Carlos Gutierrez, who ran Kellogg's; Sol Trujillo, who leads Australia's Telstra now and was the chief of U.S. West; and the late Roberto Goizueta, the former chief of global giant Coca-Cola.
Now, Dr. Harry Pachon, president of the Tomas Rivera Policy Institute, says, "The representation of Hispanics at these high levels in Corporate America parallels their rise in the political sphere. Quietly, and without much fanfare, Hispanics are penetrating all aspects of U.S. society and making history."
Such as our Corporate Elite. The head of a medical services company ramps up for a demographic wave of patients to crash at his doors. A CEO with a scientific background must successfully restructure a century-old company into a modern marvel or face dire consequences. The chief of the domestic division of the nation's second-largest company has to polish its image and bolster its stock. And the leader of a once public company finds out that his private equity owners are more demanding than the shareholders were.
When it comes to turning a corporate trifecta as a CEO, Wrigley's new chief, Mr. Perez, sets the standard.
Prior to his new post, he was Nike's CEO for a tumultuous 13 months. Mr. Perez, who was born in Ohio but grew up in Colombia, fits Wrigley's global vision. Before selling athletic wear, he spent 34 years with SC Johnson, running divisions in Spain, Latin America, and North America while working his way up to CEO.
Last December, when Mr. Perez was told that analysts are cheering Wrigley's sales, income, and stock price, he responded quickly. That, he said, "is a nice problem to have. I am still learning about the confectionery business, but I know great brands and great people when I see them – and Wrigley has lots of both."
He is also confident that corporations are focusing on the burgeoning Hispanic marketplace and foresees an "increased investment against that demographic segment, increased need for people who possess Spanish-language skills to help manage it, and additional job opportunities."
Some observers see more of a plus-minus relationship. In 2007, Hispanic purchasing power will reach $875.5 billion, which represents 9.7 percent of the toal U.S. purchasing power, according to HispanTelligence(r). Corporations take notice when that much money is in play.
But buying power has yet to equal greater corporate power. The National Society of Hispanic MBA reports that Hispanics hold approximately 4.5 percent of managerial jobs; the Hispanic Association on Corporate Responsibility says that less than 1.7 percent of corporate board seats are occupied by Hispanics.
High visibility comes with the territory at Wal-Mart. And Eduardo Castro-Wright, 51, who became CEO of Wal-Mart's U.S. stores division last September, has it.
But the spotlight is hot as Mr. Castro-Wright must refurbish Wal-Mart's tarnished domestic image, successfully take some stores upscale, profitably target ethnic shoppers – also known as Hispanics and African Americans – and reverse the company's trailing sales performance compared to Target. If all that occurs, shareholders in the Fortune 500's No. 2 company may also see a spike in Wal-Mart stock, which has languished for five years.
These are tall tasks for the ex-chief of Wal-Mart's profitable Mexican operations. The native of Ecuador now controls 3,300 U.S. stores [which also have more than 150,000 Hispanic employees and contracts with 750 Hispanic suppliers worth $1.1 billion dollars].
It's too early to say how Mr. Castro-Wright is doing. But more than a bonus is at stake. Some observers think he could be a successor to CEO Lee Scott if Wal-Mart USA turns around.
There are no ifs, ands, or buts with Crístobal Conde, 46. He is one busy and happy CEO. Why? Imagine that your company controls the back-office processing that keeps transactions for the leading banks, governments, and stock exchange, among other entities, flowing. Plus, you provide essential if invisible IT, business, and professional services for more than 25,000 customers across 50 countries.
Chilean-born Mr. Conde does that, and this expertise supports a revenue stream to SunGard that BusinessWeek said is like "water from a hose." That's why Silver Lake Partners, a private equity group, paid $11.3 billion to take SunGard private in 2005. That year, the Wayne, Pennsylvania company, which no longer has to post earnings publicly, had revenues of $3.6 billion and net income of $454 million.
Silver Lake money has increased staffing from 10,000 to 16,000 and raised new product launches from 10 per year to 53 in 2006. But, the CEO says, "The firms that own us are tough masters. If we are free from the quarterly review, that is only because we work for the private firms on a monthly basis now."
If Mr. Conde has one worry, it is that not enough Hispanics are entering the IT sector. But he is optimistic that the pace will pick up, he says, as corporations understand that Hispanics "bring a different dimension to the debate and have the ability to cross cultures and languages in a way that adds real value."
Retention, not just promotion
Maria de los Angeles Crummett, the dean of International Affairs at the University of South Florida, says that enticing Hispanic customers is not enough. Corporations must find, hire, retain, and promote individuals, she says, such as those in the Corporate Elite, or others such as COOs Richard A. Gonzalez at Abbott Labs and Ralph Alvarez at McDonald's. "Once they are in, the newcomers can work themselves up the corporate ladder, not because they are Hispanic, but because they are there, capable, and able to make a positive difference."
In 2006, Paul Diaz, the CEO of Kindred Healthcare, Inc., a $4.3 billion comprehensive health care service company, began ensuring that some Hispanic students will be ready for Corporate America. That year, the Georgetown University Law School graduate, who worked while holding a full law school schedule, set up a scholarship fund at Georgetown Law for students with financial needs and to promote ethnic diversity.
Mr. Diaz also takes an active role is shaping Kindred, No. 498 on the Fortune 500. And he better – as the nation's 77 million baby boomers age, their need and their demand for health care services will soar.
The Louisville, Kentucky company is a colossus with 500 locations and 6,300 beds in 39 states. Facilities include long-term acute care hospitals, award-winning nursing centers, institutional pharmacies, and a contract rehabilitation services business.
Prior to becoming a part of Kindred, Mr. Diaz, who is originally from Florida, worked as EVP and COO of Mariner Health as well as CEO, CFO, and general counsel of Allegis Health Services. His total compensation in 2005 was $6.5 million.
The member of the Corporate Elite with the most difficult assignment is Antonio M. Perez, 61. Thus far, the chairman and CEO of $14 billion Eastman Kodak Co. has received mixed reviews as he tries to transform the venerable film-based company that started in the 19th century into a profitable 21st century digital film, digital camera, and digital publishing dynamo.
On paper, Mr. Perez is the man to make the change. After all, as head of Hewlett-Packard's consumer division he led its foray into digital media and electronic publishing. Today, he engages in close combat with H-P, another bricks-and-mortar firm, for the lead in digital printing while Shutterfly, the online digital photofinisher, tries to vault over both of them.
Mr. Perez, who promises profitability by 2008, also faces a revolt from investors who have beaten down the company's share price while stock analysts signal hold not buy. At the end of 2006's third quarter, sales had fallen and Kodak, No. 155 on the Fortune 500, posted its eighth straight quarterly loss.
Yet there is also praise. Mr. Perez, who studied electronic engineering in his native Spain, has won investor kudos for firing 25,000 workers and investing heavily in digital photography. Kodak's digital cameras get solid reviews, and the company has won multiple awards for employee diversity during his tenure.
But some observers wonder if Mr. Perez, whose 2005 total compensation was $6.9 million, will be allowed to complete the restructuring or be replaced by a "new media" CEO. Those developments remain to be seen.
Lourdes M. Hassler, CEO of the National Society of Hispanic MBAs considers the Corporate Elite inspirational even if bloodied in corporate battle. Her group's goal is to transform Hispanics from simply being seen as consumers into employers, too. But to do that the percentage of senior-level execs must surge. Currently, only 4 percent of all MBA holders are Hispanic.
Ms. Hassler, who holds an executive MBA from Texas Christian University, says, "I see the Corporate Elite as the heartbeat of our future leaders. These role models show how we will be able to positively change the number of Hispanic high school, college, and MBA students [and graduates]."
Wrigley's William Perez agrees – especially with 40 percent of the Hispanic population under age 20. When children see "Hispanic leaders at the top of their game," he says, "I would hope that they will realize that a combination of education and hard work can open doors to a multitude of opportunities."
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