Fixing Our Broken Economy

SPRING/SUMMER 2009

the Alumni Magazine of NYU Stern STERNbusiness FIXING OUR BROKEN ECONOMY Stern confronts the financial crisis by creating a set of recommendations for policymakers, a book published in March, and an “instant” MBA course

Berkley Center is 25 Years Young ■ Managing Barcelona ■ What Would Hamilton Do? ■ Boeing, GE, and the Economy ■ Fond Memories of Trinity Place ■ Dean Cooley Reflects on the School a letter fro m the dean

A year ago, few could Our faculty were highly motivated to process what have imagined how far off was happening in the global economy and transform course the economy would their insight into valuable classroom lessons. It quick- veer these past eight ly became clear to me that Stern could make a con- months. Our last cover tribution beyond the classroom. Thus commenced story called for a new what we initially called the White Papers Project. The understanding of risk. In 18 white papers were hand-bound and distributed to this issue, the economy Washington policymakers in December. In March, takes center stage again. they were published under the title Restoring It’s fair to say that over the past eight months, what Financial Stability: How to Restore a Failed System went wrong, why, and what can be done about it were (Wiley, 2009). The collection was written by 33 the focus of most of our seminars, conferences, guest finance and economics faculty and ably edited by speakers, and faculty, particularly of finance and eco- finance professors Matt Richardson and Viral nomics. For the NYU Stern community, there’s been Acharya. An account of this collective achievement is nothing more riveting – or engaging. on page 22. We were fortunate to welcome another distin- As the recession drags on, some economists believe guished roster of guest speakers. The academic year that innovation will help lead us out of it. This gives kicked off with a chat with John Paulson (BS ’78), extra impetus to our celebration of the 25th anniver- founder and president of leading hedge fund group sary of the NYU Stern Berkley Center for Paulson & Co. As of September, he figured the econ- Entrepreneurial Studies (page 13). More and more omy was already in the sixth inning of a crisis double students are finding their way to the Center, partici- header (page 2). Jeff Immelt, chairman and CEO of pating in its programs and business plan competitions GE, joined us in October for a GE Live event, talking and finding inspiration, whether in entrepreneurship not just to a Stern audience but simultaneously to six in general, or in social entrepreneurship in particular, other business school audiences around the world. as evidenced by the crowd at the Fifth Annual Satter His description of how GE planned to navigate in the Conference on entrepreneurship in November (page year ahead made it clear just how challenging it is to 6). Stern is unique in developing a methodology for steer a diverse giant in such difficult times (page 4). teaching entrepreneurship, and we have economics Jim McNerney, chairman, president, and CEO of professor William Baumol, the Berkley Center’s aca- Boeing, discussed how Boeing is proceeding to fly demic director, to thank for that. through the turbulence (page 26). As you may know, I shall be stepping down as Banking issues were the subject of our faculty dean after this academic year to return to teaching research in this issue. Credit cards caught marketing and other projects (page 18). These seven years have professor Priya Raghubir’s attention as she researched been a very rewarding period of growth for the School why consumers prefer to use just about anything to and personal growth for me. It has been my privilege pay for purchases as long it’s not cash (page 30). to serve the School and to work with such an involved Economics professor Richard Sylla looked into how and supportive alumni body, and I am grateful to Alexander Hamilton handled a couple of bank crises, have had the opportunity. I hope I get the chance to with some startling parallels to today (page 34). As speak with each of you in June at the Global Alumni for the banking industry, this was a period of rapid Conference in Barcelona. You can get a glimpse into and jarring consolidation. Charlie Scharf (MBA ’91), what awaits you by reading this issue’s interview CEO of retail financial services for JPMorgan Chase, with Andreu Puig Sabanes (MBA ’91), general man- was in the thick of it, charged with integrating WaMu ager of Barcelona (page 12). into Chase after their merger (page 8).

Thomas F. Cooley Dean STERNbusiness A publication of New York University Stern School of Business contents SPRING/SUMMER 2009 President, New York University John E. Sexton 2 Public Offerings John Paulson talks about winning in a losing market; the Stern community Dean, NYU Stern School of Business fêtes Dean Emeritus Abe Gitlow as he turns 90; experts discuss the future of the Thomas F. Cooley economy; GE’s Jeff Immelt is interviewed by Maria Bartiromo; experts in a three-part series advise President Obama; social entrepreneurs measure impact; Wall Streeters Vice Dean and Dean of the discuss the future of M&A; accounting gurus weigh the mark-to-market proposition Undergraduate College 8 Stern in the City Sally Blount 8 Charlie Scharf of JPMorgan Chase takes a modest approach to a huge job, By Marilyn Harris Chairman, Board of Overseers 10 Les Morgenstein’s Alloy Entertainment goes to town with the Gossip Girl William R. Berkley franchise, By Jenny Owen Chairman Emeritus, Board of Overseers 12 He’s COO of One of the World’s Great Cities Henry Kaufman 8 questions for Andreu Puig Sabanes Chief Marketing Officer 13 Special Feature – “Innovating Around Innovation” Beth Murray As the Berkley Center for Entrepreneurship celebrates its 25th anniversary, it is incubating startups, providing mentors, producing a methodology for teaching entrepreneurship, and inspiring more students, By Marilyn Harris Associate Dean, Marketing and External Relations 18 A Stronger Stern Joanne Hvala A Q&A with Dean Thomas F. Cooley Editor, STERNbusiness 22 Cover Story – How to Fix the Broken Economy Marilyn Harris Stern confronts the financial crisis by creating a set of recommendations for policymakers, a book published in March, and an “instant” MBA course Managing Editors, STERNbusiness Rika Nazem and Jenny Owen 26 Leading Indicators Stern’s CEO Series: Boeing’s Jim McNerney holds forth on the financial crisis, Contributing Writers free trade, oil prices, labor unions, and the green economy Kelly Freidenfelds, Keith Layton, 28 Prospectus Jessica Neville, Angela Parks, Faculty awards, honors, and noteworthy papers Carolyn Ritter, and Joey Schmit

Office Hours – Faculty Research Contributing Photographers Don Pollard and Anne Marie Poyo Furlong 30 Monopoly Money Consumers prefer to use a credit card, or any form of scrip, to paying with cash, Illustrations By Priya Raghubir and Joydeep Srivastava Gordon Studer 34 Another Great Depression? Christophe Vorlet Just after the nation’s founding, Alexander Hamilton took on a banking crisis with eerie parallels to today’s, By Richard Sylla Design Anne Sliwinski 38 Peer to Peer Student Life in Washington Square and Beyond: Designing a new-media marketing plan to recruit priests; finance, accounting, and rock ’n’ roll make for an Letters to the Editor may be sent to: award-winning combination NYU Stern School of Business 40 Alumni Affairs Office of Public Affairs Alumni News and Events: Networking opportunities; Alumni Day; scholarship 44 West Fourth Street, Suite 10-160 money at work; webcasts of panels, speakers, and workshops New York, NY 10012 www.stern.nyu.edu 44 Class Notes [email protected] 52 Past Performance Trinity Place, former home of NYU’s graduate business school, is remembered fondly as a building with few frills and lots of character, By Marilyn Harris Public Offerings

WINNING IN A LOSING MARKET: A CHAT WITH FINANCIER JOHN PAULSON NYU Stern alumnus John Paulson that most of the companies com- (BS ’78), the founder and president plaining about short-selling are of Paulson & Co., a leading hedge about to fail. He said hedge funds fund firm, spoke in September to an exist because they can show posi- audience of more than 400 Stern tive returns in all markets, adding students and alumni during a Chats that short-selling can produce pos- with Financiers event. The Chats itive returns in declining markets. with Financiers Series brings togeth- Paulson Funds were among the er academics and luminaries in the highest-performing funds in 2007 finance industry for discussions on and were awarded the Arbitrage personal experiences and current Fund of the Year, Best New Fund trends in finance. of the Year, and Management Firm Edward Altman, Max L. Heine of the Year by Absolute Return magazine. Edward Altman (left) interviewed John Paulson about his firm’s Professor of Finance, interviewed recent success in short-selling subprime credit. The conversation continued fol- Paulson about his firm’s recent her- lowing the event, as Paulson joined alded success in short-selling subprime credit. Paulson more than 35 invited NYU Stern alumni at the Union said that his investment strategies are two-fold: event- Square W Hotel for an After Market Hours event, one of driven arbitrage and distressed and bankruptcy investing. a series hosted by NYU Stern’s Dean’s Executive Board Reacting to the US Securities and Exchange Commission’s that showcases successful alumni and their diverse and recent, temporary ban on the short-selling of 87 specific creative careers. There he predicted that the financial cri- stocks, Paulson said that while he shared regulators’ consis would spread to Main Street in 2009 and noted that cerns about naked short-selling, he wouldn’t blame short- European markets, which tend to lag the US by approxi- selling for the market’s decline. He argued that only 4 mately six months, wouldn’t be far behind. “We’re in the percent of the market’s outstanding shares are short and sixth inning of a double header,” he said.

THE FUTURE OF INTELLECTUAL DIVERSITY: A 90TH BIRTHDAY GALA FOR DEAN EMERITUS ABRAHAM GITLOW “Today, when have been to his students and the human being has the capacity to you tell someone extent of his impact on the Stern com- become an innovator through educa- you’re from munity. tion and empowerment,” he said. Stern, there is a Dean Thomas F. Cooley welcomed Gitlow joined the faculty of the nod of recogni- guests, acknowledging the presence of School of Commerce, Accounts, and tion, a slight lift- former Deans Frederic Choi, Daniel Finance, as Stern’s Undergraduate ing of the eye- Diamond, and William Dill. “Every College was then known, in 1947. brows – you get dean should be so lucky to have such He served as Dean of NYU Stern from respect,” said distinguished predecessors,” said 1965 to 1985, playing a significant Professor and Dean Cooley. “Abe Gitlow’s life and role in the School’s rapid evolution Dean Emeritus work at Stern has been as steady and from a local school of opportunity to Abraham Gitlow constant as the stock market has been an internationally renowned institu- at his birthday Abe Gitlow (center) celebrates his 90th birthday with Dean Thomas F. Cooley volatile – it is nice to have points of tion. celebration in (left) and William Berkley at the annual Board of Overseers dinner. constancy in times like these.” Gitlow spoke fondly of his 60 October. Regis Hotel in New York City to pay William R. Berkley (BS ’66), chair- years at the School, lauding the suc- It isn’t often that the Stern com- homage to Gitlow’s heritage of life- man of the Board of Overseers, noted cess of Stern’s gifted faculty in teach- munity has the opportunity to cele- long education. The evening featured that Gitlow always demanded “more ing, preparing, and training the gener- brate the 90th birthday of an esteemed keynote remarks on the future of than the given standards,” and that ations of Stern students who now member of its faculty – and the School intellectual diversity by Vijay thanks in part to his persistence and comprise its distinguished alumni chose the annual Board of Overseers Vaitheeswaran, award-winning corre- implementation, Stern is now posi- network. The School, he said, needs dinner as the occasion to do so. More spondent for The Economist and tioned at the forefront of global busi- support now more than ever: “In my than 150 members of the Board of executive-in-residence at NYU Stern. ness education. Vaitheeswaran nine decades, I have learned this – Overseers and Dean’s Executive Board, The energy in the room conveyed observed that intellectual capital con- giving is good. It comes back, even as well as alumni, faculty, friends, and how meaningful Professor Gitlow’s sists of innovation, the catalyst for multiplied, years later, and validates a administrators, gathered at the St. leadership, teaching, and research change and diversity in thought. “Every life well spent.”

2 Sternbusiness WHAT THE FUTURE HOLDS: EXPERTS HOLD FORTH AT MARKET PULSE EVENT As the Dow hit record lows, consumer confidence continued to wane, and the Fed crafted plans to stave off a Depression- like era, Dean Thomas F. Cooley moderated a discussion in October with industry, media, and academic thought leaders to analyze and offer solutions for the current financial crisis. The event was part of NYU Stern’s Market Pulse Series, introduced in fall 2007 by Dean Cooley to tackle pressing global issues affecting business and society. The panel included Dennis Berman, The Wall Street Journal deputy bureau chief for money and investing; Mark Patterson (MBA ’86), chairman and co-founder of MatlinPatterson Global Advisors LLC; Nouriel Top: (from left to right) Dean Thomas F. Cooley, Dennis Berman, Nouriel Roubini, Roubini, Stern professor of Mark Patterson, and Lawrence White analyzed economics and international and offered solutions for the financial crisis. business; and Professor Lawrence White, deputy chair of Stern’s economics department and former member of the Federal Loan Home Bank insured funds, as well as the unregulated market for Board. credit default swaps. With the 23 percent job loss experienced during the Nicknamed “Dr. Doom” for the nature of his econom- Great Depression as a reference point, Dean Cooley said ic forecasts, Roubini opined that the US is in its worst we are a long way from that point. To reinstill confidence financial crisis since the Great Depression and that the in the markets, he stated, the government would need to country was entering a prolonged recession that could establish the level of predictability and consistency that last about 24 months. Alexander Hamilton prescribed. According to White, “It’s all about leverage.” When Berman said presciently that the infusion of capital into the technology bubble burst and stock market value the market would not cover the auto industry, adding that decreased by $7.5 trillion between December 1999 and banks and the economy have not begun to process what 2002, the financial sector handled it, he pointed out. will happen with credit card debt and auto lending. He The losses were absorbed, mainly by households, in non- suggested that Wall Streeters are out of touch, and along leveraged forms such as mutual funds, pension funds, with Washington insiders, exist in a bubble. and 401Ks. Today, the $4 trillion to $6 trillion loss in According to Patterson, with the Fed’s bailout, all tax- housing value will again be absorbed mostly by house- payers are now distressed investors. Patterson argued that holds, but because mortgages are so highly leveraged, the government has been negligent on regulation – “asleep there will be spillover into the financial sector, which, at the switch” – and that the government and banks have because of high leverage levels, cannot absorb it all. moved from “100 percent gullibility” to asking questions, Expect prolonged impact on future consumer spending but still not acting. He also expressed concern with the patterns, retirement, and overall consumption, White FDIC, which had just $43 billion to cover $4.5 trillion in predicted.

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GE CHAIRMAN AND CEO JEFF IMMELT DISCUSSES THE SHRINKING ECONOMY WITH CNBC ANCHOR MARIA BARTIROMO “I’ve already seen 20 things I never thought I’d see in a lifetime, and I’ve already done 10 things I never ADVISING OBAMA: STERN SERIES thought I’d have to do. And I’ve got the next 10 lined FOCUSES ON THE NEW up,” said Jeff Immelt, General Electric chairman and ADMINISTRATION CEO, in regard to the current financial turmoil. At NYU Stern in October for a GE Live event entitled, “Winning As President-elect Obama in Today’s Environment,” Immelt spoke to nearly 300 transitioned into the White House, Stern MBA students, as well as hundreds more at six experts from the Council on Foreign Relations, The Economist, and NYU Stern debated the other business schools across the globe – London current global financial crisis with a focus on ways to Business School, IESE in Spain, UVA-Darden, repair a broken economy. Entitled “Transition 2008: Thunderbird, UNC, and Emory – where the event was Advising America’s Next President,” the series of three broadcast live. Immelt was interviewed by NYU alumna events addressed global issues as they relate to the US and Trustee Maria Bartiromo, host and managing editor presidency. of CNBC’s “The Wall Street Journal Report with Maria The first event’s panel on fixing global finance Bartiromo,” as well as anchor of “Closing Bell with included Greg Ip, US economics editor at The Maria Bartiromo.” Economist; Brad Setser, fellow for geoeconomics at the Immelt described how GE is navigating the credit Council on Foreign Relations; and Roy Smith, Kenneth markets, investing in technology and alternative energy Langone Professor of Entrepreneurship and Finance at sources, and managing globalization. He said GE’s con- NYU Stern. The discussion was moderated by Thomas tinued financing of its infrastructure divisions will keep F. Cooley, Dean of NYU Stern and a macroeconomist. In the short term, Ip said, it is important to create a the company growing. “Government is going to want to formal legal authority by which the government can see business solve some big problems out there,” he stat- take over any company of systemic importance that is in ed. “And some of the big problems are infrastructure financial trouble and pay off creditors and wind the problems. It’s healthcare, it’s energy, it’s infrastructure. company down. In the long term, he suggested a stricter So the financing of these, and the technology that goes form of regulation, one that limits the risks that bank with them, is going to be one of the growth areas of the holding companies can take. future.” According to Setser, “Taxpayers have not realized The GE Live event was preceded by a breakfast that they are on the hook on the downside.” He noted where students had the opportunity to meet with NYU that the G7’s commitment that no systemically impor- Stern alumni now working at GE as well as other GE tant institution will fail puts taxpayers on the hook to executives and recruiters. bail them out. In his view, even with no taxpayer money on the line, banks should evaluate their capital before considering paying dividends. Regulators should be evaluating whether their equity capital could be better used to protect the taxpayer. Smith advised Obama to heal the real economy by cutting the budget so he can spend what’s needed to get things going; to intervene in the markets to get them flowing again; and not to bail out General Motors. “Let GM go bankrupt,” he said. Noting that the current regulatory system appears to have been suspended, Dean Cooley stressed the need to establish the rules of the game so that market players can know what to expect moving forward. He said it was important to include additional pieces in the regula- At an event broadcast live to six other business schools, Jeff Immelt was interviewed by Maria Bartiromo about how GE is navigating the credit markets, new technology, and globalization.

4 Sternbusiness tory architecture and to devise Above, left: Roy Smith (right) and better ways for firms to calcu- Dean Thomas F. Cooley discussed late risk. solutions for fixing global finance. The second event of the Above, right: (from left to right) series addressed how Obama’s Alexandra Starr, Michael Moran, Lane Greene, and Richard Sylla election may change the way addressed the future of American America leads, how the world leadership. views the US, and whether Left: Anna Szterenfeld and David American dominance is over. Backus debated US trade policy. Panelists were Michael Moran, executive editor of CFR.org; Lane Greene, international correspondent for the The Economist; and Richard Sylla, Henry Kaufman Professor was Jonathan Eaton, professor of economics at NYU. of the History of Financial Institutions and Markets and Alden advised a serious rethinking of the direction of professor of economics at Stern. The panel was moderated US trade policy and a strategic pause on the issue. For by Alexandra Starr, writer for Slate magazine and former 20 years, he noted, trade policy has focused on openness, political correspondent for BusinessWeek. but a new direction might be in order, particularly since Moran predicted that the US will not be “walking the there is a lack of support for the current US trade agen- walk” in terms of economics over the next two years, and da. Second, he said that during the “timeout” the US that there will be more “propping up” of industries and should “do no harm,” such as slapping tariffs on Chinese market interventions – the very actions the US condemned imports because of the value of the yuan. Finally, the US the French for doing post-WWII. While the economic cri- should refocus trade policy on the World Trade sis is global, Greene said the US has been targeted for Organization, which he considers underused, versus blame, specifically capitalism and American economic negotiating bilateral agreements, which he believes are ideas on how to organize economies. This perception politically controversial and less economically efficient. could lead to protectionism on the part of other countries Focusing on US-Latin America trade relations, and is likely to affect how the US talks about economic Szterenfeld said trade policy must be formed in the con- policy. text of a comprehensive agenda that includes other issues According to Sylla, “We’re moving back toward a pre- such as energy, poverty reduction, and debt relief. She 1914 world.” He added that the US will continue to lead argued that the trade embargo against Cuba should be because there isn’t a willing substitute. To be a good dismantled, and advised that the US engage and partner leader, he noted, the US should involve other countries in with Brazil, a powerhouse economy in the Western the discussion. Hemisphere and an important global player. The third event focused on trade policy. Panelists Backus said he was unsure if he’d urge Obama to included Edward Alden, Bernard L. Schwartz Senior make trade policy a primary issue. He explained that Fellow at the Council on Foreign Relations; Anna increased trade hasn’t produced huge gains, and that his Szterenfeld, Latin America editor, Economist Intelligence biggest fear would be stepping backwards with trade pol- Unit; and David Backus, Heinz Riehl Professor and chair icy, especially in light of the current economic climate. of the department of economics at Stern. The moderator

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MEASURING IMPACT: SOCIAL ENTREPRENEURS an effort to con- DISCUSS THE CHALLENGES struct more than 1,500 new play- More than 150 entrepreneurs, through the nonprofit grounds, skate investors, philanthropists, and academ- sector and the narrow parks, sports ics gathered in November for the Fifth philanthropist mindset on fields, and ice Annual NYU Stern Satter Conference of how to achieve social rinks across Social Entrepreneurs. “As the field of change. He cited evalua- North America. social entrepreneurship matures, meas- tion and social entrepre- Stern uring impact remains a significant neurship as the two keys Professor and challenge for most organizations,” said to unlocking the future of Academic NYU Stern Clinical Professor Jill the nonprofit sector. Director of the Kickul, the conference organizer and According to Jason Stewart Satter (right) presented Darrell Hammond with the Satter Social Entrepreneur Berkley Center director of the Stewart Satter Program Saul, founder and presi- of the Year Award. William Baumol in Social Entrepreneurship in Stern’s dent of Mission factor of Stern’s social enterprise pro- awarded the 2008 NYU Stern Social Berkley Center for Entrepreneurial Measurement LLC, the sector is gram and member of Stern’s Board of Entrepreneur Lifetime Achievement Studies. increasingly becoming a ‘social capi- Overseers, presented the NYU Stern Award to Bill Drayton, founder and Plenary keynote speaker Mark tal market’ in which organizations Satter Social Entrepreneur of the Year CEO of Ashoka, a global association Kramer, founder and director of FSG need to be focused on the outcomes Award to Darell Hammond, founder of the world’s leading social entre- Social Impact Advisors, said that the they produce and the measurement and CEO of KaBOOM! For the past 12 preneurs dedicated to advancing the failure of classical philanthropy can be that enables them to improve their years, Hammond’s organization has field of social entrepreneurship and attributed to the inaccurate perception impact. used an innovative model to join the citizen sector. that problems can only be solved Stewart Satter (MBA ’82), bene- business and local neighborhoods in

KEY WALL STREET PLAYERS DEBATE THE FUTURE OF Stephen Friedman, retired chairman of Goldman MERGERS AND ACQUISITIONS Sachs and current chairman of the Federal Reserve Bank of New York and of global private equity firm Three leading figures in the mergers and acquisitions Stone Point Capital; Martin Lipton, founding partner of field gathered at an NYU Pollack Center for Law & the law firm Wachtell, Lipton, Rosen & Katz; and Business event at the Law School in October to discuss Joseph Rice III, founder and chairman of private equity the future of M&A in the post-credit-bubble world firm Clayton Dubilier & Rice, served as panelists. The before an audience of law and Stern business students discussion was moderated by Brett Cole, a writer for and alumni. The Economist and author of M&A Titans: The Pioneers Who Shaped Wall Street’s Mergers and Acquisitions Industry. Reflecting on the current US economic turmoil, Rice named “human greed” as the cause and an abundance of capital as a catalyst. Friedman attributed the crisis, in part, to incentive structures that encouraged bad lending and faulty business practices. “People will play the way you pay them,” he said, including banks, consumers, and rating agencies in the circle of blame. Lipton predicted the crisis will last between three to five years, describing the evolution of a new financial order dominated by large banks surrounded by many small boutiques. “Capital raising will be in the hands of the big universal banks,” he said. “They will have the

(From left to right) Brett Cole, Stephen Friedman, Martin Lipton, and Joseph Rice debated capital and the networks to do it.” Panelists agreed that the future of M&A in the economic turmoil. M&A activity would eventually pick up.

6 Sternbusiness NORWEGIAN FINANCE MINISTRY’S THOMAS EKELI DELIVERS FOURTH ANNUAL HAITKIN LECTURE

At the Fourth Annual Haitkin Lecture, economist Thomas Ekeli, an investment director in the asset management department of the Norwegian Ministry of Finance, shared his experience managing Norway’s $400 billion petroleum fund. The fund is earmarked as the country’s pension fund and represents 10 percent of the $4 trillion global market for sovereign wealth funds. As the only major fund of its kind with an independent Council On Ethics, it is an international model of transparency and principled investing. According to Ekeli, the Thomas Ekeli spoke about his experience managing Norway’s $400 billion petroleum fund. fund was established to manage Norway’s oil wealth wisely, now and for future generations. He noted that for that its Council On Ethics deems ethically incompatible many countries, great mineral wealth leads to corruption, with its purpose and goals. political instability, and economic stagnation. He credits The Haitkin Lecture on Business Ethics, established the fund’s success to its strategic investment philosophy in 2004, is made possible through the generosity of and ethics: The fund only invests abroad, buys small Jeffrey M. Haitkin (BS ’68). The Lecture is dedicated to stakes in multiple companies as a universal investor, dis- supporting the continuing discourse on significant allows geopolitics as a driver of investment decisions, and emerging issues in business ethics, bringing a distin- chooses investments based on good corporate governance guished scholar to Stern annually to address timely and human rights, while screening out certain companies national and global issues.

PRACTITIONERS AND SCHOLARS DEBATE MARK-TO-MARKET ACCOUNTING (From left to right) John Biggs, Seymour Jones, and Stephen Ryan explored the economic impact of fair value accounting practices on the weak US economy.

accounting provides a good platform for both mandatory and voluntary dis- closure. Eli Bartov, Stern research professor of accounting, also supported fair value accounting, saying that the problems with implementation of FAS 157 are minimal and can be fixed. Professor James Ohlson, acting chair of Stern’s Nearly 60 academics, profession- Bloomberg, Columbia University, proponent of fair value accounting accounting department, pointed to a als, and journalists gathered in October NYU, PricewaterhouseCoopers, and practices, said, “The alternatives to disadvantage of fair value accounting: for an NYU Stern Ross Roundtable Standard & Poor’s, among others. fair value accounting are bad in illiq- “It’s very subjective, and it will oscillate exploring the economic impact of fair The debate was spirited and uid markets and not good in liquid with political environments.” Despite value, or mark-to-market, accounting informative. Seymour Jones, clinical markets.” He pointed to several bene- the continuing financial turmoil, Stern practices on the state of the US econo- professor of accounting at Stern, fits of fair value accounting, including Executive-in-Residence John Biggs, my. Participants in the event, hosted by questioned whether all the “distur- timeliness, its ability to self-correct, former chairman of TIAA-CREF, warned the Vincent C. Ross Institute of bance” in today’s financial markets and its capacity to account consis- against Congress’s setting accounting Accounting, represented the American was caused by fair value accounting. tently for matched positions. Addi- standards. Institute of Certified Public Accountants, Stern Professor Stephen Ryan, a tionally, he contended that fair value

Sternbusiness 7 sternInTheCity Fast Track to Success

By Marilyn Harris “chief.” In 1995, he became CFO of Smith Barney, after serving in a num- In 1987, barely out of college, ber of senior finance roles at various Charles “Charlie” Scharf was the Travelers Group companies, including youngest professional employee Commercial Credit, Primerica, and at Commercial Credit Corp., the Smith Barney. When Travelers merged venerable, if down-at-the-heels with Citicorp in 1998 – at which Baltimore consumer finance com- point Scharf was CFO of Salomon pany then run by Sandy Weill Smith Barney – he was named CFO of and Jamie Dimon. The first per- Citi’s global corporate and investment son the company had hired bank, which generated revenues of directly from college in years, $21 billion in 1999. In 2000, he was Scharf was in fact still a senior at CFO of Bank One, and in 2002, he Johns Hopkins University when led the bank’s consumer banking he started working there part- business, helping rebuild the brand time, having sent his résumé to and banking staff and expanding the Dimon through family connec- branch and ATM network. tions. The experience, Scharf Scharf became CEO of recalled recently, was a little JPMorgan Chase’s retail financial lonely. “I was younger than services upon its 2004 merger almost everybody else by 20 Charlie Scharf heads up JPMorgan Chase’s retail financial services. with Bank One. His operation – years,” he said. Upon reflection, including Washington Mutual noted the now 44-year-old executive, it was the best – comprises more than 5,000 bank branches and possible situation for a tyro: “My colleagues were sea- 13,000 ATMs, as well as relationships with more soned, and I got the benefit of their experience. That than 14,500 auto dealerships and 5,200 schools helped me mature in business faster.” Six months into and universities. the job he was named Dimon’s assistant and “included Among his current challenges is the post-merger in every meeting, learning broadly about business and integration of Washington Mutual, acquired how decisions get made.” His real-world education – by JPMorgan Chase in September 2008, and subsequent career – was well and truly launched. and, in this difficult economic period, it Scharf’s upward professional trajectory has never presents problems and tremendous oppor- faltered. Relied upon by Dimon, he has mastered a tunities. According to sequence of jobs whose titles usually started with

8 Sternbusiness Scharf’s purview includes 13,000 ATMs.

Scharf, “There was a lot of credit exposure there – $35 As much as Scharf has been mentored by the leading billion and maybe more in losses – but there is enough lights of his industry, he has developed a philosophy of cushion that it should be okay.” Last December, he and his own. In part, that was shaped by his Executive MBA Dimon flew to Seattle from Stern, which he with the bad news of “In my experience, good business completed in 1991 and, 9,200 layoffs over the is all about stepping back, he said, helped put his next year. “It was hard asking questions, and work experience into eliminating thousands of perspective. “In my jobs, but you have to do accumulating the expertise to experience,” he reflected, the right thing for the make the best decisions, whether “good business is all other employees,” he those are business decisions or about stepping back, said. “I think people asking questions, and think we treated them people decisions.” accumulating the expert- fairly.” The great oppor- ise to make the best tunity of the merger, he pointed out, is to create a truly decisions, whether those are business decisions or people national franchise, leapfrogging into states where decisions. Jamie says there’s a book on everyone and you JPMorgan Chase had lacked a retail presence. just need to read it. I would add that there’s always an Once the integration is complete, there is still the answer waiting to be found. You just need to do the work recession to get through. JPMorgan Chase has “done well and seek it out.” so far on a comparative basis,” said Scharf, “but there’s When he’s not working or contributing his expertise a long way to go.” Over the past two years, “there are a to the boards of the Lyric Opera of Chicago, the New lot of things we intentionally did not do, such as CDOs, York City Opera, and Guiding Eyes for the Blind, option ARMs, etc., and that’s left us in relatively better Scharf prefers spending time at home in Westchester, shape than some of our competitors.” He explained that New York, with his wife, Amy, and two daughters, who Dimon’s philosophy of running a financial company is to are active in plays and musicals. Tennis is his sport, plan as if the worst will happen and create what he calls and rock and blues guitar his passion – that and wood- a “fortress” balance sheet. When assuming risk, “we ask, working, which he said he finds “very soothing.” He’s ‘If we’re wrong, will we be okay?’” One of the keys to skilled enough to have made and installed the raised emerging whole from the current economic crisis is to paneling and bookshelves in a home library, and his “stay out of trouble and avoid the land mines,” he said. next project is a desk. With the mountain of profes- “We will get through this cycle, though there will be sional responsibilities facing him in the current bruis- fewer banks. People shouldn’t bet against the financial ing environment, finding the time to escape to his system in this country.” woodshop might be the toughest challenge of all. ■

Sternbusiness 9 sternInTheCity

Side, “Gossip Girl” was designated the “Best Gossip Girl’s Show Ever” in April 2008 by NY Magazine and the Teen Choice Governing Guy TV Show Drama of 2008. By Jenny Owen Gossip Girl has been a successful The last few years have accelerated to fever pitch model for Alloy for Les Morgenstein (MBA ’97). As president of Alloy Entertainment. Entertainment, he leads the entertainment brain trust The company’s behind a rapidly growing roster of hot largest busi- television shows and films, and a slew ness is books, of the most popular books for adoles- which include cent girls. In 2008 alone, the company the series The A- debuted the second season of “Gossip List, The Clique, The Luxe, Girl,” its hit television teen drama, and Pretty Little Liars, and that recently got its own spinoff, to often the company’s TV and some of the CW Network’s highest rat- film projects are based on ings ever; released the sequel to teen these literary properties. This girl flick “The Sisterhood of the strategy has helped the com- Traveling Pants” and two other movies pany make inroads into it produced; and launched a one-hour Hollywood, because its comedy “Privileged” on the movies or TV shows are CW Network. based on books that already Alloy Entertainment, have followings, and, there- a subsidiary of Alloy fore, potential “pre-sold” Media + Marketing, audiences. “The Gossip Girl doesn’t just produce books had sold five million “Gossip Girl,” it also copies by the time the show developed the epony- premiered,” said Morgenstein. mous best-selling novel At one point last summer, Alloy Entertainment had series by Cecily von nine books on The New York Times children’s best-seller Ziegesar that inspired list. The company is a book packager that crafts propos- the program. als for publishers and creates plotlines and characters Revolving before passing them to a writer or group of writers – around the in much the same way that dramas and sitcoms lives of are written for TV. A 2008 Forbes article prep-school reported that “a single Alloy book can gener- socialites ate multiple six-figure revenue streams: the growing up on New York City’s Les Morgenstein’s company, Alloy Entertainment, produces the Gossip Girl books and hit TV show, as well as a growing roster Upper East of popular creative content.

10 Sternbusiness and, recognizing our similar goals, then acquired 17th Street Productions.” With a background in both business and developing creative content, Morgenstein is appropriately positioned to lead Alloy Entertainment. “I had a very liberal arts background and discovered early on in my career that I was very entrepreneurial and wanted to run my own business, but I didn’t know anything about business,” From left to right: As a producer, Morgenstein was on the movie set of “The Clique” with novelist Lisi Harrison and TV talk-show host and former supermodel Tyra Banks, also a Morgenstein explained. “Much of that you learn on the producer of the film. fly, but fundamentals like accounting and finance, you initial book deal, plus a fee for selling the television can’t. That’s really why I went to Stern – and it’s been rights, a purchase price and a producer’s fee for the integral to what I do.” pilot, a per-episode rights fee and producer’s fee, and Morgenstein’s business competence has proven espe- a cut of the overall profits.” cially useful in helping Alloy Entertainment weather the “The secret, if there is one, is in the initial creative current economic turmoil. “The book business is down. process,” Morgenstein explained. “And as managers, Retail traffic is way down,” he explained. “It’s impacting we’re very diligent about what we do and what makes royalties we’re earning on our best sellers, and it’s impact- something a commercial concept that not only will ing what publishers are willing to pay for that next title as have the potential to be a hit, but also have the poten- they look at their businesses. And the advertising climate tial to be a hit with multiple titles that then transitions today compared to six months ago is very different. It’s to film or television or spin-offs with other opportuni- also harder to get a commitment from the TV networks. ties.” “Nevertheless, long-term, we’re in a very good position Morgenstein began working in publishing right because we create commercial intellectual property. after graduating from Sarah Lawrence College. He Whatever changes are made in the entertainment busi- worked for a company that packaged the Sweet Valley ness, however distribution evolves, it’s going to need great High teen books popular in the 1980s, while at the content,” he asserted. same time attended The City College of New York for Developing great content requires a strong creative a master’s degree in English and creative writing. Soon team, which Morgenstein noted, is best found in New after earning an MBA from NYU Stern, he bought the York City. His company’s New York location “has defi- company he worked for and renamed it 17th Street nitely impacted the type of talent we’re able to hire,” he Productions. “Around this time, which was the mid- to said. “We thrive on the creativity of our editorial staff and late-’90s, there was a demographic boom. Various New York attracts a very high caliber of young executives. pockets of teen media were really taking off: the WB I don’t think we would have experienced the same success was strong with ‘Dawson’s [Creek]’ and ‘Buffy [the had we been in an office park in New Jersey.” Vampire Slayer],’ Teen People had launched really There’s no dearth of content in Alloy Entertainment’s well, and boy bands like the Backstreet Boys were slate of offerings. It has about a dozen TV projects in huge, but publishing was not,” said Morgenstein. “So development with major networks, as well as a number of we identified some big shifts we wanted to make in kids’ movies and romantic comedies under way with top that business – primarily we wanted to become a com- film studios. It’s also doing new-media projects like Web- pany that was developing content. By the latter part of isodes. “We’re putting together a business model based on the ’90s, we formed a relationship with Alloy to pro- that,” said Morgenstein. “So there will be some business mote our books on their website and in their cata- model shifts, but at the heart of it, we’ll continue to do logues and in outgoing orders, and we, in turn, put what we do.” If that’s any indication, Morgenstein’s level of their name on our books. Soon after, Alloy went public activity may be at fever pitch for a good long while. ■

Sternbusiness 11 Questions ANDREU PUIG SABANES (MBA ’91), 8general manager, City of Barcelona The host city of NYU Stern’s Global Alumni Conference in We want this to be the city with the most opportunities for its 2009, metropolitan Barcelona is a glittering port city of residents, with the quality of life here the same for everybody. 3.5 million people, a leading business, cultural, and We are working to ensure the same standards for transporta- tourist center, not just of Spain, but internationally. tion, infrastructure, services, public space, commerce, resi- There is a mayor of Barcelona, who is elected, and dential areas, and neighborhoods. A socially cohesive society is a sound base to boost economic growth. We have done this behind him there is Andreu Puig, the executive who runs across our 10 districts and are now working on our 73 neigh- the city. Puig is responsible for managing Barcelona’s 2.6 borhoods. billion euro budget, 13,000 employees, public services, and urban and economic development. 5. What is the greatest challenge you face in your job today? 1. Two weeks after you started your job, in July 2007, We think what makes the city work is not just the city coun- there was a blackout in Barcelona that affected 260,000 cil but everyone who operates in the city – the businesses, the people and lasted three days. What did you learn from NGOs, the social service organizations, the civil societies – that? many more stakeholders than in the private sector. It takes It was a quick lesson in getting to know the organization public/private cooperation to develop a consensus and to and how to get things done. I had to deal with federal, forge a common vision as to where the city should go. In the local, and state agencies and police, firemen, social assis- spirit of the Olympics, a “Model Barcelona” project was initi- tance, and power companies. Fortunately, there were no ated [an internationally renowned combination of urban poli- murders, no looting, and fewer traffic incidents than on cies], and advancing it is a top priority. normal days. And after the crisis, we established a project that we call the three S’s: supply, security, and system. We 6. Barcelona is hosting Stern’s Global Alumni Conference may be the only city with a fully coordinated diagnostic in June, and you are on the host committee. What kind of capability for our infrastructure. impression are you hoping alumni will take away? Three things: First, the local flavor of our Catalan culture – 2. What were some of the lasting effects of the Olympics, our language, our cuisine, and the sea. Second, our history, which Barcelona hosted in 1992? from Roman and medieval times to Gaudí. And third, the It was a great experience, and we were able to exploit that future: We are a place of tremendous business opportunity. opportunity. We emerged from the number two city in Spain and the capital of Catalonia to become a major inter- 7. What could American businesses learn from Spain’s, national city. Our goal has been to maintain and take and vice versa? advantage of that position. We have built on a very effec- We can offer creativity and innovation, not only technical but tive brand image, attracting tourism as well as investments. process innovation, a way of seeing business within a culture. We are now one of the top cities for living and business. We think branding is one of our strong points – how to build brands with special tastes and values. From America, we can 3. What is driving the city’s growth now? learn more on how to become global. We can also borrow a Barcelona has become the European capital of the greater sense of urgency, as the world turns very quickly. Mediterranean. Last November, we were chosen by the Americans are very good at being flexible. European Union as the site of the European Agency for Mediterranean Cooperation, which includes North Africa. 8. How did your Stern experience contribute to your We have the second busiest harbor in Europe, and we are success? the southern gateway for Asian products to enter Europe. That experience is now more useful than ever, especially in We are the city of reference for business development, cul- the global environment, which is increasingly complex and ture, and architecture. turbulent. Stern helped me to understand how the different elements of society are interconnected, which is necessary to 4. How would you like to see Barcelona evolve in the understand change. It also taught me values and social coming decades? responsibility which are also very important. 12 Sternbusiness Innovating Around Innovation The Berkley Center Celebrates Its First 25 Years

By Marilyn Harris hile still a student at vide it to all the other student clubs. States. That fall, he entered the NYU Stern, Yorick Ser And with that, Novalsys, Ser’s soft- business plan competition (MBA ’05) developed ware development company, was run by Stern’s Berkley Center W CollegeMailer, a pow- launched. for Entrepreneurial Studies. The erful software tool, to help his entre- For two years after graduation, process was grueling, but before it preneurs’ club officers better man- Ser ran the company part-time was all over, Ser had completed his age the club’s activities. Because while toiling away in the London business plan, made it to the semi- CollegeMailer was well designed and trading office of a major bank. “The finalist round, and landed his sec- easily adopted by the students, salary was good but I wasn’t happy,” ond client, the University of Stern’s Student Activities Office he recalled. So in June 2007 Ser quit Michigan. Today, Novalsys licenses decided to buy the system and pro- his day job and returned to the its software eCampusGroups, Entrepreneurship at Stern Through the Years

1982: Twenty-one students enroll 1983: The Price Institute for Entrepreneurial 1993: Stern alumnus, NYU in the first entre- Studies makes an endowment gift that lays the Trustee, and Chairman of the preneurship foundation for an entrepreneurship center. Stern Board of Overseers course offered by William R. Berkley (BS ’66), Stern, Patterns of 1984: The Center for Entrepreneurial Studies chairman and CEO of W. R. Berkley Corporation, Entrepreneurship, is officially founded. Ian MacMillan is appoint- presents a naming gift to develop cutting-edge taught by Zenas ed director. The Center immediately becomes entrepreneurship courses, co-curricular pro- Block. known for funded research and publishing the grams, and research activities. The Berkley Journal of Business Venturing. Center for Entrepreneurial Studies is born.

Sternbusiness 13 eCampusNet, and social sectors, and to provide up, Iconology, provides software and eAlumniAffairs intellectual leadership for the busi- web solutions that connect comic to top schools ness and academic communities. book enthusiasts with retailers and around the coun- Programs for teaching entrepreneur- publishers. In addition to the cash try. ship are in their infancy, and Stern’s received, Steinberger was able to Successes such Berkley Center is “virtually alone in leverage the coaching, mentoring, as Ser’s – and the the US and probably the world” in its networking, and pro bono services Alumnus Yorick Ser number and vari- efforts to systematize such methods, the program provided. “Not only did launched his software development company, ety of students’ said William Baumol, Harold Price we meet our chief source of funding Novalsys, with the help other innovative Professor of Entrepreneurship, pro- through the Berkley Center and our of the Berkley Center. ideas for startups – fessor of economics, and academic work in the business plan competi- are especially rewarding for those at director of the Berkley Center. “We tion, but one of our judges also fund- the Berkley Center as it marks 25 want to connect teaching methods ed us at a very early stage,” he noted. years at Stern this year. with subsequent careers,” he said. The role of innovation and start- “Acknowledging the talented stu- Accessible to students and alumni up companies in the US and global dents and committed faculty who alike, the Berkley Center’s flagship economies can hardly be overstat- are working to bring these ideas to program is its rigorous, eight-month- ed. “The small firm, home of the life is a special way to celebrate our long business plan competition, now independent entrepreneur and the 25th anniversary,” said Jeffrey A. in its 10th year. A record-setting 450 independent inventor, has been the Carr, clinical associate professor of students and alumni entered this primary source of the technical marketing and entrepreneurship experiential learning program last ideas and radical innovations that and an entrepreneur himself. Carr fall, competing for a share of seed serve as the foundation for the has served as the Center’s executive money to launch their ventures. unprecedented growth perform- director since 2007. “Our mission at Thanks to the generosity and fore- ance of the world’s industrial the Berkley Center is to nurture sight of Stern Overseers Ira Leon economies,” Baumol said. “The entrepreneurial talent and, through Rennert (MBA ’56, Parent ’00), data also suggest that small firms research, to add to the knowledge chairman and CEO of The Renco are the major source of new jobs.” base. In the classroom, we teach stu- Group, Inc., and Stewart Satter (MBA According to a recent survey by dents the skills needed to start a ’82, Parent ’10), CEO of Consumer the Ewing Marion Kauffman business, but when it comes to Testing Laboratories, Inc., $175,000 Foundation, the world’s largest entrepreneurship there is no substi- in seed money is available this year to foundation devoted to entrepre- tute for actually doing the work.” winners of the competition and will neurship and a major funder of the The Berkley Center, established jump to $200,000 next year. Berkley Center, more than 70 per- in 1984, was organized to create David Steinberger (MBA ’08) was cent of voters say the health of the new knowledge in the field of entre- one of those winners in the 2006- economy depends on the success of preneurship and innovation, to pre- 2007 competition. “The seed money entrepreneurs, and many see entre- pare the next generation of entrepre- from the competition was extremely preneurs as the answer to the cur- neurial leaders in the business and helpful,” said Steinberger. His start- rent financial crisis.

1998: The First Annual NYU Stern Business 2000: Stern alumnus and Overseer Ira Leon Rennert (MBA ’56, Parent ’00), chairman and Plan Competition is held. Eighty-eight teams CEO of The Renco Group, endows the business plan competition. His gift enables vie for $50,000 in seed money. $50,000 in seed money to be awarded annually.

1999: Reflecting the growing prominence of 2000: The Price Institute for Entrepreneurial Studies establishes a $100,000 endowment entrepreneurship research and study at Stern, in support of the Harold Price Entrepreneurship Award. This student award is given annu- a new academic area, Entrepreneurship & ally to an MBA student in recognition of outstanding achievement in entrepreneurship Innovation, is introduced. studies and leadership.

14 Sternbusiness Academic Innovators nus, NYU Trustee, and Chairman of The late Professor Zenas Block the Stern Board of Overseers Five of 25 Tips for Entrepreneurs from Entrepreneurs was an early proponent of teaching William R. Berkley (BS ’66), chair- entrepreneurship at Stern. Soon man and CEO of W. R. Berkley Visit www.stern.nyu.edu/berkley for the remaining 20 tips. after offering to teach a course in Corporation, presented a naming corporate venturing as an adjunct gift to develop cutting-edge entre- 1. Listen critically to others but don’t let people professor in 1981, he organized and preneurship courses, co-curricular dissuade you from pursuing your own ideas. led the faculty task group that, with programs, and research activities. Be willing to go it alone. an initial $500,000 grant from the Five years later the first formal busi- -Stewart Satter (MBA ’82, Parent ’10) Louis and Harold Price Foundation, ness plan competition was held, with CEO, Consumer Testing Laboratories established the building blocks for 88 teams vying for $50,000 in seed 2. Just remember that everything takes twice today’s Berkley Center. Block was money. In 2000, an endowment by as long and costs twice as much as you supported in his efforts by the late Rennert made that $50,000 an expect it to. Gloria W. Appel, president of the annual award, and in the same year, -Matt Heyman (BS ’84) Price Foundation and later a mem- the Price Foundation established a President, Grupo Cinemex ber of Stern’s Board of Overseers. $100,000 endowment to support the “The goal we set was to become a Harold Price Entrepreneurship 3. Set clear achievable goals for each day, significant center for research in Award, which is given to an MBA month, and year. Let nothing stand in the way of achieving those goals. the area, because entrepreneurship student pursuing an entrepreneurial -Liz Elting (MBA ’92) was not regarded as academically career who has attained outstanding Co-founder/Co-CEO, TransPerfect respectable,” Block recalled some achievement in entrepreneurial stud- years later. He started a competi- ies and student leadership. 4. Be responsive and treat everyone with kind- tion for the best academic ness and respect. paper, held retreats in -Robert J. Simon, Sr. (MBA ’84) Senior Managing Director, Bradford Equities which students presented Management, LLC business plans, and, most significantly, developed 5. Follow your gut. So much about doing and taught two elective well in business is about making good courses: Patterns of decisions – for your company and for you. Entrepreneurship, and Entrepreneurship -Mary Ellen Georgas (MBA ’93) Principal/Owner, Georgas Consulting, LLC and Venturing in Corporations. The entrepreneur- The Berkley Center Advisory Board: (from left to right, back row) Vern Kennedy (MBA ’94), Stephen ship program at Stern McCarthy (MBA ’79), and Markus Deutsch (MBA ’91), made another quan- (second row) Mary Ellen Georgas (MBA ’93), Loretta Poole, and Robert Simon (MBA ’84), (front row) tum leap in 1993, Jeffrey A. Carr, Cynthia Franklin (MBA ’92), and when Stern alum- Stewart Satter (MBA ’82, Parent ’01); not pictured: Matt Heyman (BS ’84) and Jill Kickul.

2001: The Berkley Center 2002: Stern alumnus and Overseer Stewart Satter 2003: Entrepreneurship is offered as a gradu- launches a social entrepreneur- (MBA ’82, Parent ’10), CEO of Consumer Testing ate-level specialization in response to strong ship initiative offering courses Laboratories, provides seed funding to launch the and growing interest among students. and programs for the growing Satter Program in Social Entrepreneurship. Today, the 2005: World-renowned econo- number of students and alumni Satter Program supports the annual Social Venture mist, researcher, and prolific who wish to use business skills Competition, which awards the $100,000 Satter Prize; author William J. Baumol joins to create innovative approaches the annual Conference of Social Entrepreneurs; and the Berkley Center as academic to tackling societal problems. the annual Social Entrepreneur of the Year Award. director.

Sternbusiness 15 As financial support grew, so did support the business plan competi- why not do so while building a ven- programs. A social entrepreneurship tion and endow a faculty chair in ture that is my own.” Another con- initiative, now headed by Clinical entrepreneurship. tributing factor to the popularity of Professor of Management and entrepreneurship she cited is the Organizations Jill Kickul, was The Next 25 Years rock star status of innovators such launched to offer programs aimed Interest in entrepreneurship has as Steve Jobs, Richard Branson, at creating innovative approaches grown dramatically at Stern and it’s and Sergey Brin, who have helped to solving societal problems. Satter a trend that is expected to continue make the dream of starting and funded the Satter Program in Social and even accelerate. “Students take growing a successful company seem Entrepreneurship that supports its one look at what’s happening in much more accessible. own competition, with a $100,000 today’s economy – once venerable In response, the Center has cre- prize, as well as an annual confer- companies disappearing over night, ated more opportunities. As of ence and award. A recent conference tens of thousands of high-paying 2008, both undergraduate and on social entrepreneur- graduate students can ship was oversub- “Students take one look at what’s choose to specialize in scribed. In January, happening in today’s economy – entrepreneurship, and a more than 500 alumni specialization in social and students packed a once venerable companies disap- innovation and impact lecture by microfi- pearing over night, tens of was offered for the first nance guru and Nobel time to MBA students. Laureate Muhammad thousands of high-paying jobs As the Berkley Cen- Yunus. And last fall, simply vanishing – and suddenly ter’s 25th anniversary when 100 students entrepreneurship doesn’t seem passes and its next applied for 20 spots in quarter century begins, a new 12-week labo- like the risky way to go.” both Carr and Franklin ratory on innovation are focused on its role and entrepreneurship, the Center jobs simply vanishing – and sud- as a complete resource for nascent was persuaded to double registra- denly entrepreneurship doesn’t entrepreneurs. As part of that plan, tion. Underpinning this growth have seem like the risky way to go,” said they are recruiting mentors and been donors such as Beny Alagem Cynthia Franklin (MBA ’92), senior coaches from among the alumni (Parent ’09), an entrepreneur and associate director of the Berkley population who will be matched up co-founder of Packard Bell Center. An entrepreneur who start- with students hoping to nurture Electronics, whose $3 million gift ed a successful business shortly new ideas. supports a broad range of programs, after receiving her MBA, Franklin For his part, Baumol has co- and Ira Rennert, who recently underscored the lesson: “It’s all edited the first of a three-volume expanded his support of the Berkley risky. More students are concluding series of books on entrepreneurship, Center with a $3.5 million gift to that if I’m going to assume risk, History of Entrepreneurship: From

2008: More than 450 students, 2008: A gift from Ira Leon Rennert dou- representing 156 teams, enter the bles the business plan competition prize annual NYU Stern Business Plan to $100,000 and establishes the School’s Competition. Today, the competi- fifth chair in entrepreneurship. tion is one of the largest of its type, having awarded more than $1 million in seed money and pro bono services since its inception 10 years ago.

16 Sternbusiness Celebrating 25 Years: Support for the Berkley Center Like every good entrepreneur, Professor Zenas Block, from the outset, had a sound academic and co-curricular organizational plan as well as an aggressive fund-raising strategy to launch the Center. Starting with a most generous seed gift from the Louis and Harold Price Foundation, the Berkley Center today is a success because Stern alumni and friends have dreamed, invested, and labored with us as we discover, teach, grow, and launch. Below is a list of many of these donors, which Stern and the Center would like to thank. To see a full list, visit www.stern.nyu.edu/berkley. Individuals Roy B. Trujillo (MBA ’93) Alumnus David Steinberger (left) and his partners credit the Berkley Center’s business plan competition with helping them Beny Alagem (Parent ’09) Michael A. Tunstall (MBA ’86) start their company, Iconology. Gloria W. and Edwin M. Appel Robert Vukovich William R. Berkley (BS ’66) Professor Jeremy Wiesen Mr. and Mrs. Richard Block Carol and Lawrence Zicklin Mesopotamia to Modern Times, which Professor Zenas Block will be published this year by the Karen Chase (MA ’93 (GSAS)) Foundations Princeton University Press under the Michael R. Cunningham (MA ’96, PhD ’05 Atlantic Philanthropies Blue Ridge Foundation, Inc. Berkley Center imprimatur, and he is (Steinhardt)) Citigroup Foundation looking forward to a period of height- Markus Deutsch (MBA ’91) Barry K. Fingerhut (MBA ’69) David Himelberg Foundation ened activity at the Center. “We are Professor Avijit Ghosh Ewing Marion Kauffman Foundation designing a very ambitious, long- Jay Golding (MBA ’69) Houston Jewish Community Foundation range program for carrying out the Mr. and Mrs. Howard L. Goodkind Jewish Communal Fund required research and for designing Charles T. Harris III LJ International Inc. imaginative, systematic programs for Norman Himelberg (BS ’58) Louis and Harold Price Foundation Ilan Kaufthal (MBA ’71) Merrill Lynch & Co Foundation Inc teaching entrepreneurship,” he said. David D. Kimball National Christian Foundation Such plans bode well for would- Professor Matthew Klein New York Community Trust be entrepreneurs at the Center. As Louis Krouse Public Forum Institute he closes in on his second round of Charles Lazarus Thomas L. Thomas Family Foundation financing, Iconology’s Steinberger Susan E. Miller (MBA ’84) Corporations said, “My three years at Stern were Daniel A. Nathanson (MBA ’75) Thomas B. Pennell (MBA ’93) American Express defined by the competition. It Loretta Poole Barclays Capital changed my direction, connected me Kenneth A. Preston (BS ’50) Breitling Ventures with high-performing, like-minded Inge and Ira Rennert (MBA ’56, Parent ’00) Deloitte entrepreneurs, and helped me define Laura Robbins (MBA ’05) The Dexter Coporation my direction in my working life. Stewart Satter (MBA ’82, Parent ’10) Eden, LLC Robert J. Simon (MBA ’84) EuclidS Those were memorable Stern years Frederic Slater Knox Lawrence International, LLC for me, and it’s thanks to the Jonathan S. Smiga (MBA ’91) Lowenstein Sandler PC Berkley Center.” ■ Paul Sperry Pennell Venture Partners, LLC Irwin Tantleff (MBA ’91) Yahoo!

2008: An endowment from the Beny Alagem (Parent ’09) 2009: Princeton University Press will publish the first in a series of books Family provides support for the Innovation & Entrepreneur- under the Berkley Center imprimatur, the much-awaited History of ship Lab and business plan competition programming. Entrepreneurship: From Mesopotamia to Modern Times. Co-edited by William J. Baumol, it will be among the first volumes (perhaps the first) on the subject. 2008: The NYU Stern Social Venture Competition celebrates its 5th anniversary. More than $500,000 in seed 2009: The Berkley Center for Entrepreneurial Studies celebrates its 25th money and services has been awarded to promising social anniversary. enterprises since it was started.

Sternbusiness 17 Leaving a Stronger Stern A Q&A with Dean Thomas F. Cooley

Thomas F. Cooley is Richard R. West

Dean and the Paganelli-Bull Professor

of Economics at New York University

Stern School of Business, as well as a

professor of economics in the NYU

Faculty of Arts and Science. He was

appointed dean of NYU Stern in 2002.

A respected economist, Cooley is a

fellow of the Econometric Society, a

member of the Council on Foreign

Relations, fellow and former

president of the Society for Economic

Dean Cooley was interviewed in February by Joanne Hvala, associate dean, Dynamics, and writes a weekly col- marketing and external relations. umn on economic matters at Joanne Hvala: Throughout your tenure as dean, you’ve talked about business as the most important force for social change. What exactly do you mean by that and why is it so important to you? Forbes.com. Cooley announced in Dean Thomas Cooley: It is important to me personally because I want to be engaged in an activ- December that he would be stepping ity that I think of as contributing something to society; that is part of my mission in life. A lot of people think of business as solely the pursuit of personal gain. Personal gain is one element of the busi- down as dean and returning to ness world, but I prefer to view business as the most powerful institution for improving the well-being of people. The profit motive can be a powerful lever in moving investment, institutions, and govern- research and the classroom at the ments into doing what is good and right for society. The whole of the emerging green economy is a case in point. close of the 2008-2009 academic year.

18 Sternbusiness JH: How has Stern been leading the dialogue on the understanding of and of October and had a draft in place by the week after Thanksgiving, with a pro- solutions for the current economic and financial crisis? duced prepublication version distributed before the University closed in TC: First of all, we can claim to be the intellectual home of people who foresaw December. In an academic context, this is about as fast as I’ve ever seen a series the crisis and acted on their understanding – both Nouriel Roubini, a professor of fresh ideas hammered out and brought to the public. of economics here, and John Paulson (BS ’78), one of our alumni, are examples. More broadly, we are in the enviable position of having a superb research JH: One of the things you’ve talked about, especially in conjunction with the faculty whose work in creating knowledge is matched by a deep understanding White Papers Project, is the value of an independent voice. Can you talk about of the institutional setting of business. Our faculty truly understands the inter- the value of having that independent voice from an academic institution, espe- locking nature of complex issues. cially in light of what’s going on in the Whether the subject is marketing, man- world? agement, finance, or economics, our A lot of people think TC: One of the reasons that the public looks professors have a willingness to speak of business as solely to us is that they can’t cut through the out and articulate views about policy in cacophony of sound-bites, interest groups, the pursuit of personal gain. the world of business. I think that’s “ and partisanship. Society needs institutions served us well in this crisis. Personal gain is one element that will step back and take a dispassionate, of the business world, but I nonpartisan look at how things are working, JH: Talk about the White Papers especially in times of crisis. That’s one of Project, which has been an extraordi- prefer to view business as the the reasons we have universities. When I nary faculty response to the crisis. most powerful institu- first took over as dean I wrote that we have TC: The White Papers Project (see tion for improving the a fiduciary duty to the truth. Institutions like page 22) came as a response not just ours are valuable because we can take a to the crisis itself, but to the real need well-being of people. dispassionate view and look at the way the we had for clarity. I can’t begin to tell ” world works and think about the way the you how many media calls the School received as the crisis unfolded. People world ought to work, without the influence of politics or special interests. needed help in understanding what was happening, what had gone wrong, and what the possible solutions would be. It became clear that there is a deep need JH: Last April, Stern completed the largest fundraising campaign in the School’s to address the failures of the regulatory system and the market imperfections history, raising over $190 million. What have those resources enabled Stern to that led to this crisis and that it was important for us to be proactive and try to achieve? play a role in shaping how policy responds. So, together with my colleague Ingo TC: On the human capital side, resources have helped us to fund some 23 Walter, I articulated the view that it was important for us to do something and do named professorships and a large number of endowed research fellowships. it quickly. He and I convened a small group of people, and we had this idea of These are essential to attracting and retaining the very best scholars in the writing a series of white papers on what were initially 10 different topics. That world, and we’ve been quite successful at building our faculty. We’ve hired more was where it started. Soon it expanded to 18 topics under discussion by a group than 90 faculty members in the seven years I’ve been dean, which is a stunning of more than 30 faculty members working together to address the issues and the infusion of talent. The resources have also helped to fund more scholarships for policy prescriptions that we think make sense. A coalition of the faculty was will- undergraduate students and for graduate programs that enable students to study ing to work collaboratively on one of these topics. Our goal was to be ready as abroad. We’ve also been on a major campaign to improve our physical space, the new administration came into power and began to rethink the important which gets very heavy usage and constantly needs refurbishing – some areas issues. We held a number of day-long meetings, with lots of back and forth and hadn’t been touched for many decades. We poured a lot of resources into internal dialogue. The result is this book that we produced in record time, which transforming it, and we’ve actually increased our total physical space by at contains, I think, some very good ideas. We started this conversation at the end least a third already.

Sternbusiness 19 JH: What are the advantages of the School’s location in New York City? TC: I wouldn’t trade our facility and our location for the greatest building imaginable anywhere else. We’re in the heart of commerce in New York, and it’s a vibrant, diverse, exciting place. More important, we’ve used the city as an educational asset – panies in India and elsewhere in the world. both as a classroom and a laboratory – and it informs our research and teaching. We have access to a stunning array of practitioners who talk to our students JH: Stern admissions have set new records – our undergraduate SAT scores about real work experiences. Our students are exposed not just to the world of have never been higher and the selectivity of our graduate students has risen banking, finance, and Wall Street, but to consulting firms, nonprofits, arts over the years. Why do you think Stern is a magnet for these bright and accom- organizations – for instance, they learn how businesses like the Metropolitan plished students? Opera work and to understand luxury retailing. We take full advantage of an TC: It’s always the quality of the faculty, the programs, and the experience that incredibly enriching environ- matters to students. Obviously, ment. people care about reputation, I think business education and ours has soared, driven by improvements in the quality of JH: Looking more broadly, always faces a challenge when our faculty and programs, and Stern has made some partner- the economy goes through a cycle. “ increases in the visibility of ships with schools and compa- ...One of the things this crisis teaches NYU as a very desirable desti- nies around the world. How nation university. But the other have these global partnerships us is that business educators do have thing that I think is particularly enhanced the School? to think about how to teach people to telling is the quality of the stu- TC: Global business education have dynamic, forward-looking habits dent experience, beyond the is in great demand and we have of thought, because a lot of bus- education. We’ve worked very been steadily building our glob- hard to build a sense of com- al portfolio for the past eight or iness education is inherently munity and a positive experi- nine years. Our TRIUM program backward-looking. ence for our students so that is one of the most sought-after ” they’re really happy to be here executive education programs in the world. It’s enabled us to form great part- and don’t see it as just something they’re doing for a while. And when they nerships with two other outstanding schools, the London School of leave, they feel a connection that will continue for a long time. We know that Economics and HEC Paris, and to attract and capture as part of the Stern from talking to our students and measuring their experience. It’s really an alumni and student body an incredibly diverse set of senior managers from important part of the value proposition for Stern. around the globe. We also have a new program with Hong Kong University of Science and Technology – a master’s program in global finance that’s helped JH: What do you see as the major challenges facing business education today? to develop Stern’s reputation in Asia. We have two new programs coming TC: I think business education always faces a challenge when the economy online in Europe targeted at very specific areas of finance, which I think are goes through a cycle. This is a particularly severe cycle, so the questions that badly needed programs. And we have developed executive programs for com- people are going to raise are, “If something like this can happen, is it the fault of

20 Sternbusiness From left to right: Dean Cooley met with students at a Dean’s Roundtable luncheon; he discussed the global economy with his thesis advisor, Nobel Laureate Edward Prescott at a Japan-US Center event; he met with alumnus Abraham George at a student club event centered on India’s development; and he discussed how to fix the financial crisis with finance professor Roy Smith and a panel of experts from The Economist and the Council on Foreign Relations. business education? Are we teaching people the right things? Do they leave here proud of. Be engaged with us, be involved with us, and help us achieve this with the right kinds of values? Do they have the right kinds of tools?” One of the mission.” The responsiveness of our alumni to that message has just been things this crisis teaches us is that business educators do have to think about extraordinary. how to teach people to have dynamic, forward-looking habits of thought, JH: Is there a particularly memorable moment of your deanship? because a lot of business education is inherently backward-looking. Business is TC: I met an alumnus in India named Abraham George (MBA ’73, PhD ’75). I a dynamic social construct that has changed dramatically and is going to con- visited a school he was running for the children of the destitute in the country- tinue to change dramatically. The challenge is to give people the right analytical side near Bangalore. I didn’t know Abraham George yet and I hadn’t been too tools, and to teach them to be forward-looking and to know the right questions well briefed on his school and his other efforts. It was a very moving experience to ask. It’s not a static profession. to see what he was trying to accomplish. Here was an alumnus who had been enormously successful in business, who believed firmly in the business propo- JH: As you reflect on your tenure as dean, what are you the proudest of? sition and the value of markets and of education, and who was trying to trans- TC: I’m most proud of how successfully we were able to work together as a form, in his way, a part of society that has been left out. It was the ultimate team and how we were able to unite around a set of common goals and create a embodiment of the proposition that business is an important force for social sense of community, pride, and confidence that we know what we’re doing, and change. And, of course, Abraham has become a friend and his many children we’re doing it well. I think we’ve really built the faculty and the student body and have become very important to me as well. the administrative framework for the School in a way that has enhanced its reputation, and made it a wonderful place to be a student, an alum, a professor, or an JH: What would you most like to see happen next for the School over the next administrator. I’m really proud of that! five to 10 years? TC: I would like to see the School become even more recognized as the intellec- JH: What’s been your most gratifying aspect of the job? tually lively go-to place that people look to for knowledge and insight about the TC: The most gratifying aspects have been the incredible people I’ve gotten world of business. Hopefully the School will continue to influence both policy to meet and make friends with among our alumni and students and the and practice. We need to focus on thought leadership and community. I think sense of mutual respect and purpose that I feel. They’ve been wonderfully that mission is more important than any particular programs. I am proud of the supportive, full of creative ideas, energy, enthusiasm, and astonishing progress we have made, but there is much to be done. I am sure my successor accomplishment. I’ve had the opportunity to meet so many people who are will take on this challenge with enthusiasm. successful in many, many dimensions. Having had the opportunity to lead such a dynamic and diverse institution has also been a personal growth JH: What’s next for you? experience for me. TC: My plan is to go back to teaching. I am going to take some time off, finish writing a book and other work, and spend a bit more time at the Council on JH: What have you enjoyed most about meeting the alumni, in particular? Foreign Relations, but I will return to the faculty and be here to teach and to TC: I’ve most enjoyed being able to go to alumni and say, “Here we are, we’re support whoever is leading the School next. I’ve invested so much here, and I your school, we’re doing great things, and your success is something we’re feel so passionate about Stern. It is a wonderful institution. ■

Sternbusiness 21 Fixing Our Bro Stern Faculty Write

What does “thought leadership” look like? long. As Stern is widely recognized as Last October, as the crisis in the having one of the finest finance and eco- world financial system continued to nomics faculties in the world, they unfold, it became clear that NYU knew Stern professors had plenty of Stern faculty were playing an impor- ideas about what had gone wrong tant role in shaping the dialogue. and what policies needed to be put Nothing had torn apart the market with in place. such destructive force since the 1930s, and They prompted a small group the conventional wisdom about how things of professors to initiate a proj- are supposed to work in a well-functioning ect to create white papers on system was being challenged. Macroeconomist the crisis and invited all Dean Thomas F. Cooley and Vice Dean of interested faculty to partic- Faculty and finance professor Ingo Walter decid- ipate. Eighteen weeks ed that the financial disaster provided a unique later, a book, Restoring opportunity to harness the School’s collective Financial Stability: How to expertise and make a serious contribution to the Repair a Failed System, was published repair efforts that were sure to get underway before by John Wiley & Sons. The book features 18

Lasse H. Pedersen Eitan Zemel Lawrence J. White Ingo Walter

Stephen J. Brown Dean Philipp Schnabl Edward I. Altman Thomas F. Cooley

Menachem Brenner

Stephen C. Figlewski

22 Sternbusiness ken Economy: the Book

white papers written by 33 Stern and NYU faculty conduct. By mid-December, pre-publication copies of members from several of the School’s departments. The executive summaries and essays were spiral-bound and discussion – in day-long seminars, water-cooler com- distributed to policymakers, congressional leaders, regu- mentary, and seemingly 24-hour e-mail – was intense, lators around the world, and members of then President- engaging, and, indeed, inspiring. Elect Obama’s transition team. The point of the activity was not, however, only to fos- Finance professors Matthew Richardson, the director of ter intellectual excitement within the School, as impor- the NYU Stern Salomon Center, and Viral V. Acharya took tant as that is. It was to bring clear-eyed analysis of what the lead in this effort, pulling all-nighters, nagging, cajol- had gone wrong together with unbiased and independent ing, editing, and keeping the project on course. recommendations for how the world’s financial system For Stern faculty, the opportunity to engage on could be righted both in the short- and medium-term. pressing global issues with colleagues from several Each of the papers started by discussing the nature of the departments exemplified the intellectual culture of the problem, where things went wrong and where they stood Stern School.

at the moment, what options were available to repair the Authors not pictured: Viral V. Acharya, David K. Backus, immediate damage and prevent a recurrence at the least Andrew Caplin, Gian Luca Clementi, Robert F. Engle, possible cost to financial efficiency and growth, and a Dwight Jaffee, Kose John, Alexander Ljungqvist, Anthony W. Lynch, Nouriel Roubini, Anthony Saunders, Marti G. Subrahmanyam, proposed course of action for public policy and business Rangarajan K. Sundaram, and Paul A. Wachtel

Roy C. Smith Thomas Philippon Robert E. Wright Stephen G. Ryan Jennifer N. Carpenter Matthew Richardson Stijn Van Niewerburgh Marcin Kacperczyk Xavier Gabaix

Sternbusiness 23 From left to right: At the conference on the white papers in March, book co-editor Viral V. Acharya spoke about regulatory reform and Paul Volcker and Myron Scholes participated in a panel discussion on how to restore financial stability; Vice Dean Ingo Walter, Dean Thomas F. Cooley, book co-editor Matthew Richardson, and finance professor Stijn Van Nieuwerburgh were some of the faculty who taught the MBA course on the financial crisis. But more than that, recommendations and sugges- Markets, Institutions & Instruments. tions from papers collected in the book, spun off into op- The crisis is the ultimate teachable moment, as Dean ed pieces, media coverage, and other materials, have had Cooley called it, and Stern students have been able to a material impact on the current discussion. benefit immediately from the scholarly work that has been in progress. Four Key Elements A five-lecture MBA This effort required course based on the book’s four things to ensure The [economic] crisis is the contents and taught by a impact: objectivity, ultimate teachable moment, dozen of the faculty credibility, immediacy, authors began in early and dissemination. and“ Stern students have been able to February and was oversub- Objectivity meant benefit immediately from the scholarly scribed as soon as it was maintaining clear offered. And in March, the independence from work that has been in progress. School held a conference financial institutions, around the white papers, policymakers, and with alumni and press advisers who helped invited to hear, among oth- produce the financial disaster in the first place, and who ers, featured speakers” Paul A. Volcker (Hon. ’83), chair- would soon try to influence the repair process in ways man of the Economic Recovery Advisory Board and for- that would inevitably favor their own interests. mer chairman of the Federal Reserve; Myron Scholes, Credibility meant that the project had to be based on a chairman of Platinum Grove Asset Management and win- combination of solid research and institutional knowl- ner of the 1997 Nobel Memorial Prize in economics; and edge that the Stern faculty is fortunate to have in abun- Charles Plosser, CEO of the Federal Reserve Bank of dance. Immediacy was driven by the need to impact the Philadelphia (see page 25). financial system repair process in its early and formative stages, before positions among regulators and politicians Early Reactions began to harden. And dissemination meant that the key Even before publication, the book’s analyses and advice findings and their underlying rationale had to have had begun to get traction among the nation’s thought lead- immediate impact but also provide a robust and durable ers. The ideas filtered into the national debate, appearing template that would last through the drawn-out policy in op-ed pieces, on financial news networks, and in legis- debates to come. All four objectives were achieved, and lators’ briefing books. On Inauguration Day, an ad in the at breakneck speed. Financial Times directed readers to the Stern website that The executive summaries were posted, day by day, on contains executive summaries of the white papers the Stern website and also on Roubini Global Economics (http://whitepapers.stern.nyu.edu). The (RGE) Monitor, where they received literally thousands “Stern on Finance” blog, maintained by Thomas of hits. Philippon, assistant professor of finance, helped galvanize To ensure that these thought pieces would be avail- the discussion. According to Volcker, “The Stern School able in libraries worldwide, versions of the executive faculty is making an important contribution to the need- summaries were published in a special issue of Financial ed debate about how to go about reforming our broken

24 Sternbusiness Volcker, Scholes, Stern Faculty, and Industry Experts Debate – Before Alumni and the Media – How to Repair the Financial System In March, NYU Stern hosted a panel discussion for alumni and the media that tapped into the energy behind the creation of Restoring Financial Stability: How to Repair a Failed System, a landmark project for the School that was published in March by John Wiley & Sons. At the half-day conference, such distinguished panelists as Paul Volcker (Hon. ’83), chairman of the Economic financial system.” Recovery Advisory Board and former chairman of the Federal Reserve; Myron The book is structured as 18 independent Scholes, chairman of Platinum Grove Asset Management and winner of the policy papers that propose market-focused 1997 Nobel Memorial Prize in Economics; Charles Plosser, CEO of the Federal solutions to each problem within a common Reserve Bank of Philadelphia; Eric Dinallo, superintendent of the New York State framework. The papers are grouped into seven Insurance Department; Madelyn Antoncic (MPhil ’81, PhD ’83), managing direc- sections: Causes of the Financial Crisis; tor and senior advisor at Lehman Brothers; and John Gapper, associate editor Financial Institutions; Governance, Incentives, and chief business commentator at the Financial Times, joined Stern finance and Fair-Value Accounting; Derivatives, professors Ingo Walter, Matthew Richardson, Viral V. Acharya, and Thomas Short-Selling, and Transparency; The Role of Philippon to expand upon the subject to a rapt audience. the Fed; The Bailout; and International General themes developed during the discussions, which were organized Coordination. Observed Henry Kaufman (BA around the topics of how to restore financial stability and the future role of gov- ’48, PhD ’58), president of Henry Kaufman & ernment in the financial system. Panelists decried the emergence of hyper-com- Co. and chairman emeritus of the Stern Board plex financial institutions whose failure jeopardizes the health of the economy. of Overseers: “What makes this book especial- Walter called them financial “Godzillas” – companies too big to fail and too ly valuable are its detailed evaluations and complex to regulate. analyses covering many spectrums of the marketplace.” A general consensus emerged regarding a need to restructure and regulate the industry, but exactly how generated diverse proposals. Volcker suggested a Potential Unlocked two-tiered financial system – in which regulated commercial banks would be Restoring Financial Stability is Stern’s first separate from capital markets – that would operate relatively regulation-free but foray into producing an independent, pub- just self-destruct if they blew up, rather than endanger the commercial credit lished collection of faculty work, one that apparatus. Some panelists favored an “über-regulator,” while others preferred a employs research-driven critical solutions that system of graduated regulatory bars pegged to the degree of systemic risk are projected into the political and economic dialogue on a national level. Together with the posed by a particular sector. More information about the conference, including seminars and conference, the project under- video clips, is available online at http://whitepapers.stern.nyu.edu/conference. scores the multidimensional nature of Stern’s intellectual vigor. It is tangible evidence of the School’s schools that could have pulled together such a broad and mission to place its students and faculty at the nexus of incisive analysis in such a short time,” said Vice Dean business and society. Said Dean Cooley: “We embed the Walter. The book addresses the right issues, at the right issues into the classroom, create top-flight research cen- time, and in the right way. And it was all accomplished ters that produce state-of-the-art knowledge about without significant financial resources by an extraordi- important topics, and then become the venue in which the nary talent pool convinced that the effort was important. expertise is translated for the public. We must be, and More good academic work will, of course, be done, and, indeed we are, shaping the debate itself.” many others will enter the competition of ideas. Some already have. But what has become known as the “NYU A Tour de Force Stern Report” has already become a benchmark against Looking back, this is an important milestone at a crit- which they will be judged. This is what thought leader- ical point in history. “There are few, if any, major business ship looks like. ■

Sternbusiness 25 LeadingIndicators

Jim McNerney chairman, president, and chief executive officer The Boeing Company

Erin Burnett: The big and a passenger version. We’re going to EB: As the largest exporter, you have to question right now is, protect our ability to invest there by con- care about free trade. During the cam- how bad is it out there? trolling costs in other places. paign, President-elect Obama had been Jim McNerney: We’re very specific that he would renegotiate trying to sort through EB: When you look at the places in the NAFTA, and had been vocal in not sup- Jim McNerney is chairman, the credit crisis. The consumer is not world that have been driving your busi- porting bilateral trade agreements. But president, and chief executive spending. Corporations are beginning to ness – the Middle East and Asia – do then he picked Rahm Emanuel, who react by reining in spending and getting you see weakness yet? Do you think wrote NAFTA, to be his Chief of Staff. So officer of aerospace giant costs in line. I’d say that we’re in for a we’re decoupled from the rest of the it could lead to some confusion over Boeing, the world’s largest difficult time. world or are more intricately linked than whether he’s going to renegotiate. What manufacturer of commercial we ever thought before? do you think? jetliners and military aircraft, EB: From your perspective, when you JM: I certainly see the signs of economic JM: I think it was a very good sign that with $66.4 billion in 2007 rev- look at orders, is there a pause or is it a weakness in places like Dubai and China he picked Rahm for that job. He’s a mod- enues. Prior to joining Boeing halt that is still under way? and continued stagnation in Japan, and erate who was involved with free-trade in 2005, McNerney was chair- JM: Our business is a very long-cycle India is struggling. I’ve just named places design. I think history tells you that at man and CEO of 3M, a $20 bil- business where we’re delivering things that that order a heck of a lot of airplanes times like this, if you take protectionist lion global technology compa- people ordered four or measures, it can be a ny. Before that, he spent 19 five years ago, in many “Our business is a very long-cycle business real mess because you years in a variety of top-level cases. The immediate where we’re delivering things that people end up protecting the executive positions at GE, test is whether people ordered four or five years ago, in many cases. weakest parts of your including CEO of GE Aircraft can finance the planes economy. And there is Engines. we are now delivering, The immediate test is whether people can inevitably a response and in most cases they finance the planes we are now delivering, from your trading part- Jim McNerney was interviewed can. But I do anticipate and in most cases they can.” ners who say, “Hey, wait on November 12 by Erin some cancellations and a minute. If we don’t Burnett, anchor of CNBC’s deferrals. We have a capital corporation, from us. Has it gotten to the point where have access to your markets, you don’t “Street Signs” and co-anchor Boeing Capital, that is a lender of last they’re not going to take delivery on the have access to ours.” Immodestly, we at of CNBC’s “Squawk on the resort, so, in some cases, we can step in eight years worth of backlog that we have Boeing view ourselves as innovators who Street.” She also appears reg- there. But as I look at the next four to five with them? Not yet. We’re very fortunate can compete on a global basis in any ularly on NBC’s “Today” and quarters, we’re in pretty good shape. to have a very big backlog with these country, so we want open competition “Nightly News with Brian guys. I think there’s no doubt future everywhere. We think that industries Williams.” EB: Has anything changed in terms of orders will slow down. should be restructured that can’t compete how you’re running your business, or globally, just like we should be, too. how much you’re investing in new devel- EB: Are you concerned that our govern- opment? ment is getting too involved in allocating EB: Do you believe in a public works JM: Not yet. And I don’t anticipate that it capital? project right now? will. The 787, the Dreamliner, is 30 percent JM: I think President-elect Obama has a JM: I think there have been examples more efficient than the planes it will more balanced view than people give him through history where some amount of replace. So if an airline can get financing, credit for. This is a guy with a lot of public works has been a stimulus to the they will take this airplane. We have 900 capacity. I see him more like Bill Clinton economy. The infrastructure in this coun- orders. It represents sort of a step-function in his early days, when everybody was try needs some work. I hope they redo change in productivity for these airlines. concerned about a liberal agenda and he the air traffic control system because The only other major development is a came in with a pretty balanced view. that’s my pet project, and it’s a mess refurbishing of the 747, both a freighter right now. These projects can work, as

26 Sternbusiness pearls” set of acquisitions to regain some technical strength in what we view as technologies of the future, particularly in some of the more information-based, sen- sor-based technologies.

Q: It seems that Boeing is moving more towards smaller, more efficient planes with the 787 Dreamliner. Do you think that Airbus made a mistake in mov-

CNBC’s Erin Burnett interviewed Jim McNerney at a CEO Series event held at NYU Stern in November. ing forward with the A380 Super Jumbo? Or did they simply move long as they drive employment and there make sense without massive government AUDIENCE QUESTIONS first and Boeing didn’t think there is a real return. support? Q: I cannot think of a more concentrated was enough demand for two players in JM: I think the short answer is yes. I industry than yours. Do you see major that market space? EB: Are unions, as they’re structured in think in our industry the economic incen- competition coming from Asia, maybe, or JM: I think Airbus always chafed at the this country, a positive factor or a nega- tives and the green incentives line up India? fact that we had the largest airplane, the tive one that actually impedes growth? well. I think in the auto industry it’s a JM: Competition is coming. I think the 747, and had always figured they were JM: You can find examples where unions more complicated argument. It’s not clear Chinese will be first, probably within 20 eventually going to leapfrog there, and have played a negative role in a compa- that people will always buy the more effi- years, because they have all the elements they did. That choice seemed to assume a ny’s or industry’s competitiveness, such cient car. But you have to argue in the to compete with Boeing and Airbus; they hub-and-spoke world where air traffic as automobiles, steel, or the railroad name of the common good that some reg- just have to put them together. They have control would not be improved. You’d industry in times past. There are also ulation makes some sense. a market, the technical ability, and the have to lug a thousand people from one examples where unions and companies ability to finance these products. The hub to another hub, get [them] off the air- are producing very efficient, competitive EB: When I graduated from school, Wall issue for us is to be competitive when that plane, and get [them] on another airplane. organizations, such as the Teamsters at Street was the place to go. A lot of those time comes, and that has a lot to do with It didn’t anticipate the security world we UPS. I think Washington should stay out jobs aren’t going to come back any time legacy labor costs. have today, post-9/11. We had the advan- of the way and allow the collective bar- soon. Does that make it better for your tage of being able to anticipate that point- gaining process to work. If people want to industry, in terms of recruitment? Q: On the defense side, you no longer to-point world, because we made the form a union, they should be able to form JM: There are signs of more people build the parts and products yourself, but decision a little later than they did. We a union. There should be balance without going into engineering after many years rather take the role of lead systems inte- envisioned an airplane that could go a government interference. Now, we of decline. But compared to historical lev- grator. What are some issues that you long way, provide more passenger com- [Boeing] have had some difficulties [in els or to the investment that China, India, would expect or that you may have seen fort, and carry passengers at lower alti- 2008]. A balanced view would say that the and other countries are making, it’s still over the past couple of years? tudes effectively because it was made of union overreaches sometimes, and maybe low. A different immigration policy would JM: I think there are two issues associat- stronger composite material. We had a management does some things that they help. The current policy makes it difficult ed with it. One is the way the US govern- view that passengers could avoid security wish they hadn’t done, too. It’s a difficult for people to become American citizens – ment is contracting. It is focused on less lines and the hassle associated with con- situation for us, but we worked through it, people who want to come here and pur- margin for pure systems integration. In necting flights. I think the marketplace and I think we’re in a good spot. sue this study. This is really killing us in terms of being as grounded in some key agrees with us and that our judgment has science and technical engineering. new technologies as we need to be, we been borne out with the 787. They zigged, EB: If oil prices stay where they are now, may have gone a little bit too far there, so we zagged, and this time it turned out we does the whole “green” phenomenon we have focused on sort of a “string-of- were right. ■

Sternbusiness 27 Prospectus

National Science Foundation Awards professor of economics at Harvard University, proposes a new model of Xavier Gabaix $400,000 to Study exchange rates that combines the possibility of rare economic disasters and an Rare Disasters and Exchange Rates asset view of the exchange rate. The proposed research offers a potential way to understand the impact of exchange rate pegging and also explains how to Associate Professor of Finance Xavier detect the impact of large disasters in asset prices, which can help avert future Gabaix – recently recognized by The Economist disasters. as one of the top eight best young economists in “Although our project began before the current US market meltdown, the the world – received a $402,342 grant from the financial crisis shows that the possibility of rare disasters is actually very real,” National Science Foundation to study rare disasters noted Gabaix. “And while the crisis is unfortunate, it provides an opportunity for and exchange rates. The project, a joint effort with Emmanuel Farhi, assistant conducting useful research.”

Environmental Defense Fund’s Fred Krupp Anchors Stern’s and ethics. This year the program is focusing on the use of market-based Citi Leadership and Ethics Program approaches to address environmental challenges. Krupp keynoted the annual conference in March with a discussion on the economics and politics of “cap and Fred Krupp, head of the Environmental Defense Fund, trade” and how to leverage entrepreneurship to achieve environmental goals. was recently appointed the sixth Distinguished Citi Fellow Krupp is widely recognized as the foremost champion of harnessing market in Leadership and Ethics at NYU Stern. Stern’s Citi forces for environmental ends. He was the architect of the market-based acid Leadership and Ethics Program is made possible through rain reduction plan in the 1990 Clean Air Act – The Economist’s “greatest green the generous support of the Citi Foundation and managed success story of the past decade,” and now the model for current congressional by Stern’s Markets, Ethics, and Law Program. It represents proposals to address climate change. Krupp has broken new ground with strate- a comprehensive effort to extend the School’s longstanding gic corporate partnerships, and helped launch the US Climate Action commitment to the practice of professionally responsible business and supports Partnership, whose Fortune 500 members have called for strict limits on global the development of curricular and research innovations in the area of leadership warming pollution.

Scholar for his leadership of the next Management Society, the largest aca- officer of the Organizational Behavior shorttakes generation of marketing academics. demic society dedicated to the Division of the Academy of Robert Engle, professor of advancement of strategic management Management, the largest division of the finance and Nobel Laureate, and research. Academy. She will be the division’s Professor Nouriel Roubini, professor of eco- Professor of Finance Viral V. president from 2011-2012. of Finance nomics and international business, Acharya was recently named to the Professor of Edward spoke on several panels regarding the research advisory board of the British Marketing Tülin Altman was economy and financial institutions at Private Equity and Venture Capital Erdem has been inducted in the World Economic Forum in Davos in Association. appointed the October into January. The conference addressed the Assistant Professor of Economics next editor of the the inaugural financial crisis and ways to stabilize Laura Veldkamp was made an asso- Journal of class of the Turnaround Management and relaunch the global economy, as ciate editor for the Journal of Marketing Association’s Turnaround, well as a number of interrelated global Monetary Economics in January. Research. Restructuring and Distressed risks, including climate change, food, Assistant Professor of Information, Assistant Investing Industry Hall of Fame, and water security. Operations, and Management Sciences Professor of Accounting Daniel which honors those whose outstand- Professor of Marketing Geeta Anindya Ghose was recently Cohen joined the editorial board of the ing individual contributions have Menon was elected president of the appointed an associate editor at Journal of Accounting and Economics made a lasting positive impact on an Association for Consumer Research Information Systems Research and and has been appointed as an associate industry dedicated to stabilizing (ACR). In January, she began a three- Management Science; both are jour- editor for 2009-2011. underperforming companies, rebuild- year term on the ACR Board of nals of the IS Society. Professor of Finance Martin ing corporate value, and retaining Directors. Professor of Management and Gruber has been elected to the execu- jobs. Associate Professor of Organizations Elizabeth Morrison is tive committee of the board of directors Associate Professor of Marketing Management and Organizations Robert currently an associate editor at the of the National Bureau of Economic Vishal Singh has been named a Salomon was elected to the board (as Academy of Management Journal and Research. Marketing Science Institute Young representative-at-large) of the Strategic was elected to a five-year term as an

28 Sternbusiness Ljungqvist won the 2007 Barclays Store Price Judgments: The Role of researchroundup Global Investors Prize for their paper, Knowledge and Shopping Experience,” “The Investment Behavior of Buyout was also published in the Journal of Professor of Organizations Frances Milliken Fund Managers,” which analyzes the Retailing. In addition, her paper, Marketing and Assistant Professor of determinants of buyout funds’ invest- “Biases in Perceptions of Base Rates Susan Douglas Management and Organizations Joe ment decisions. Professor Ljungqvist for Risk: The Effect of Denominator received the Magee won the award for best also won the 2008 FMA Best Paper Salience on the Use of the Nominal Global Marketing paper at the Eastern Academy of Award in Financial Markets for his co- Rate and the Numerator to Estimate Award from the Management in May 2008 for “The authored paper, “The Value of Risk,” was published in the American Lens and Language of Power: Research,” in which he estimates the International Journal of Research in Marketing Sense-Making and Communication value added by sell-side equity- Marketing. Association’s in the Aftermath of Hurricane research analysts and explores the Professor Marketing Special Interest Group for Katrina,” which found significant dif- links between analyst research, infor- of Accounting her “lifelong dedication to global mar- ferences in how individuals con- mational efficiency, and asset prices. Stephen Ryan keting” and “significant contributions to strued Hurricane Katrina as a func- Professor of Accounting Kashi published two global marketing knowledge.” Having tion of the amount of formal authori- Balachandran won the Impact on papers, started in the 1970s, she was one of the ty they had at the time. Management Accounting Practice “Accounting In earliest researchers in international Assistant Professor of Award for his jointly authored paper and For the marketing. Management and Organizations entitled, “CEVITATM: The Valuation Subprime Clinical Associate Professor of Gonçalo Pacheco de Almeida and Reporting of Strategic Crisis” and “Characteristics of Economics Robert Wright’s book, won the distinguished paper award Capabilities,” which focuses on com- Securitizations that Determine Issuers’ One Nation Under Debt: Hamilton, of the business policy and strategy bining the tangible and intangible Retention of the Risks of the Jefferson, and the History of What We division at the 2008 Academy of assets in an organization to develop a Securitized Assets,” in The Owe, published by McGraw-Hill in Management Meetings for “Time- capability index that signifies its eco- Accounting Review. 2008, was recently named one of the Consuming Technology nomic value. Assistant Professor of top 25 outstanding academic titles in Development: How Imitation and Assistant Professor of Management Aviad Pe’er published economics by Choice: Current Reviews Spillovers Affect Competitive Information, Operations, and his co-authored paper “Do Politics for Academic Libraries, a source for Dynamics.” The research compares Management Sciences Panagiotis G. Shape Buyout Volume and reviews of academic books, electronic two technology competition regimes Ipeirotis and Associate Professor of Performance?” in the Harvard media, and Internet resources of inter- and finds firm incentives for both. Information, Operations, and Business Review. The paper shows est to those in higher education. Associate Professor of Management Sciences Foster how the political leanings of a state Assistant Professor of Information, Information, Operations, and Provost received a best paper runner- influence buyout fund activity, particu- Operations, and Management Sciences Management Sciences Arun up award at the top data-mining con- larly that Republican (red) states are Sinan Aral recently won the best Sundararajan and Gal ference, ACM SIGKDD 2008, for more favorable than Democratic (blue) overall paper award at the International Oestreicher-Singer (PhD ’08) “Improving Data Mining and Data states for buyout firms. Conference on Information Systems for received the best paper award at the Quality using Multiple, Noisy Associate Professor of Marketing the second time in three years for his INFORMS Conference on Labelers,” which examines the implica- Tom Meyvis’s paper with Leif Nelson co-authored paper, “Mining Face-to- Information Systems and tions of inexpensive micro-outsourcing of the University of California-San Face Interaction Networks Using Technology, held in October 2008, for improving data quality and data- Diego and Stern doctoral student Jeff Sociometric Badges: Predicting for “The Visible Hand of mining results. Galak (PhD ’09), “Mispredicting Productivity in an IT Configuration Recommendation Networks.” The At the fall INFORMS meeting, Adaptation and the Consequences of Task.” This is the most prestigious paper observes that while social and Assistant Professor of Marketing Sam Unwanted Disruptions: When award at the most influential informa- economic networks of various kinds Hui was awarded second prize for the Advertisements Make Television tion systems conference in the world, have historically affected purchasing 2008 George B. Dantzig Dissertation Programs More Enjoyable,” was pub- where Aral also won the best disserta- choices and demand patterns, the Award, which is given for the best dis- lished in the Journal of Consumer tion award last year. The paper bridges widespread adoption of electronic sertation in operations research and Research. two influential bodies of research in commerce over the last decade, cou- the management sciences that is inno- Assistant Professor of order to contrast the productivity effects pled with the more recent explosion vative and relevant to practice. Management and Organizations of face-to-face networking with e-mail of online social networking and Web Professor of Marketing Priya Christina Fang’s co-authored paper, networking, and establishes a novel set 2.0 technologies, have made these Raghubir’s co-authored paper, “The Near-Term Liability of of tools and techniques – based on the networks explicitly visible to con- “Customer Experience Management in Exploitation: Exploration and wearable sociometric badge – for dis- sumers and influential for product Retailing: Understanding the Buying Exploitation in Multi-Stage Problems,” covering and recording precise face-to- demand. Process,” was published in the showing that exploratory behavior has face interaction data in real world work Professor of Finance Matthew Journal of Retailing in a special issue value quite apart from its role in revis- settings. Richardson and Associate on customer experience management ing beliefs, is forthcoming in Professor of Management and Professor of Finance Alexander in retailing. Her article “Memory-Based Organization Science.

Sternbusiness 29 30 Sternbusiness ILLUSTRATION BY GORDON STUDER ILLUSTRATION MONOPOLY® MONEY A close examination of purchase decisions shows why people prefer using credit and gift cards (and just about anything) over cash.

By Priya Raghubir and Joydeep Srivastava

t has become exceedingly their purchases. Typically, consumers mode on spending behavior suggests apparent of late that credit, have the option to purchase with that the focus has been primarily on rather than money, makes the cash, a check, a credit card, or a debit the difference between credit card world go ’round – all the way card. However, other payment modes and cash payments. The phenome- Iup the line, from micro- to macro- such as bank drafts, money orders, non of higher spending when paying economics. With great interest, we set traveler’s checks, gift certificates, gift with a credit card than with cash has out to investigate the connection cards, coupons at fairs, chips at gam- been attributed to the separation in between paying in cash and paying ing houses, and stored value cards time of the purchase decision from with credit. We wanted to understand such as those used in mass transit and the actual payment – referred to as how buying with credit – which typi- tolls, etc., are quite common in the payment coupling. cally entails a time lapse between the marketplace. Some types of gift cards Payment form is another aspect purchase and the need to pay for it – are almost identical to debit cards, of the mode of payment that refers to affects how people think about and such as the American Express or Visa the differences between two mone- spend money. We also wanted to see if gift cards. Further, the advent of tary instruments that are identical in other factors influence purchase deci- Internet commerce has spurred the temporal coupling and face value sions similarly, such as using a gift growth of new payment modes such but different in terms of physical certificate rather than cash or a cred- as PayPal. appearance (e.g., $50 legal tender it card, and whether treating a gift Relatively few studies have inves- and a $50 gift certificate that can be certificate like cash and holding onto tigated differences in spending used anywhere). Relatively little it for a period of time makes any dif- behavior as a function of the mode of research has focused on spending as ference. payment. The few existing studies a function of payment form. Noting demonstrate that consumers tend to that a credit card differs from cash in Pick a Card, Any Card spend more when paying with a cred- coupling as well as form, we set up a With the proliferation of different it card than when paying by cash or series of experimental studies that payment modes in recent years, con- check, after controlling for other fac- examined consumer spending as a sumers have a wide array of payment tors. A review of the previous function of payment mode both options to choose from in making research on the effect of payment when the mode differs in coupling

Sternbusiness 31 and form (e.g., credit card versus it is labeled, money in one mental expectation of the pain of paying in cash) and when the mode differs only account is not a perfect substitute for the future, people are likely to in form, holding payment coupling money in another account – hence it is underestimate the pain and thus constant (e.g., gift certificate and not perfectly fungible. In general, spend more with a credit card than cash of equivalent value). mental accounts serve to simplify cash. financial decision-making and aid in Ignorance is Bliss making tradeoffs among different Paying the Piper The conceptual underpinning of types of spending. In addition to the difference in our research was that payment At the specific transaction level, it payment coupling across payment modes differ in transparency – which has been shown that a mental modes, we argued that payment we characterize as the vividness with account is opened and the decision to modes may also differ in terms of which individuals can feel the out- purchase is based on an evaluation of form. Consider an individual who flow of money – with cash being the the perceived benefits of consumption receives $50 either in the form of most transparent payment mode. We and the costs of payment in this par- cash or a gift card that can be argued that the more trans- used almost universally. parent the payment outflow, “Participants in one of our studies were made to Although there is no dif- the greater the aversion to ference in coupling or the spending, leading to less feel the full extent of the future pain of paying, face value of the amount transparent payment modes which attenuated the tendency to overspend when of money given (i.e., such as credit cards and gift using a credit card as compared to cash.” $50), the two payment cards (versus cash) being modes are different in more easily spent or treated physical appearance and as play or “Monopoly money.” ticular account. As discussed above, thus differ in terms of payment Further, to the extent that the trans- there is an immediate pain of paying form. In the case of credit cards ver- parency of paying affects spending that can reduce or even prevent the sus cash, the two payment modes behavior, we tested whether altering pleasure of consumption. In balanc- differ in terms of coupling as well as the salience, or significance, of parting the pleasure derived from a pur- form, whereas in the case of gift card ing with money would lessen any chase and the pain of paying for it, versus cash, the two modes differ behavioral difference across payment making the cost salient undermines only in terms of form. We argued modes. the pleasure one can derive, whereas that the physical form of the pay- Research on the cognitive psy- making the benefits salient may blunt ment mode is likely to affect pay- chology of financial behavior sug- the pain of paying. In this case, cou- ment transparency, or the vividness gests that people organize their pling – the extent to which the con- with which the outflow of money is finances around mental accounts, sumption and payment are psycho- felt. Thus, extending the reasoning which have been described as the set logically linked together due to their to different payment forms, the more of cognitive operations used by indi- proximity in time – tends to enhance transparent the payment form, the viduals and households to organize, the pleasure of consumption and higher the pain of parting with evaluate, and keep track of financial reduce the pain of paying. money, the greater the aversion to activities. Analogous to accounting It makes sense, then, that, as pre- paying, and the lower the likelihood and budgeting systems used by com- vious research has shown, consumers and level of spending. panies, individuals create separate tend to spend more when using a We investigated our hypotheses source-based expense and income credit card than when using cash, as with four groups of students. The ledgers in their mind. For example, the purchase is fully decoupled from first two studies examined whether people group and label expense the payment. By contrast, in the case consumers were willing to spend accounts separately, such as food and of cash purchases, there is a tight more when the payment mode was a entertainment, and spending is driv- coupling of the consumption and the credit card versus cash. Holding en by the available surplus or deficit payment, accentuating the pain of payment coupling constant, the in each account. Since people treat paying. Further, in balancing the second two studies examined money differently depending on how immediate gratification against the spending decisions when an equiv-

32 Sternbusiness alent amount was given “We found that any payment mode that makes the may choose to use cash either in the form of a gift for justifiable necessities outflow of money less vivid, and thus less painful, certificate or cash, so that but credit or gift cards the payment mode differed reduces the psychological barrier to spend.” for frivolous luxuries. only in form. Exploring Another relates to disen- conditions under which payment the increase in the variety of different tangling the transparency versus modes led to differences in spending payment modes in the marketplace. matching effects of credit card decisions, we were also able to exam- For example, American Express in spending for utilitarian and hedonic ine the extent to which the spending 2004 began focusing on increasing goods – the extent to which people differences across payment modes sales of American Express gift cards, may consciously match more trans- were eliminated or reduced by alter- the sales of which tripled from the parent payment forms to necessities ing the significance of parting with previous year. The Incentive or utilitarian consumption and less money in the case of credit cards and Federation Study of Merchandise transparent payment forms to frivo- gift certificates, respectively. and Travel Incentive Users found lous luxuries. Identifying the learned Our findings lent support to pre- that gift cards are commonly offered cognitive structures, or schemas, vious theories that paying for goods as incentives for salespeople (78 per- associated with different payment and services leads to an immediate cent), resellers (57 percent), con- modes is another fruitful area for pain of paying, which is balanced sumers (77 percent), and employees research. In our context, people may against the anticipated benefits of (67 percent). learn and develop schemas about the goods and services. While mak- different payment modes and how ing the benefits significant may Park Place or Boardwalk? these may aid in balancing con- somewhat blunt the pain of paying, From a consumer welfare perspec- sumption pleasure and the pain of our results suggested that payment tive, our results suggested that indi- paying. modes that are even less transparent viduals are prone to biases in spend- Future investigation of these dull the pain of paying, thus increasing when they use non-legal tender. issues could examine differences in ing the likelihood of spending. The Treating non-legal tender as play spending behavior with larger sums outflow of money is very vivid, and money leads to overspending that of money and non-student popu- thus painful, when individuals use authorities can warn consumers lations under more naturalistic cash. We found, in contrast, that any about. It has been reported that peo- conditions than the laboratory payment mode that makes the out- ple recall their cash payments better environment allowed. Further, flow of money less vivid, and thus than their credit card expenses, indi- future research could investigate less painful, reduces the psychologi- cating that the full extent of the pain whether the differences due to the cal barrier to spend. Importantly, the of paying in the future is not felt at transparency of the money also results also suggested that contextu- the time of purchase. To the extent affect differences in the likelihood al variables that make the pain of people can be made to anticipate the of spending and amount of spending paying salient serve to reduce the future pain of paying at the point of for new payment mechanisms such propensity to spend more, even when purchase, the difference in spending as prepaid stored value cards, like using a less transparent payment behavior as a function of payment those offered by American Express, mode such as a credit card. Thus, mode is likely to diminish. In the case Visa, phone companies, and many participants in one of our studies of gift cards relative to cash, frivolous retailers. ■ were made to feel the full extent of spending is more likely to occur with the future pain of paying, which a gift card than with cash. Although PRIYA RAGHUBIR is professor of attenuated the tendency to over- equivalent in face value, the intrinsic marketing and Mary C. Jacoby Faculty Fellow at NYU Stern. spend when using a credit card as difference in physical form and JOYDEEP SRIVASTAVA is associate compared to cash. appearance serves to anaesthetize the professor of marketing at the Robert H. Substantively, this research con- pain of paying. Smith School of Business, University of tributes to our understanding of There are several promising areas Maryland, College Park. individuals’ propensity to spend as a for future research around this sub- function of payment mode and thus ject. One is the extent to which people

Sternbusiness 33 Another Great Depression? A 911 call to Alexander Hamilton might be the answer

By Richard Sylla

logging their way through My answers are based less on ting down the New York Stock the latest financial crisis, comparing the current crisis to that Exchange for four months and issu- Americans from Wall Street of 1929 to 1933 than on comparing ing emergency currency to US banks to Main Street have sud- it with other serious financial crises – averted a major financial crisis Sdenly become interested in history. that did not lead to economic and, of course, a depression. Along with other financial histori- depressions. In virtually every case, There was a serious crisis with ans, I am often asked, “Is the 2007 bold leadership – sadly missing dur- many bank and business failures in to 2009 crisis the worst the US has ing the early 1930s – prevented 1907. But bold actions by the great experienced since the 1930s?” Yes, actual or potential financial melt- private banker J.P. Morgan averted it is. “Will the crisis lead to a second downs from causing depressions. depression. Morgan forced other Great Depression, in which a quar- The US might have had a serious banks to cooperate by pooling ter of American workers might lose crisis in 1914 after the outbreak of reserves to save solvent but illiquid their jobs?” I very much doubt it. the Great War in Europe led pan- banks encountering huge deposit “Could stocks again lose almost 90 icked European investors to want to withdrawals. He also bailed out an percent of their value at the peak of liquidate their large holdings of investment bank and broker by the market, as the Dow industrials American securities. But bold arranging for the sale of a compa- did from September 1929 to July actions led by Treasury Secretary ny’s securities, which the bank could 1932?” I don’t think so. William McAdoo – including shut- not liquidate in panic conditions, to

34 Sternbusiness another company in a merger. A retically, stronger federal govern- million of such domestic debt secu- short but sharp recession, not a ment in 1789. George Washington, rities were issued during Hamilton’s depression, occurred. After the the first president, chose Alexander tenure at Treasury. Hamilton bor- panic, Congress, realizing that Hamilton, his principal aide de camp rowed another $12 million from Morgan would not be around forev- during the War of Independence, to Dutch bankers to pay overdue er (he was 70 in 1907), reinstituted be the first Secretary of the Treasury. American war debts to France. a central bank by establishing the Next, Hamilton in 1791 estab- Federal Reserve. Morgan passed “Hamilton’s bold actions in a lished the Bank of the United States away in 1913. The Fed opened in financial crisis had saved the as America’s central bank. For its 1914, after McAdoo saved the day. day, and that is one reason time, the Bank was a gigantic cor- In 1825, the Bank of the United poration, with $10 million in capi- States, the early central bank led by why Americans on average tal, a fifth provided by the govern- Nicholas Biddle, prevented a finan- are 50 times richer than they ment and the rest by private cial crisis that devastated Britain, were back then.” investors, who controlled it in order America’s major trading partner, to prevent Congress from having a from spreading across the Atlantic. Hamilton knew his financial his- money-creating machine. This It did so by lending liquid US gov- tory. For a decade before he took action prompted state governments ernment securities on its balance office in 1789 his writings were pep- to charter more banking corpora- sheet to other banks under pressure pered with comments about past tions by providing them with both a so that they could borrow on the Italian, Dutch, British, and French model and a challenge: Modernize, already impeccable collateral of US financial innovations. In 1781, while or the federal government will do it government debt. The Bank also an officer in the Continental Army at for you. increased its own lending to add liq- a time when US finances were in a Third, Hamilton also in 1791 uidity to the money markets and the shambles, Hamilton wrote Robert defined the US dollar as a new banking system. Crisis averted. Morris, Congress’s newly appointed world currency in terms of specific My favorite, if little-known, finance minister, to say, “Tis by weights of gold and silver, making example of bold action preventing a introducing order into our finances – the dollar like the currencies of the major financial crisis from causing a by restoring public credit – not by leading European nations. The depression, or even a recession, gaining battles, that we are to finally specie (coined) dollar became the occurred at the very beginning of gain our object,” which was “the monetary base of the country, upon US history in 1791 and 1792. establishment of American inde- which banks issued credit money – People, including historians, tend to pendence!” bank notes and deposits convertible forget about financial crises that are Building on these insights, into the base. so boldly and well-handled that Hamilton, with the support of With these Hamiltonian financial they end quickly and have minimal Congress, embarked on modernizing innovations in place, states and pri- economic fallout. But we ought to US financial arrangements, key to vate citizens filled out the system. study and learn from triumphs as making the new republic before long The states issued charters for more well as disasters. into a major economic and political banks and other corporations. power. First, in 1790 he established Citizens applied for charters, estab- Making It New a revenue system and used revenues lished corporations, and formed First, some background. Financial it generated, as well as new loans, to markets, even stock exchanges, to innovation was in the air in the early convert the unpaid debts, national trade all the new government debt 1790s. Adoption of the Constitution and state, of the war into modern and corporate stock issues that had given rise to a new and, theo- Treasury debt securities. Some $64 appeared in the early 1790s.

Sternbusiness 35 For Americans, Hamilton had $400,000 of purchases of govern- But it was too late for gradualism created an exciting new world of ment debt to inject liquidity into the at the biggest bank, the Bank of the ample private and public credit as sinking markets of New York and United States. Having made exces- well as opportunities for investment Philadelphia. To finance the pur- sive loans and issued excessive bank and speculation. As would happen chases, Hamilton borrowed from notes, it was experiencing a steady on many subsequent occasions, it state banks in those cities, as the loss of specie reserves, which fell went to their heads. The main issue central bank had not yet opened. from $706,000 at the end of of government bonds rose from 70 Later, he repaid the loans by draw- December to $244,000 in March. to 90 (percent of par) in December ing on Dutch loans to the US. The new central bank’s private 1790, when Hamilton unveiled his The medicine worked. In less creditors were expressing their dis- plan for a central bank, because the than a month, the markets stabi- trust of its stability by asking it to bonds could be used to purchase lized, and soon government bonds convert its paper promises to specie. stock in the Bank if the plan were rose in price to pre-crash levels. The To protect itself from the drain, the enacted. It was. calm, however, proved temporary. In bank contracted its credit abruptly, January 1792, government bonds not gradually. Oops! rose from 110 to almost 130. There The abrupt credit contraction When the initial public offering were two reasons for the dramatic undercut the speculative cabal by of Bank shares took place in mid- rise. First, a cabal of New York spec- causing government bond prices to 1791, the bonds rose from 90 to ulators led by one William Duer fall, not rise. On March 8, William 110. At the same time, the rights or decided to try to corner the market’s Duer defaulted on his obligations to scripts entitling the owner to buy a supply of government bonds before repay extensive loans from his cred- full $400 bank share with install- they were needed to pay the next itors. That caused all hell to break ment payments over the next two installment, and the cabal borrowed loose in the markets. Government years rose from an offering price of from any and all sources as they exe- debt fell from 126 on March 5 to $25 in July to around $300 (imply- cuted their plan. Second, there was a 116 on the day Duer defaulted, and ing a market value of $675 for a full huge new source of credit available: then to 95 on March 20, as securi- bank share having a par value of the Bank of the United States, which ties holders rushed for the exits. The $400) over the next six weeks. Some opened in Philadelphia in December national debt lost 25 percent of its Americans were getting rich … on 1791. Immediately and rather reck- value in two weeks. Today that paper. It was heady stuff, too heady. lessly, the Bank expanded lending would be nearly $3 trillion. The market for scripts crashed in and bank note issuance. The new mid-August 1791, with $300 money was fueling a new bubble. Bold Strokes scripts plunging to between 110 and Once more Hamilton swung into 160. The crash also depressed gov- Le Plus Ça Change action. On March 19, he asked the ernment bonds by more than 10 Again Hamilton was appalled. Bank of New York to accept govern- percent in a matter of days. “These extravagant sallies of specu- ment bonds as collateral for loans, Hamilton was appalled. He lation,” he wrote in late January, “do so that panicked bondholders would wrote to his friend, Senator Rufus injury to the government and to the not dump them on the market. But King, to say that “a bubble con- whole system of public credit, by dis- it appears that the bank, looking to nected with my operations is of all gusting all sober citizens and giving its own interests, demurred because the enemies I have to fear … the a wild air to everything.” Three of the risk of taking on collateral most formidable.” Then he acted, weeks later he wrote, “Every existing that was sinking in value. Hamilton boldly. Calling a meeting of the bank ought within prudent limits to also told customs collectors they Commissioners of the Sinking abridge its operations. The super- could receive post-notes of the Bank Fund, a government authority structure of credit is now too vast for of the United States with a maxi- Hamilton had created for just such the foundation. It must be gradually mum maturity of 30 days “upon a moment, he asked his fellow four brought within more reasonable equal terms with cash” in payment commissioners to approve up to dimensions or it will tumble.” of duties due. And, using the

36 Sternbusiness authority remaining unused in 1791 And he coupled it with the offer of a damage resulted. The US economy to purchase government debt, he repo by agreeing to relieve the bank continued the expansion that began ordered open-market purchases in of any collateral it couldn’t unload. in 1790 for several years. Philadelphia. Hamilton was far ahead of his time: That appeared to disappoint The next day he reconvened the It was eight decades later that Jefferson, who redoubled his efforts Sinking Fund Commissioners to Bagehot came up with the rules that to undermine Hamilton. He wanted authorize still more open market bear his name. to stop Hamilton from turning purchases. Two of them, Virginians Americans into a nation of stock- Thomas Jefferson and Edmund Lucky for Us jobbers, speculators, factories, cor- Randolph, Hamilton’s political ene- The bond dealers of New York porations, and transportation sys- mies, resisted, and it took some time accepted the brilliant plan, collater- tems, all fueled by credit from before John Jay, another member, alizing at Hamilton’s prices and set- banks and capital markets. Better, could be summoned to join tling their debts by writing checks Jefferson thought, that Americans Hamilton and John Adams in on the resulting bank balances stick to farming. Hamilton won this breaking the deadlock. battle of titans. But he Meantime, Randolph might have lost had his changed his mind, and “The reason I do not foresee another new financial system col- further open-market Great Depression imminent is that the Fed and the lapsed upon moving from purchases commenced, Treasury have been combating the current crisis the drawing board to continuing until the cri- reality. Hamilton’s bold sis ended in mid-April. with just the sort of bold leadership and actions in a financial crisis Meanwhile, Hamilton innovative approaches to crisis management had saved the day, and made more palatable to that is one reason why the Bank of New York that Hamilton employed in 1792. Americans on average are his plan to have pan- If the Fed and the Treasury continue in this mode, 50 times richer than they icked bond dealers col- the crisis will soon be ended. …” were back then. lateralize the bonds for Back to the future. The loans instead of dump- reason I do not foresee ing them on the market. Now he set instead of by dumping securities on another Great Depression imminent the prices at which the bonds were the panicked markets. During the is that the Fed and the Treasury to be accepted as collateral for loans crisis, Hamilton urged the banks to have been combating the current and promised to take back the col- keep lending, especially to cus- crisis with just the sort of bold lead- lateral at those prices should the tomers who needed loans to pay ership and innovative approaches to bank get stuck with illiquid collater- taxes, and he promised the banks he crisis management that Hamilton al. He told the bank to charge a would let them keep the govern- employed in 1792. If the Fed and penalty rate, one percent above the ment’s money on deposit for as long the Treasury continue in this mode, customary rate, to provide the bor- as needed. the crisis will soon be ended, and rowers on bonds with an incentive These bold actions ended the with some help from the President to repay their loans as soon as pos- panic of 1792 in just a few weeks. and Congress in the form of sible when the markets stabilized. Some speculators, including Duer, increased public spending to replace Thus did Alexander Hamilton, in were ruined, as were some who had reduced private spending, the reces- the midst of Wall Street’s first crash, lent to them on promises of high sion will end well before it becomes essentially formulate Englishman returns. Duer went to debtors’ a depression. ■ Walter Bagehot’s rules for correct prison, where he was probably safer central bank behavior in a crisis: than he would have been on the RICHARD SYLLA is Henry Kaufman When no one else wants to lend, the streets of New York. The markets Professor of the History of Financial central bank should lend freely on stabilized, and government bonds Institutions and Markets and professor of good collateral at a penalty rate. rose back above par. No economic economics at NYU Stern.

Sternbusiness 37 Peer to PeerStudent Life in Washington Square and Beyond

School of Rock By Joey Schmit

MTV awards don’t usually show up on the résumés of courses in accounting and marketing have come into play most graduating business students, but NYU Stern senior when keeping the books and with all of the viral promo- and bass guitarist Michael Antonucci (BS ’09) is defying tions we’re doing.” the odds with his band, The Bride Wore Black, which Furthermore, Antonucci developed an interest in enter- recently took home mtvU’s Best Music on Campus tainment law, which sprouted after taking Professor “Woodie” award. Richard Hendler’s business law courses at Stern. “I was The Bride Wore Black beat out thousands of college really turned on to this field because it combines my busi- musicians to win the award, which is given annually to ness interests with my passion for music,” said Antonucci. the top unsigned college band in the nation – a band that “I can definitely see myself going to law school down the is expected to break through in the coming year. “We road.” were just excited to be nominated,” Antonucci admitted. As the winner of the mtvU award, the band received a “None of us were expecting to win, and we owe a lot of sponsored national college tour and a $5,000 cash prize, thanks to all of the fans who voted for us.” which they intend to put toward recording a new album. The band, formed in 2006, also includes NYU College While the band’s future is uncertain, for now, Antonucci of Arts and Science senior Sean Walsh and two students plans to continue touring and making music. from Five Towns College. After performing at smaller “The award was a great step for us toward Manhattan venues, the band gradually developed a gaining success in this business. fan base through social networks such as MySpace We’re going to give it our and by touring in the tristate area. best and see where Antonucci, who graduates this May with a dou- it takes us.” ble major in finance and accounting, credits his Stern education with giving him an advantage in the music business. “I wasn’t sure exactly what I wanted to do when I entered college, but always believed business would be a part of it,” Antonucci explained. “We are self-managed like many unsigned bands on the scene today, and the business concepts I’ve learned at Stern have really helped. My

Stern senior Michael Antonucci (right) plays bass guitar in his band, The Bride Wore Black, which recently won mtvU’s Best Music on Campus “Woodie” award (left).

38 Sternbusiness Marketing Dogma By Rika Nazem

Marketing Professor and Department Chair Russell Winer posed an interesting case to his Executive MBA class: Given the difficulty of recruiting Catholic priests today, devise a marketing strategy using Top photo: Students (on left and right) in Professor Russell Winer’s (center left) marketing class heard from Father Luke Sweeney (center right) about the Archdiocese’s marketing campaign to attract new priests. new media to attract and recruit 18- to 22-year-old males to the profession. “This is a unique case working sites more study and a difficult marketing problem – one that we interactive while don’t typically study and something I knew my students linking to as many would love to tackle,” he explained recently. religious/priest/ Students were assigned to analyze the original catholic communi- Archdiocese of New York case study from the 1970s as ty user groups as well as the Archdiocese’s current marketing campaign. The possible.” class heard from the Archdiocese’s Father Luke Sweeney Barclay and about the parish’s marketing efforts and recruiting chal- Granata agree lenges. “It was incredibly valuable to have Father Sweeney that studying in the discussion,” said Sam Barclay (MBA ’10), and a marketing chal- member of the class. “It is one thing to discuss a business lenges like the problem in the abstract; it’s a completely different thing to Archdiocese’s are have the person who is faced with the challenge right there critical to tie aca- in the class debating the approaches to the problem.” demic learning to In addition to reading the case study and talking to real-world situa- Father Sweeney, students evaluated the organization’s web- tions. Barclay site and assembled their own focus groups, including sev- noted, “A case eral young men currently attending the Naval Academy, to like this is great get a sense of what drew those applicants to make a simi- stimulus for dis- lar type of long-term commitment and if there were differ- cussion and ences in the decision-making process. Barbara Granata debate, and pro-

(MBA ’10), another student in the class and a marketing vides the class an Students examined the Archdiocese’s marketing campaign manager for an investment firm, explained her group’s rec- opportunity to from the 1970s that included ads like the above, which was ommendations: “We learned that the decision to become a help solve a real- rated the most effective ad of the campaign. priest usually starts early in a man’s life and is positively world business challenge.” Granata added, “One of my influenced by a religious role model. Catholic mentors are biggest take-aways from the class is how important it is to increasingly scarce, however, so we recommended they do market research early on to understand your target send more young priests out to visit Sunday school classes market and define your value proposition. I was able to and interact personally with young people in the elemen- take back many of the tools I learned in class and imple- tary and middle school age demographic who may not be ment them immediately in my role at the investment man- following the traditional Catholic school education path. agement firm. Our senior portfolio managers have now We also recommended they increase their Internet traffic started saying for the first time, ‘What’s our value propo- by adding search terms to browsers that would drive more sition?’ when we discuss marketing approaches to differ- people to their existing website, and make their social net- ent client segments. It is hugely gratifying.”

Sternbusiness 39 ALUMNI AFFAIRS Alumni News & Events

1. Alumni and guests enjoyed a festive holiday evening in one of New York City’s most esteemed landmarks, the Rose Center for 2008 ALUMNI BALL Earth and Space at the American Museum of Natural History. 2. From left to right: Molly Meek (MBA ’04), Chair, Alumni Ball Host Committee; Thomas F. Cooley, Dean; William R. Berkley (BS ’66), Chairman, Board of Overseers; and Sally Blount, Vice Dean and Dean of the Undergraduate College, at the Alumni Ball.

3. Members of the 2008 Alumni Ball Committee helped plan the event.

4. From left to right: Sally Ackerman, Shelly Greenbaum (BS ’71), Joel Shapiro (BS ’71), and Susan Greenbaum (BS ’71, MBA ’78), Associate Dean of the Undergraduate College, visit with each other.

5. From left to right: Peter Weisberg (MBA ’90), Chair, Alumni Council Regional Leadership Committee, traveled from Florida to attend the annual tradition with friends Sandra Baker Zarraga (BS ’00) and Michael Zarraga.

6. Reginald Ferguson (BS ’90), Alumni Council member, caught up with Robert Hill (BS ’73).

1 7 - 14. Alumni celebrated the chance to reconnect with each other.

2 3

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8 9

11 12 13 14

40 Sternbusiness In This Weak Economy, Alumni Connections are Stronger Than Ever

David Fass (MBA ’89) (center left), Managing Director and Head of Global Banking in Europe, Middle East, and Africa at Deutsche Bank, and Akbar Poonawala (MBA ’86) (sixth from the left), Managing Director and Head of Global Equity Services at Deutsche Bank, welcomed Dean Thomas F. Cooley (center) to a breakfast for Stern alumni at the firm’s London office in November.

In the wake of the economic turbulence, Stern alum- Corporations remained some of the School’s greatest ni discovered the advantages of being involved in and partners, and the alumni network was found to be par- investing in the Stern community. ticularly relevant when leveraged within an In the fall semester alone, the number of Stern alum- alumnus/a’s own company. Many of Stern’s top corpo- ni in the LinkedIn network reached nearly 6,000, rate partners have hundreds of alumni within their almost 9,500 alumni updated their contact information, ranks who came together to promote and advance the and Stern’s faculty, at the forefront of the discussion on strength of their networks, including American the economy, were quoted in the press providing expert Express, Deutsche Bank, Ernst & Young, and IBM. commentary in more than 2,700 stories. Stern alumni, regardless of their distance from The Career Center for Working Professionals Washington Square, found meaningful ways to recon- (CCWP) increased their offering of lifelong career nect and strengthen the network. To learn more about resources to support alumni, including individual career how you can re-engage with the community, take counseling with self-assessments, résumé reviews, and advantage of the CCWP, or find a regional group, visit mock interviews. More than 200 alumni came back to www.stern.nyu.edu/alumni. To access and/or submit job campus to attend events and professional development opportunities through the online Stern recruitment sys- workshops, and more than 950 job postings were made tem, visit www.stern.nyu.edu/ocd/recruitingsystem. available to the community.

You Asked… We Listened… other online social networking sites such as Facebook, LinkedIn, and Based on feedback from the alumni community, SWAP, the online MySpace; the option to subscribe to RSS feeds; a search tool to find your alumni community, is being replaced by an entirely new, robust platform. friends and classmates; a comprehensive calendar of events and RSVP tool; The School has dedicated resources, including the Technology Task a way to manage your profile, including the ability to update your contact Force of the Alumni Council, to develop a new online networking tool. information; and exclusive career resources. The revitalized online community will feature new ways to link to Exciting updates will be provided in the coming months.

Sternbusiness 41 The Gift of Giving Virtual Stern

Investing in education is one Don’t miss out on the dynamic and innovative content-driven programming delivered by our faculty and their peers – represent- of the soundest financial coming some of the nation’s most pre-eminent thought leaders. mitments one can make, espe- If you are not able to attend events on campus, many are now cially in these uncertain econom- available as webcasts, including the recent conference, “Restoring ic times. With the turn in the Financial Stability: How to Repair a Failed System,” and our signa- economy proving to be a hard- ture Market Pulse Series, panel discussions with our world- ship for many families, the cost renowned faculty, career development workshops, and interviews of college is a burden on many with the world’s top CEOs. Webcasts can be found online at people’s minds. As a result, www.stern.nyu.edu under “News and Awards.” In addition to programming offered on Stern’s campus, nearly 50 percent of undergrad- Alumnus Shelley Greenhaus generous- there is a strong network of regional groups and programming. uate Stern students applied for ly funded the Kennish Scholarship, For a comprehensive listing of upcoming events, please visit aid this year, and scholarships, making a Stern education possible for sophomore Daniel Lynch, III. www.stern.nyu.edu/alumni/events. especially, are now needed more than ever. Scholarships play a critical role in enabling the School to attract and retain the highest-quality students regardless of their economic situation. For sophomore Daniel Lynch, III (BS ’11), receiving the Kennish Scholarship, generously funded by alumnus Shelley Greenhaus (MBA ’78), Principal, Whippoorwill Associates, Inc., offered him the opportunity of a lifetime – a chance at an education that might have other- wise been unattainable. “I wanted to attend Stern so that I could collaborate with the future leaders of tomorrow,” Lynch said. The Undergraduate Class of 2003 enjoyed cocktails and conversation at their five-year reunion reception. Thanks to the Kennish Scholarship, Lynch has been able to fully immerse himself in Stern’s international Mark Your Calendars for NYU Alumni Day 2009 curriculum, participating in the World Studies Track, Join fellow alumni at the next NYU Alumni Day on October 3, 2009. an integrated program featuring a combination of For the seventh year in a row, alumni are invited to reunite with fel- coursework and study abroad experiences in key global low classmates during an exciting day of programs showcasing marketplaces of the 21st century. He has spent this aca- some of NYU’s most dynamic and innovative faculty and alumni, demic year engaged in international study. school-specific dean’s luncheons, and evening festivities. “Investing in scholarships has been a rich and rewarding Attention classes of ’99 and ’04! NYU Stern will host both experience,” Greenhaus, a loyal supporter of the School, undergraduate and MBA five- and 10-year reunion receptions in con- explained. “Helping the younger generation obtain a junction with Alumni Day. Mark your calendars and stay tuned – global business education ensures the future success of additional information will be released in the coming months. our society and leaves a lasting legacy for the School.” “I hope to one day achieve the success Mr. Greenhaus Update Your E-mail Address has so that I can continue this tradition,” Lynch shared in expressing his gratitude. “I wish there were some way In an effort to be more environmentally-friendly and fiscally responsible, many of the School’s communica- that I could adequately thank him for keeping my tions are now sent via e-mail. Don’t miss out on impor- hopes alive and the fire of my intellect ablaze.” tant information from Stern. Update your contact infor- If you would like to learn more about making a dif- mation by calling (212) 998-4040, visiting the website ference in the life of a student, visit the Office of at www.stern.nyu.edu/alumni, or sending an e-mail to Alumni Relations & Development website at [email protected]. www.stern.nyu.edu/giving or call (212) 998-4161.

42 Sternbusiness In this increasingly integrated world, business and ideas have no boundaries. NYU Stern’s presence in the world is powerful, giving its alumni, students, and faculty access to meaningful global networking opportunities and intellectual engagement with people and ideas beyond our New York City campus. The NYU Stern Global Alumni Conference tradition is a pillar of the School’s commitment to celebrating our global presence and fostering our international alumni network.

This June, join us for an exclusive weekend of educational and cultural experiences in Barcelona, Spain.

ENGAGE in forward-looking panel discussions with leading faculty. NETWORK with hundreds of fellow alumni and senior business leaders from around the world. CELEBRATE NYU Stern’s global presence and community.

Featuring panel discussions with faculty greats Thomas F. Cooley, Sally Blount, Edward I. Altman, Al Lieberman, Roy C. Smith, and Marti Subrahmanyam on: • Independent Film: The Growth of Global Cinema; • Restructuring and the Credit Markets in 2009 – 2010; • Family Business in the 21st Century: An Anachronism or an Institution for Economic Growth and Stability?; • Architecture & Urban Development as Engines for Economic Growth.

With remarks by: • Jordi Hereu i Boher, Mayor of the City of Barcelona; • Juan María Nin, CEO of La Caixa; • Alfredo Sáenz, CEO of Banco Santander; • Michael Barker, Co-President and Co-Founder, Sony Pictures Classics; and more. june 11-13, 2009

Please visit www.stern.nyu.edu/barcelona2009 or call +1 212-998-4040 for more information. classnotes Send us your news, update your contact information, and access the contact information of your fellow alumni through SWAP, Stern’s online alumni community, at www.stern.nyu.edu/alumni.

Chairman Emeritus of Finlay Enterprises, a also chair its audit committee. Griffin is cur- Schonbraun McCann Group is the real 1940s nationwide leased fine jewelry company. rently a Director of Enherent Corp, a New estate practice of FTI Consulting, Inc., a Gerald Fisher (BS ’40), of New York, NY, York-based public company in the informa- global business advisory firm. recently served as a mentor in the Business Howard B. Katz (BS ’63), of Spring tion technology service and solutions field. Plan Competition at the Berkley Center for Valley, NY, has been named an independent Arlen H. Kantarianin (MBA ’78), of Entrepreneurial Studies at NYU Stern. Fisher, member of the Board of Directors of Patient Joseph Haskins, Jr. (MBA ’75), of New York, NY, was featured in now retired, was President and CEO of the Access Solutions, Inc., a provider of health- Baltimore, MD, was elected to the Board of BusinessWeek’s “The Power 100,” a rank- Arch Bilt Container Corp and the Energy care/financial processing solutions. Katz is Directors of Baltimore Gas and Electric ing of the most influential people in sports. Recycling Corp. the CEO and a member of the Board of Company (BGE) as an independent director. Kantarianin is CEO of the United States Directors of MDwerks, Inc. He is also the He is Chairman, President, and CEO of The Tennis Association. Nicholas L. Heiny (BS ’41), of Fort CEO and Director at MDwerks, Inc.’s wholly Harbor Bank of Maryland, and is also one of Wayne, IN, was recently honored by the Allen owned subsidiary, MDwerks Global the bank’s co-founders. Richard E. Khaleel (MBA ’78), of New County Council on Aging for his dedication Holdings, Inc. York, NY, was appointed Executive Vice to seniors of Allen County. He was also hon- William J. Pesce (MBA ’75), of Basking President of the financial services division ored by the Alumni Association of the South J. Albert Smith Jr. (MBA ’68), of Ridge, NJ, has been elected Vice Chairman of Nielsen IAG. Khaleel was previously Side High School, Fort Wayne, IN, where he Indianapolis, IN, has been appointed of the Board of Directors of William Paterson Executive Vice President and CMO at The received the Distinguished Alumni Award and Chairman of the St. Vincent Indianapolis University, his undergraduate alma mater. Bank of New York. was recognized in the school’s Hall of Fame. Hospital Board of Directors. Smith is Pesce, who is a member of Stern’s Board of President of JPMorgan Chase in Central Overseers, is President and CEO of John Jonathan D. Spaet (BS ’78, MBA Adrian S. Price (BS ’49), of Boynton Indiana. Wiley & Sons. ’79), of New York, NY, was appointed Beach, FL, published his book, Gentleman Executive Vice President, US Sales, a newly from Boynton B-Y-T-E-S Back, which com- Philip M. Skidmore (MBA ’69), of David L. Shedlarz (MBA ’75), of New created position at Vault.com, Inc. Spaet prises a series of print columns and humor- Riverside, CT, has joined the Board of the York, NY, has been appointed to the Board of was formerly Vice President and General ous commentaries. OPEB Trust Fund of Greenwich, CT, which Directors of the Hershey Company. Shedlarz Manager of Advertising Sales at Time provides medical coverage for retired Town is a member of the TIAA Board of Trustees, Warner Cable. 1950s of Greenwich employees. Skidmore is as well as the Board of Directors of Pitney Gerard A. Bongiovanni (BS ’50), of Chairman and Chief Economist at Belray Bowes, Inc. Allen Adamson (MBA ’79), of New Augusta, GA, a Naval Veteran of World War II, Asset Management. York, NY, recently published his second was selected by the Richmond County Yvonne Davies Tropp (MBA ’75), of book, BrandDigital: Simple Ways Top Historical Society to share his WWII experi- Mamaroneck, NY, was honored by the Brands Succeed in the Digital World. Based ence via DVD, a copy of which will be sent to 1970s Mental Health Association (MHA) of on more than 100 interviews with top the Library of Congress. Bongiovanni, now Fred S. Zeidman (MBA ’70), of Westchester for her dedication to her com- branding executives, the book demon- retired, was Vice President of Surgicot, a Houston, TX, has been appointed to the munity, to MHA, and to MHA’s Court strates how leading brands are embracing Squibb Company. Board of Directors of SulphCo, Inc., a tech- Appointed Special Advocates program. digital technology while staying true to nology company with a patented ultrasound basic branding principles, and it describes Charles B. Rangel (BS ’57), of New York, process to desulfurize crude oil. Zeidman Richard B. Berger (BS ’76), of Clifton, how brands succeed in the digital world in NY, was listed as one of Accounting Today’s currently serves as interim President for VA, has been promoted to Vice President of the same straightforward manner of his first Top 100 Most Influential People of 2008. Nova Biosource Fuels, Inc., and is also The Segal Company, a leading independent book, BrandSimple: How the Best Brands Rangel is a member of the US House of Senior Director for Governmental Affairs at firm of benefit, compensation, and human Keep it Simple and Succeed. Adamson is Representatives from the 15th Congressional Greenberg, Traurig’s Washington, DC, law resources consultants. Berger joined The Managing Director of the New York office of District of New York. office. Segal Company in 1997 as a benefits con- Landor Associates. sultant. A. George Cero (BS ’59), of New York, Andrew J. Barile (MBA ’72), of Rancho Linda S. Jackson (BS ’79), of Brooklyn, NY, has been elected President of the Santa Fe, CA, has been elected to several Richard A. Lorraine (BS ’76), of NY, has been appointed acting Associate International Precious Metals Institute and re- boards, including the Board of Directors of Jonesborough, TN, has been elected to the Provost of the City University of New York’s elected Chairman of the Commodity Floor Park Insurance Company. He recently start- Board of Directors of PolyOne Corporation, Medgar Evers College. Jackson is currently Brokers and Traders Association. Cero is cur- ed Harbor Global Capitol Advisors, LLC. a global provider of specialized polymer Associate Professor of English and has rently Senior Vice President at RBC Wealth materials, services, and solutions. Lorraine served as Deputy Chair of the English Management. Jim Apostolides (MBA ’74), of Garden recently retired as Senior Vice President and department and as Coordinator of City, NY, has joined Needham & Company, CFO of Eastman Chemical Company. Composition. LLC, a privately held, full-service invest- 1960s ment bank, as Managing Director in the William C. Denninger (MBA ’77), of Terrie C. Reeves (MBA ’79), of Sun David B. Cornstein (MS ’63), of New Mergers & Acquisitions group. Most Stamford, CT, assumed the role of Senior Prairie, WI, has joined the University of York, NY, has been appointed by New York recently, Apostolides was Managing Vice President, Finance, of Kaman North Carolina-Greensboro’s Bryan School Governor David Paterson as a member of the Director at Citigroup. Corporation. Denninger most recently served of Business and Economics as Associate Board of Directors of the New York City Off- as CFO of Barnes Group, Inc. Professor of Health Care Administration. Track Betting Corporation and has also been Faith Griffin (MBA ’74), of Sarasota, FL, She will be the first faculty member in designated as the Chair of the Board, a posi- has been appointed to the Board of Mark E. Chertok (BS ’78), of East Hills, healthcare administration at the Bryan tion he previously held in 1994. Cornstein is Directors of Coda Octopus Group, Inc., an NY, has been appointed by the Schonbraun School. Previously, Reeves was Assistant currently President of Pinnacle Advisors Ltd., underwater port security and marine survey McCann Group as Senior Managing Director Professor at the University of Wisconsin- a consulting and advisory firm, and serves as technology development company; she will leading its Financial Outsourcing group. The Milwaukee’s Lubar School of Business. 44 Sternbusiness Christine Lindahl Reilly (MBA ’79), Audrey A. Appleby (MBA ’81), of of Berkeley Heights, NJ, has been honored Greenwich, CT, is opening MagicDance A Global Zythologist as one of the Top 25 Nonbank Women in Toddler Studio of Arts and Letter, a new Finance by US Banker Magazine. Reilly is preschool in Greenwich, CT. Appleby is President of CIT Small Bank Lending. the owner of the MagicDance-on-the- “I always had the desire to learn in Water studio, also in Greenwich. an unusual way, with a global slant,” Marion E. Sherman (MBA ’79), of said Chris Burggraeve, Chief Marketing London, OH, has been appointed Medical William R. Hannan, Jr. (BS ’81), of Officer at Anheuser-Busch InBev. Director for the Ohio Department of Mental Manhasset, NY, has joined Morgan Burggraeve, who believes that every- Health. Sherman currently serves on the Keegan as Vice President, Municipal Sales thing is international in scope, always faculty at both The Ohio State University for New York. Hannan was most recently wanted to study and build a career School of Medicine and The Ohio Vice President in institutional sales with internationally. So, when NYU Stern, University College of Osteopathic J.P. Morgan. Medicine. HEC Paris, and the London School of Lisa A. Scalia-Desmoine (MBA ’81), Economics and Political Science estab- of Summit, NJ, has been appointed lished a joint MBA program, Burggraeve 1980s Second Vice President and ERISA lasered right onto the opportunity. Now, Ellen D. Fein (MBA ’80), of North Hills, Consultant with New York Life Retirement having lived in Berlin, Brussels, Chris Burggraeve (MBA ’05) NY, recently married Lance Houpt. Fein is Plan Services. Dusseldorf, Istanbul, North Carolina, co-author of The Rules: Time-Tested Paris, Prague, and Vienna, he has achieved his dream. Secrets for Capturing the Heart of Mr. William F. Spengler, III (MBA ’81), Burggraeve was drawn to the TRIUM Global Executive Right and The Rules for Marriage: Time- of Cambridge, MD, has been named Tested Secrets for Making Your Marriage Executive Vice President and CFO of MBA program after reading about its unique curriculum in an Work. Smith & Wesson Holding Corporation, the advertisement in the Financial Times. The program enabled parent company of the weapons manufac- him to take advantage of three schools, each a renowned cen- Anthony S. Glickman (MBA ’80), of turer Smith & Wesson Corp. ter of expertise: Stern in finance, the London School of Teaneck, NJ, has been appointed Global Economics in the socioeconomic sciences, and HEC Paris in Head of Risk Services with GlobeOp Steven R. Brown (BS ’82, MBA ’89), Cartesian mathematics. He found Stern to be the most chal- Financial Services. Glickman also joined of Short Hills, NJ, has been named Vice lenging academically. “The level of [education in] finance was GlobeOp’s operating committee. President and Senior Portfolio Manager for the American Century Real Estate very rigorous,” he recalled. He was inspired by how much the David P. Jacob (MBA ’80), of Great Fund. Previously, Brown served as courses pushed students with 15 years of experience out of their Neck, NY, has been appointed as Executive Neuberger Berman’s Global Head of Real comfort zones. “Professors such as Aswath Damodaran and Managing Director and Head of Structured Estate Securities. Paul Brown made the program very personalized and forced Finance Ratings for Standard & Poor’s. you to walk in your competitors’ shoes.” Most recently, Jacob was a principal with Gregory C. Carey (MBA ’82), of Burggraeve joined InBev, which recently merged with Adelson & Jacob Consulting. Clarksville, MD, was featured in Anheuser-Busch, after more than 12 years with The Coca-Cola BusinessWeek’s “The Power 100,” a rank- Company, where he last served as Group Marketing Director for Patrick J. McMullan (BS ’80), of New ing of the most influential people in York, NY, has announced the launch of sports. He helped finance construction of the European Union. Previously, he worked for Procter & PMc, a luxury fashion magazine available the new Yankee Stadium. Carey is Gamble Benelux in Brand Management and Innovation, a nat- exclusively to iPhone users, in partnership Managing Director at Goldman Sachs. ural progression from earlier jobs in consulting and technology with a new media company. startup companies. Burggraeve has maneuvered his career in Edward P. Gilligan (BS ’82), of an increasingly global context and attributes his success to his Jane Dresner Sadaka (MBA ’80), of Brooklyn, NY, has been appointed to the finance-driven marketing approach. “The type of marketer New York, NY, has been appointed to the Board of Directors of Concur, a provider of that I believe in is a person who understands finance – an indi- Board of Directors of New Media Lottery on-demand employee spend management vidual with a balanced perspective,” he said. Services PLC, a gaming content and sys- services. Gilligan is Vice Chairman of tems provider, as Non-Executive Director. American Express Company and also a Burggraeve now has the opportunity to unify the brands of Sadaka is a retired partner of Kellner DiLeo member of its operating committee. two of the world’s leading brewers. “We aspire to become the & Co., an investment firm. She is also a best beer company in a better world,” he said, “a world in member of NYU Stern’s Board of Andrew L. Goodenough (MBA ’82), which a brewing company can use its resources to drive respon- Overseers. of Rye, NY, has been named President and sible consumption and environmental sustainability.” CEO of Summit Business Media. Learning about different people and cultures is a passion as Jeffrey A. Tannenbein (BS ’80, MBA well as a profession for Burggraeve. And when he is not travel- ’86), of New York, NY, has been appointed Sanford G. Hausner (BS ’82, LLM ing, he finds many moments to enjoy his favorite pleasures: hav- CFO at International Derivatives Clearing ’87), of New York, NY, has joined Arent Group, LLC, a central clearinghouse to Fox LLP as Partner in its New York office. ing increasingly philosophical conversations with his 13-year-old clear and settle interest rate swap con- daughter, running, and relaxing with an ice-cold Stella Artois. tracts. Previously, Tannenbein served as Lawrence Kneip (MBA ’82), of “If you have the chance, go and discover the world – work Global Business Manager of the Wyckoff, NJ, has been appointed Small abroad if you have the opportunity,” he advised. “And, as you Technonolgy and Operation Group at Business Administration Director and Vice do, explore the beers that go with it – become a global zythol- Deutsche Bank. President at Indus American Bank. ogist – a true beer connoisseur.”

Sternbusiness 45 classnotes

Pharmaceutical Development at Cypress Creating a Triple A-Rated Career Bioscience, Inc.

When Maria Pierdicchi arrived in New York from Milan as a David P. Gurwitz (MBA ’84), of Monsey, visiting student in the doctoral program at NYU Stern, she had NY, has recently released his first album, “Hear the Children,” a collection of piano solos. little inkling she would end up a powerhouse in finance. Over the next two decades, she started a high-growth equity market at the Stelios Papadopoulos (MBA ’84), of Great Italian stock exchange, won the international Bellisario Award Neck, NY, has been appointed to the Board of for distinction in business, and organized women’s networks in Directors of Regulus Therapeutics LLC, a joint banking to encourage other women to follow in her footsteps. venture between Alnylam Pharmaceuticals, Inc. Pierdicchi came to Stern as a researcher in financial institu- and Isis Pharmaceuticals, Inc. formed to discover, develop, and commercialize microRNA- tions with a degree in economics, after completing a short con- based therapeutics. Papadopoulos retired as sulting stint at the World Bank. While she found research inter- Vice Chairman of Cowen and Company, LLC esting, she knew she wanted to expand her experience, and in 2006. thought that Stern would be an ideal place to do it. At her home Jerry F. Barbanel (BS ’85), of Tenafly, NJ, Maria Pierdicchi (MBA ’88) institution, Bocconi University, studying abroad was not encouraged. “At that time,” she recalled, “not many students went has been appointed President and CEO of Precision Discovery, a provider of IT risk and abroad. They thought I was not using my time wisely.” litigation consulting solutions. Barbanel joins Once at Stern, she was quickly intoxicated by the thrill of Wall Street. “In New York, you Precision Discovery from Aon Consulting, were in the center of it all,” she said. Pierdicchi realized she wanted to strengthen her back- where he served as Executive Vice President ground in finance and became attracted to the “more pragmatic” approach of an MBA edu- for the financial advisory and litigation con- cation. Transferring from the PhD program, she delved into an MBA in finance and soon sulting services practice. became impressed by her fellow students, who hailed not only from the US, but also from Sharon Sabba Fierstein (MBA ’85), of Italy, Spain, South America, and Israel, and “brought a lot of experience from the streets. It Woodbury, NY, has been appointed to the was very interesting to me.” After graduating, Pierdicchi joined the private sector, first at Public Company Accounting Oversight Board’s Citibank in Italy and then at Premafin SpA, where she focused on investor relations. 2009-2010 Standing Advisory Group. Fierstein In 1998, as the stock exchange in Milan was privatized for the first time, Pierdicchi is currently Partner in Marks Paneth & Shron seized a new opportunity there. She designed and launched Nuovo Mercato, which she LLP’s Litigation and Corporate Financial described as “an Italian version of NASDAQ,” an extremely successful project that she man- Advisory Services Group. aged for five years through the heady climate of the late 1990s technology boom. In 2003, Gary Katcher (MBA ’85), of Port St. Lucie, she moved on to her current position in an American company, as the Managing Director FL, has been appointed Senior Managing and Country Head for both Italy and Spain at Standard & Poor’s, which provides rating and Director and Head of Global Institutional Fixed investment services. Income of Knight Libertas LLC, an institutional Pierdicchi has expertly navigated her career, although, she acknowledged, “It was chal- fixed income broker-dealer. Katcher is the founder of Libertas Holdings, LLC, a boutique lenging to be a woman in finance in Italy.” Despite an atmosphere keyed to loyalties and institutional fixed-income brokerage firm that “not so open to women in senior positions,” she has advanced based on her accomplish- was acquired by Knight Capital Group, Inc. ments. Early in her career, she was often in the office until 9:30 pm. Now she finds more balance. Describing herself as “a curious person,” she reads everything from literature to Christianna Wood (MBA ’85), of psychology to the latest in business. She also enjoys playing sports. With all this, she even Sacramento, CA, has been named to the Board finds time to reconnect with her fellow Stern alumni, most recently by serving on the host of Directors of H&R Block. Wood is the CEO of Capital Z Asset Management. committee for the upcoming global alumni conference in Barcelona, which will convene an extended community that is most fortunate to count her in its ranks. Deborah Foye Kuenstner (MBA ’86), of Newton, MA, has been named Chief Kevin J. Bannon (MBA ’83), of Mount Inc. formed to create profitable customer- Thomas L. Tran (MBA ’83), of Investment Officer of Wellesley College, her Kisco, NY, has been appointed to a newly- focused organizations. Before joining Zep, Weatogue, CT, was named Senior Vice undergraduate alma mater. created directorship on the Board of Urstadt O’Brien was Vice President of Sales and President and CFO of WellCare Health Biddle Properties Inc. Marketing at Atlas Paper Mills. Plans, Inc, a provider of managed care Peter A. Kyviakidis (BS ’86), of Milford, services. PA, has joined LECG, a provider of independ- Geoffrey Colvin (MBA ’83), of Fairfield, Lauren D. Rich-Fine (MBA ’83), of ent testimony and strategic advisory services, CT, recently published a book, Talent is Cleveland, OH, has been elected to the Board Stephen M. Coutts (MBA ’84), of as Managing Director. Kyviakidis will focus his Overrated. Colvin is a writer at Fortune of Directors of Dolan Media Company and Rancho Sante Fe, CA, has been appointed practice on forensic accounting and financial magazine. also appointed to the company’s compensa- CEO, President, and Director of Biocept, advisory consulting services. tion committee. She is currently a practitioner- Inc., a biotechnology company that engi- Joseph G. O’Brien (BS ’83), of in-residence at Kent State University’s College neers solutions that provide the foundation Dorothy S. Pisarski (MBA ’86), of West Delafield, WI, has been appointed President of Communication and Information and serves for a new class of diagnostic assays. Des Moines, IA, received the Distinguished of Zep East, a market-faced business Zep as Research Director for ContentNext. Coutts was most recently Director of Advertising Educator of the Year Award for the

46 Sternbusiness Ninth District of the American Advertising Debra Sandler (MBA ’88), of Yardely, Managing Director at UBS Limited in Convertible Research at Credit Suisse. Federation. Pisarski is Assistant Professor of PA, has been named the 2008 Black London. Advertising at Drake University. Enterprise Corporate Executive of the Year. Kee-Meng Tan (MBA ’91), of New York, She is the Worldwide President of McNeil Craig T. Shepherd (BS ’89, MFA ’97), NY, has been appointed to the newly-created Jon W. Anderson (MBA ’87), of Madison, Nutritionals L.L.C., a healthcare and beauty of New York, NY, was recently married to position of Managing Director, Head of the NJ, has been appointed Global Head of Over- products company, part of Johnson & Marlene Kandler in Chicago. Shepherd is electronic trading group in Europe, with the-Counter Derivatives for GlobeOp Financial Johnson. the Executive Producer of “Home Made Knight Capital Group, Inc. Knight Capital Services. He will also join GlobeOp’s Simple” on the TLC cable network. He was Group, Inc. is a capital markets firm that pro- Operating Committee. Previously, Anderson Mark R. Zygaj (MBA ’88), of East also the Line Producer of “Girlfight,” the vides electronic and voice access to the glob- served as Managing Director of Trading Amherst, NY, has been elected to the Board winner of a Grand Jury Prize at the al capital markets across multiple asset class- Technologies at BlueMountain Capital of Directors of the National Association of Sundance Film Festival in 2000. es for buy-side, sell-side, and corporate Management. Specialty Health Organizations. Zygaj is the clients. COO and Director of Palladian Muscular Ted A. Berenblum (MBA ’87), of Cos Skeletal Health, a benefits management 1990s Neeraj K. Vohra (MBA ’91), of Cob, CT, has been named Head of Alternative organization. Nicholas S. Cyprus (MBA ’90), of Alexandria, VA, has joined Signal Hill, a Investments, a newly created position, for BNY Scotch Plains, NJ, was inducted into the Baltimore-based specialty investment bank- Mellon Wealth Management, a wealth and Habib P. Achkar (MBA ’89), of London, Pinnacle Alumni Society by Fairleigh ing, research, and institutional brokerage investment management business of The Bank England, has been appointed CEO of Dickinson University College at Florham in firm, as Managing Director. Prior to joining of New York Mellon Corporation. Morgan Stanley Saudi Arabia. Achkar was Madison, NJ. Cyprus is Controller and Chief Signal Hill, Vohra was Managing Director in formerly Morgan Stanley’s Head of Sales Accounting Officer for General Motors the Technology Investment Banking Group at John A. Kritzmacher (MBA ’87), of Far and Trading for France; he has worked at Corporation. Friedman, Billings, Ramsey & Co., Inc., a real Hills, NJ, has been appointed CFO and Morgan Stanley since 1989. estate investment trust that invests in mort- Executive Vice President of Global Crossing, Ira S. Fishkin (MBA ’90), of Mahwah, gage-related assets. which provides telecommunications solutions Christopher M. Czaja (BS ’89, MBA NJ, has joined Eisai Corporation of North over the world’s first integrated global IP- ’97), of New York, NY, has been named America as Associate Director of Facilities David Yaudoon Chiang (BS ’92), of based network. Executive Vice President of Insight and Administration. Prior to joining Eisai, Brooklyn, NY, has been appointed to the Investments Corporation, an independent Fishkin worked at Hertz Corporation as Board of Directors of the American Lorain Kathleen G.R. Madigan (MBA ’87), of leasing agent of IT and medical equipment. Director of Corporate Engineering. Corporation, an international packaged foods Bensalem, PA, has joined the Dow Jones company based in China’s Shandong Newswires editorial team as an economics Tina L. Fiumenero (BS ’89), of Charles-Henry Choël (BS ’91), of Paris, province. Chiang is currently a managing writer; she will also write its “Big Picture” col- Princeton, NJ, has been promoted to CFO France, was promoted to Global Head of director overseeing alternative energy, tech- umn. Previously, Madigan was Senior Writer of Vitae Pharmaceuticals, Inc., an emerging Trading Solutions with GL TRADE, a global nology, and China banking efforts at and Market Analyst with Lord Abbett, an inde- pharmaceutical company dedicated to the provider of multi-market and multi-asset Northeast Securities, Inc., a multi-line finan- pendent money management company. discovery and development of innovative solutions for international financial institu- cial services firm. small molecule medicines. Fiumenero tions. Choël joined GL TRADE in 2002. Al Sapienza (BS ’87), of West Hollywood, joined Vitae in January 2006 as Senior Since 2006, Choel has been Deputy CEO of Robert H. Getz (MBA ’92), of Salt Lake CA, was recently married to Michelle Widlitz. Vice President of Finance and the Asian region and Managing Director of City, UT, has been appointed to the Board of Sapienza is an actor, most known for his role Administration. the Japan office. Directors of Palladon Ventures Ltd., a in “The Sopranos.” resource company focused on building pro- Nina Goodheart Kessler (MBA ’89), R. Brooks Gekler (MBA ’91), of St. duction facilities at the Comstock/Mountain James J. Ambrose (MBA ’88), of of Doylestown, PA, has been promoted to Paul, MN, joined the University of Lion iron mine in Iron County, Utah. Getz has Brookfield, WI, has been appointed Chairman Vice President of Cardiac Rhythm Disease Washington Bothell as Director of its served as Managing Director and Partner of of the Board of the Equipment Leasing and Management Marketing. CRDM is the old- Business Development Center, a unit within Cornerstone Equity Investors, LLC, a New Finance Association. Ambrose is the President est and largest business unit of Medtronic, the Business Program at UW Bothell. York-based private equity investment firm, of the Equipment Finance Organization for GE a company which develops life-changing since 1997. Healthcare Financial Services. technologies that improve the way chronic John Gonsalves (MBA ’91), of Edison, diseases are treated. NJ, has been appointed Vice President and Simon Satanovsky (MBA ’92), of Richard C. Janda (MBA ’88), of New York, Head of Communications for the Americas Brooklyn, NY, has been promoted to Partner NY, has been appointed Director of Research, Elizabeth J. Satin (MBA ’89), of New at Aricent. Aricent is a global software, serv- with Options Group, a global executive search a new position, with Loughlin Meghji + York, NY, has joined The Jordan, Edmiston ices, and solutions provider. Most recently, and strategic consulting firm. Company, a restructuring advisory firm. Most Group, Inc. as Managing Director. The Gonsalves was Partner and Practice Leader recently, Janda served as Director of Research Jordan, Edmiston Group, Inc. is a provider of Strategy and Performance Management Joanne Taylor (MBA ’92), of New with XRoads Solutions Group, a boutique cor- of independent investment banking servic- Practice at EMC Global Services’ communi- Rochelle, NY, has been named COO of The porate restructuring firm. es for media, information, marketing serv- cations and media sector. Housing Development Fund in Stamford, CT. ices, and related technologies. Previously, Taylor served as Vice President of Seth H. Lehman (BS ’88, MBA ’93), of Jeffrey A. Seidel (MBA ’91), of New Insured Portfolio Management for MBIA Henry C. Schmeltzer (MBA ’89), of Wesley Hills, NY, has joined Fitch Ratings as Caanan, CT, has been hired as Vice Insurance Corp. New York, NY, has been appointed to the Senior Director in the Global Infrastructure and President of Corporate Strategy, where he is Board of Directors of Euromatix Fund plc, Project Finance Group. Previously, Lehman responsible for strategic initiatives and plan- Erik T. Asgeirsson (ADCRT ’93, MBA an investment company with variable capi- served as a director and senior underwriter at ning at Ener1, Inc., a maker of advanced ’02), of New York, NY, appeared on tal. Schmeltzer is currently establishing an Financial Guaranty Insurance Co. lithium-ion battery systems for the new gen- Accounting Today’s list of 2008 Top 100 investment management firm in the UK eration of hybrid and electric vehicles. Most Influential People. with several partners. Previously, he was Previously, Seidel was Global Head of

Sternbusiness 47 classnotes

Frank W. Baier (MBA ’94), of Summit, NJ, A World of Good has joined Securities Industry and Financial Markets Association as CFO and Chief When she began her career as a securities analyst in the early Administrative Officer. Previously, Baier had 1970s, Linda Strumpf was a pioneer in a male-dominated envi- been a consultant at Meridian Capital Group. ronment. The business world was so lopsided with regard to gen- Jeffrey M. Farber (MBA ’94), of Stamford, der, she recalled recently, “On a plane, if you were [a woman] CT, has been appointed Executive Vice wearing a suit, they [the men] would hand you their coat think- President Finance/Corporate Development and ing you were a stewardess.” She was hard-pressed to find a CFO of GAMCO Investors, Inc., an investment women’s restroom on the executive floor. Exclusive all-male social advisory company. clubs in Manhattan refused to let her wait in their lobbies or enter certain floors. For one business meeting, she remembered a staff Lily Huang (BS ’94, MBA ’00), of Forest Hills, NY, was recently married to Hsiu-Hsien member asking her to leave the room. She replied, “I’m sitting Ling. Huang is Vice President in the investment down. If you want to make the other 80 people in here leave, you management division of Goldman Sachs in can.” She laughed, “So I sat there, and the walls didn’t cave in.” Manhattan. Strumpf has been a woman of firsts. After graduating from Pennsylvania State University with a BA in economics, she began Linda Strumpf (MBA ’72) Brian D. Matthews (MBA ’94), of her career in the for-profit sector as an assistant to a securities Gaithersburg, MD, has been appointed Chief analyst at Prudential. Quickly realizing the comparative earning power of the MBA gradu- Strategy Officer of Avail Media, a provider of profitable Internet protocol television (IPTV) ates around her, she decided to go to business school, and chose NYU Stern for its reputa- solutions. Most recently, Matthews was Vice tion and its New York City location. After earning her degree, she went to Equitable Life as President of Enterprise and Industry Solutions a securities analyst and worked her way up to become a portfolio manager – and one of the Marketing for VeriSign, Inc. first women to manage large pension funds. She recalled, “Running pension funds for big corporate clients was not something that women did.” Evelyn M. Morrow (MBA ’94), of New York, In 1982, Strumpf was recruited into the non-profit world as a portfolio manager at the NY, was recently married to Steven Solinsky. Ford Foundation, a career change that reflected her long-standing passion for the founda- Morrow is a project manager for business development at the Visiting Nurse Service of tion’s mission of helping the world’s poor and advocating for women’s rights and civil rights. New York in Manhattan. After managing the Foundation’s billion-dollar equity fund for 10 years, she became its Chief Investment Officer in early 1993, a position she still holds. “No woman had ever been Heather Mutterperl (MBA ’94), of New Chief Investment Officer of a major foundation before,” she said. “It was a challenge to Rochelle, NY, was named Senior Asset Manager prove to the people doing the search that I was up to the task.” at Hudson Realty Capital. Previously, Mutterperl Since Strumpf arrived in 1982, the Ford Foundation’s assets grew from $2.5 billion to a served as Asset Manager at Investcorp recent high of almost $14 billion. During her tenure, the Foundation, which runs solely on International. investments generated from the Ford family’s original gift, has given more than $10 billion Che D. Watkins (MBA ’94), of Atlanta, GA, in grants to strengthen democratic values, reduce poverty and injustice, advance human serves as the interim Executive Director of the achievement, and promote international cooperation. For years, the Foundation supported Regional Business Coalition in Atlanta, GA. Muhammad Yunus, a pioneer in the micro-credit field, who won a Nobel Peace Prize in Watkins is the Vice President for External 2006 for his work to alleviate poverty in Bangladesh. Affairs at the Metro Atlanta Chamber of This fall, Strumpf will retire, and she already has plans. A self-described “type A per- Commerce. sonality,” she will contribute her expertise to various committees and non-profit boards. And, as she has for every summer she can remember, she will travel abroad with her hus- Calvin G. Wong (BS ’94), of Summit, NJ, has been named Executive Vice President of band, a high school psychologist also retiring in June. On deck is a trip to Africa on safari Advertising Sales and Operations for appssavvy, – her next adventure in a world she continues to both explore and enrich. a direct sales team for social media applica- tions. Previously, Wong served at the company Paul D. Fiore (BS ’93), of Beverly Hills, Paul E. Mallen (MBA ’93), of Pine Charles Moon (MBA ’93), of Sherborn, he co-founded in 1996, Community Connect, CA, has been appointed to the Board of Brook, NJ, was promoted to Executive Vice MA, has joined Morley Financial Services, Inc. (CCI), a publisher of niche social networks. Directors of Aqua Connect Inc., a Mac ter- President of Amalgamated Life Insurance Inc. as Chief Investment Officer. minal services company. Company and continues to serve as CFO. Previously, Moon was Managing Director Kenneth Y. Chang (BS ’95), of Whitestone, at Hartford Investment Management. NY, has joined Sibson Consulting’s retirement Sonjoy Ganguly (BS ’93), of New York, Jonathan S. Miller (BS ’93), of Armonk, practice as Vice President and Consulting NY, has been hired by Ringleader Digital, NY, has joined the investment advisor of Beth Murray (MBA ’93), of Chatham, Actuary. Previously, Chang served as a senior the only third-party ad-serving network for Fifth Street Finance Corp as Director of East NJ, joined NYU Stern as Chief Marketing manager with Deloitte Consulting. mobile devices, as Vice President of Coast Origination. Prior to joining Fifth Officer, a newly created position, in the fall Product Management. Prior to Ringleader, Street, Miller worked at Bear Stearns, most of 2008. Previously, Murray served as Vinay T. Dayal (MBA ’95), of Little Neck, Ganguly was Director of Product recently as Managing Director in the Vice President and Head of Global NY, has been appointed to Treasurer of the Management for the Rich Media product Leveraged Finance Group. Marketing for the Financial Institutions Metropolitan Transit Authority (MTA). Dayal was line at DoubleClick. Group of American Express Bank. most recently the MTA’s acting Finance Director.

48 Sternbusiness Brian R. DiDonato (MBA ’95), of Blue Director, Power Management and Discrete Director and Head of Global Risk Colleen Kelleher Sorrentino (MBA Bell, PA, has joined Sorin Capital Products, for Infineon Technologies. Management in the Securitized Products ’98), of Staten Island, NY, has been named Management as Senior Partner and member Group at Morgan Stanley. one of the 50 Most Influential Women by of the Investment Committee. Sorin Capital is S. Douglas Pugliese (MBA ’96), of Irish Voice in the newspaper’s first such a leading independent alternative investment Wynnewood, PA, has joined Marshall & Michael L. Achenbaum (MBA ’98), of annual ranking. Kelleher Sorrentino is Vice firm. Stevens Incorporated as Executive New York, NY, was featured in PODER mag- President of Advanced Strategies and Senior Managing Director, where he will be azine’s “23 under 40,” its first annual list of Investment Officer at Wall Street Access LLC. Anatoly Nakum (BS ’95), of New York, NY, responsible for management of the firm’s “entrepreneurs, executives, leaders, and has been appointed Managing Partner and eastern US operations. Marshall & Stevens artists under 40 who are shaping South Joshua L. Kirschner (MBA ’98), of New Head of high-grade and crossover flow trad- provides appraisal and valuation services Florida and its perception around the York, NY, has been named CMO of Inform ing in Barclay Capital’s US Fixed Income nationwide. world.” Technologies, a “journalistic” technology Group. He joins Barclay’s New York office solution for established media companies. from Deutsche Bank AG. Nakum serves on Nikhil Puri (MBA ’96), of New Delhi, Matthew R. Chasin (MBA ’98), of New Previously, Kirschner was SVP of Global the NYU Stern Dean’s Advisory Council. India, has been appointed Managing York, NY, has joined Sorin Capital Product Development with Marsh, Inc. Director for Ambit Corporate Finance with Management, LLC, an independent alterna- Sapna P. Shah (BS ’95), of Albertson, NY, Ambit Holdings Pvt. Ltd., a financial serv- tive investment firm, as COO, Partner, and Constantine Korologos (MBA ’99), of recently married Srinivasan Iyer (BS ’97), ices firm based in Mumbai. member of the investment committee. New York, NY, has joined Deloitte Financial of Bayside, NY. Shah is a tax accountant in Previously, Chasin was Senior Managing Advisory Services as Director of Real Estate the real estate group at Ernst & Young. Iyer is Bradford D. Van Siclen (MBA ’96), of Director and Head of Repo Financing Consulting, after serving previously as a Director for Bond Trading at UBS. The couple Upper Montclair, NJ, has been elected to Activities for Mortgage and Structured managing director at Wachovia. met while attending NYU Stern. the Board of Directors of Metabolic Products at Bear Stearns. Research, Inc., a biotechnology company. Bryan D. Kraft (MBA ’99), of Chatham, Dominick C. Tolli, Jr. (MBA ’95), of Van Siclen is Partner in Bartholomew Grace W. Cheng (MBA ’98), of New NY, has been appointed Vice President of Wayne, NJ, has been named Senior Vice International Investments. York, NY, has joined GoldenTree InSite Media, Cable, and Entertainment, at Bank of President of Marketing for North America for Partners as its CFO. Cheng most recently America. Kraft was previously Vice President SpinVox, a service that converts voicemails Manoj S. Chouthai (MS ’97, MBA served as Executive Director for Morgan and Senior Research Analyst at Credit into mobile phone SMS text messages and e- ’00), of Jersey City, NJ, has been named Stanley’s private equity real estate fund. Suisse. mails. Previously, Tolli led mobile data and 2008’s Chief Information Officer of the service delivery efforts at Virgin Mobile as its Year by the New Jersey Technology Kim T. Gehrke (MBA ’98), of Lisa C. Markowitz (BS ’99), of Vice President of Innovation Services. Council. Chouthai is VP of Information Hummelstown, PA, has joined Citadel Allentown, PA, along with husband, Mosha, Technology and CIO for Public Service Investment Group, L.L.C. as Co-head of and daughter, Tali, welcomed the birth of her Mark K. Bhasin (BS ’96), of New York, Enterprise Group (PSEG) of Newark, a International Distribution and Marketing. second daughter, Aviva Rachel, on October NY, has joined Palisades Financial as Senior branch of the publicly-traded, New Jersey- Gehrke was most recently with Merrill 18, 2007. Director of Originations. Bhasin most recently based energy and energy services compa- Lynch, where he served as Co-head of served as a loan officer for CWCapital, and he ny. He also serves on the Board of the Government Institutional Sales. Citadel is a David W. Tang (MBA ’99), of Shanghai, is also Adjunct Professor of Real Estate Mental Health Association of Essex global financial institution focused on alter- China, has been appointed CFO and Vice Development at Columbia University. County. native investment strategies and services. President of Vimicro International Corporation. Vimicro designs and develops Jeffrey J. DeKorte (MBA ’96), of Raymond J. Deacon (MBA ’97), of Mark A. Glickman (MBA ’99), of multimedia semiconductor products and Washington, DC, has joined Travel Ad Denver, CO, has joined Pritchard Capital Marlboro, NJ, has been promoted to Senior solutions. Prior to joining Vimicro, Tang Network as Vice President of Product Partners as Senior Exploration and Vice President, Sales and Marketing, as served as the CFO of CNinsure Inc., a NAS- Development. Previously, DeKorte served as Production Energy Analyst. Pritchard well as Corporate Officer, with Oscient DAQ listed company operating in China. President and COO at LeisureLogix. Capital Partners is an energy investment Pharmaceuticals Corporation. Glickman bank. joined Oscient in August 2007 as Vice Sharon Weinstein (MBA ’99), of New Nicholas J. Hart (MBA ’96), of Randolph, President of Sales. York, NY, has joined FBR Capital Markets’ NJ, has joined Emisphere Technologies, Inc. Sharon Rebecca Gonen (BS ’97) and Financial Institutions group as Managing as Vice President of Strategy and Shachar A. Gonen (MBA ’00), of New Owen J. Jones (MBA ’98), of Durham, Director. Previously, Weinstein served as Development. Emisphere Technologies, Inc. is York, NY, welcomed twins, Ezra Maier NC, has been appointed Senior Vice Managing Director and Sector Head of a biopharmaceutical company that focuses on Gonen and Elianna Meira Gonen, on President, Sales Trader, with Pritchard Depository Institutions and Corporate a unique and improved delivery of therapeutic October 25, 2008. Capital Partners, an energy investment Finance at Wachovia Securities. molecules and pharmaceutical compounds. bank and institutional financial services Robert Meringolo (MBA ’97), of New firm. Previously, Jones was Director of Donna H. MacPhee (MBA ’96), of York, NY, has joined FBR Capital Markets Equity Trading in Lehman Brothers’ London 2000s Ridgewood, NJ, has been named Vice Corporation, an investment bank serving office. Steve Lee (MBA ’00), of New York, NY, President for Alumni Relations and President the middle market, as Managing Director. will serve as a portfolio manager for the of the Columbia University Alumni Meringolo most recently served as Senior Tomasz M. Józefacki (BS ’99, MBA Nuveen Multi-Currency Short-Term Association. Managing Director on Bear Stearns’ con- ’02), of Brooklyn, NY, has been elected to Government Income Fund. Lee currently vertible securities sales team. the Management Board of Agora SA, a serves on the portfolio management team for Timothy M. Maloney (MBA ’96), of media corporation based in Poland. the Nuveen Global Government Enhanced Raleigh, NC, was appointed Senior Director of John W. Schrader (MBA ’97), of Józefacki is currently its Head of Internet Income Fund. Lee has been with Nuveen Digital Power Marketing with Exar Weston, CT, has joined Duff & Phelps operations. Investments, a global provider of investment Corporation, a fabless semiconductor compa- Corporation as Managing Director. services to institutions and high net worth ny. Maloney was most recently the Senior Previously, Schrader served as Managing investors, since spring 2007.

Sternbusiness 49 classnotes

Debanjan Mitra (MPhil ’00, PhD ’03), Pancer was Vice President, Digital Paying it Forward of Gainesville, FL, has been named a Development, at The New York Times Marketing Science Institute Young Scholar. Company. The Marketing Science Institute’s biennial Michael Levy, Managing Director of Young Scholar Program brings together Kiran S. Patel (BS ’01), of Jackson the Investment Banking Division at some of the most promising scholars in Heights, NY, has joined Morgan Keegan as Morgan Stanley, understands the impor- marketing and closely related fields. Associate Vice President, Municipal Sales tance of credibility. Having taken a cir- for New York. Patel was most recently an cuitous route to investment banking, he Karen S. Patton (MBA ’00), of Wyckoff, associate in municipal sales with J.P. had to earn it. And in the competitive NJ, was named CFO of Bravo Media. Patton Morgan. market new graduates face today, he was formerly Vice President of Finance at WNBC. Ron D. Perry (BS ’01), of Englewood, generously bestows it on the NYU Stern NJ, has been featured in Billboard graduates he recruits for his firm. Suzanne B. Schiavelli (MBA ’00), of magazine’s “30 under 30” list, which iden- Michael Levy (BS ’89) Levy’s appetite for learning led him Hoboken, NJ, has been appointed to the tifies “individuals who drive the fields of to take a path different from the tradi- position of Principal, Specialty Finance, at music and entertainment forward with their tional financier. After receiving his bachelor’s degree in 1989 Bank of America. Schiavelli previously artistic and business vision.” Perry is from Stern – which he chose based on its reputation and worked at Morgan Stanley. Senior Creative A&R for Songs Music Publishing. global outlook – Levy opened a graphic design firm. “When Carol J. Simon (MBA ’00), of Short I started at NYU, there wasn’t much dorm housing available, Hills, NJ, is the founder and owner of Carol Jeffrey E. Berman (BS ’02), of so I shared a studio apartment with two of my friends who Simon Consulting, LLC, a consulting firm Rockville, MD, is Partner with Berman were going to Parsons School of Design,” said Levy. After based in Roseland, New Jersey, that special- Enterprises, a family-owned company receiving his degree, Levy teamed up with one of his room- izes in the assessment and management of based in Maryland that will form a partner- mates who graduated the prior year and was working as a counterparty risk with financial institutions. ship with former New York City Mayor freelance graphic designer. “We decided to form a legitimate Simon also serves as a trainer for Fitch Rudolph Guiliani’s company, Giuliani company because I could add the business piece to the Training, a company offering credit risk Partners, to be called the Berman workshops. Enterprises Opportunity Fund. puzzle.” They opened Lowell Design Group in 1989 and successfully established themselves in the graphic design Jeremy W. Szeto (BS ’00), of Sugar Greg B. Habay (BS ’02), of New York, community. Land, TX, was recently hired as an urgent NY, has joined Collins as Senior Vice After that initial success, Levy added another page to his care physician at The Physicians at Sugar President. Collins serves clients in the schooling, garnering a law degree from Brooklyn Law Creek and also as an emergency room property-casualty, life, accident, and health School. After graduation, he transitioned to investment physician at a local Houston, TX, hospital. insurance markets. banking, and following a few positions in finance, joined Szeto is currently in private practice in Sugar Land, TX, specializing in family medi- Michael Margolis (MBA ’02), of West Morgan Stanley in 1998. He has remained there, serving not cine. Orange, NJ, has been hired by Merriman only as Managing Director, but also as Co-head of the firm’s Curhan Ford as Managing Director in its Real Estate Banking Group for the Americas and Global Guatam Bhandari (MBA ’01), of New healthcare investment banking practice. Head of Lodging. York, NY, has been appointed to lead the Merriman Curhan Ford is a full-service Gaining credibility in investment banking wasn’t a slam development of the investment platform for financial services firm. dunk. “I had zero experience in banking and didn’t come Morgan Stanley Infrastructure in India, from a traditional background,” he explained. “Most Middle East, and Sub-Saharan Africa. Jerome Schneider (MBA ’02), of New York, NY, has been hired as Executive Vice bankers I spoke to were focused on hiring MBA graduates Shahid Shafi Khan (MBA ’01), of President, Portfolio Manager, and Finance with traditional finance backgrounds from Ivy League Princeton Junction, NJ, has been promoted Specialist for PIMCO, Inc., an investment schools – not newly minted lawyers with graphic design cre- to Senior Partner with Interactive Broadband management company based in Newport dentials.” However, Levy was determined to gain a foothold Consulting Group, LLC (IBB), a boutique Beach, California. Previously, Schneider in the industry and show how well an NYU graduate could consulting firm advising top management in was Senior Managing Director at Bear perform. the broadband-related sectors of cable, Stearns. Now, as Co-captain of Morgan Stanley’s recruiting efforts mobile, technology, and digital media. Khan is currently a fellow at the University of at Stern, Levy takes every chance he can to recruit Stern Angela Faye Taylor (MBA ’02), of Pennsylvania’s Wharton School of Business. Minneapolis, MN, has been hired as Vice graduates. “Stern graduates have it all: common sense, President and General Manager of the international exposure, and academic excellence,” he said. Lena M. Liu (MBA ’01), of New York, NY, Washington Mystics, a Women’s National “The School’s reputation throughout the financial communi- was recently married to Frank Stonebanks. Basketball Association team based in ty is unsurpassed and its graduates are highly coveted.” Liu is Managing Director for Banc of Washington, DC. Previously, Taylor was the Levy admitted that he loves working for Morgan Stanley America Securities. Vice President of Business Development and that his “goal is to continue to help the firm build the for the Minnesota Lynx. Andrew Pancer (MBA ’01), of Tenafly, core team of Stern alumni so that the network and recruiting NJ, has joined Media6 degrees, a company Eli S. Goldschmiedt (MBA ’03), of efforts will be self-sustaining, and that Stern will be a major that provides major brand marketers scala- Woodsburgh, NY, has joined Amherst contributor to the firm’s success.” He’s clearly earned the ble, bespoke audiences using the power of Securities Group, L.P., a privately held bro- credibility to make that happen. social graph data, as its COO. Previously, ker-dealer specializing in residential mort- 50 Sternbusiness gage-backed securities. Most recently, Rebecca Lee Glashow. Schaffer is Vice group in the securities division. Stein is an council. Weiner was most recently Vice Goldschmiedt worked at J.P. Morgan President for Private Investment associate at Bank of America’s investment President of Marketing, Colas, for Pepsi- Securities. Transactions at PanAmerican Capital in New bank, working in structured finance in the Cola North America. York. capital markets strategies group. The cou- Timothy Zaino (MBA ’03), of Fairfield, ple met at NYU Stern. Kimberly L. Ballard (MBA ’08), of CT, has joined the debt capital markets divi- Brian D. Swarth (MBA ’05), of Washington, DC, was recently married to sion of Broadpoint Capital, Inc. as Vice Brooklyn, NY, was recently married to Craig A. Rudner (MBA ’07), of Harley J. McKinley. Ballard is the Operations President, Bank Debt Sales. Broadpoint Rachel Dana Birnbaum. Swarth is Senior Ossining, NY, welcomed son, Justin Manager at the Louis Vuitton store in Chevy Capital is a broker-dealer subsidiary of Director of Strategy and Business Michael, on June 21, 2008. Chase, MD. Broadpoint Securities Group, Inc., an inde- Operations at MTV Networks in New York. pendent investment bank. Most recently, Andrea M. Scribner (MBA ’07), of New Ryan D. Fiftal (MBA ’08), of New York, Zaino was a director in leveraged loan and Ellen Winkler (MBA ’05), of New York, York, NY, was recently married to Ahsim NY, was recently married to Nicole Brady. high-yield bond sales and trading at UBS. NY, was recently married to Dennis Lafferty. Khan. They both work for Morgan Stanley. Fiftal is a research associate at Morgan Winkler was previously an associate at Stanley. Robert M. Brown (BS ’04), of New York, Goldman Sachs in New York where she Ellen E. Sheets (MBA ’07), of Concord, NY, was recently married to Julie Elizabeth worked with institutional investors. MA, has been appointed to the position of Benjamin R. Maisel (MBA ’08), of New Maguire. Brown is Associate for Mergers and Chief Medical Officer with Predictive York, NY, was recently married to Susan A. Acquisitions in the New York office of Credit Thomas J. Curtin (BS ’06), of New Biosciences, a molecular diagnostics com- Rosenthal. Maisel is Vice President in the Suisse. York, NY, was recently married to Shannon pany developing non-invasive diagnostic credit department at Morgan Stanley in New Leonard. Curtin is an accountant with products for cancer management. Sheets York. Zheng James Chen (MBA ’04), of Pine Archer Capital Management. most recently served as Chief Medical Brook, NJ, has joined Morgan Joseph & Co. Officer and SVP at Hologic Inc., a women’s Emily Powers (MBA ’08), of New York, Inc., a New York-based investment bank that Stephanie L. Lee (MBA ’06), of health diagnostics company. NY, has been appointed Manager, Business has a growing stake in financing middle- Brooklyn, NY, published a working paper Development, at NBC Universal. Previously, market growth companies in China, as titled “Auction-Rate Securities: Bidder’s Philip Silverman (MBA ’07), of New Powers was Associate Producer for National Senior Equity Research Analyst and Senior Remorse?” in Pratt’s Journal of Bankruptcy York, NY, was recently married to Anne Geographic. Vice President. Law. Greenberger. Silverman is a founder and the Managing Partner of Kingsview Group, David A. Sherman (MBA ’08), of New Anne-Cecilie Engell (MBA ’04), of New Glenn S. Robertelli (MBA ’06), of New an investment management firm. York, NY, was recently married to Wendy York, NY, was recently married to Rob Brunswick, NJ, was selected as Schwan. Sherman is Vice President of Speyer. Engell is Marketing Director at Iconix Entrepreneur Magazine’s 2008 Emerging Russell J. Weiner (MBA ’07), of New Operations in the US asset management unit Brand Group. Entrpreneur of the Year for his new entre- Rochelle, NY, has joined Domino’s Pizza as of Nomura, the Japanese brokerage firm. preneurial venture, ViewGuard. Executive Vice President and CMO; he will Daniel J. Farr (MBA ’04), of Durham, CT, also serve as a member of its leadership has been promoted to CFO of CBRE Realty Brian Skorney (MBA ’06), of New York, Finance, Inc. Farr recently served as Manager NY, was recently married to Catherine of Financial Planning and Analysis. McGuinn. Skorney is an associate analyzing publicly traded companies in the biotech- In Memoriam Jack Ogulnick (BS ’31) Maura Gedid (MBA ’04), of Astoria, NY, nology sector with Susquehanna Financial Elias Karmon (BS ’32) was recently married to Eric Kaye. Gedid is Group. Assistant Vice President at the Breakstone Frederick O. Ferrara (BS ’37) Group, an investor relations and corporate Manoj K. Thomas (PhD ’06), of Ithaca, Monroe Seifer (BS ’37) communications consulting firm in New NY, has been named a Marketing Science York. Institute Young Scholar. The Marketing Joseph V. Zeccola (BS ’40) Science Institute’s biennial Young Scholar Nidha Agrawal (PhD ’05), of Seattle, WA, Program brings together some of the most Fred Hricewich (BS ’41) has been named a Marketing Science promising scholars in marketing and related Irving M. Wells (BS ’41) Institute Young Scholar. The Marketing fields. Science Institute’s biennial Young Scholar William E. Morris (BS ’42) Program brings together some of the most Stefanie Lisa Dreiblatt (MBA ’07) and William Harris (BS ’49) promising scholars in marketing and related Robert J. Wotton (MBA ’07), of New fields. York, NY, were married in July of 2008. Bernie Brillstein (BS ’53) Dreiblatt is the Senior Manager for Brand Christopher D. Rigg (MBA ’05), of Management at The Robert Allen Group. Francis X. Miller (MBA ’56) Wyckoff, NJ, has joined Soleil Securities Wotton is Senior Financial Analyst for the Donald R. Levy (MBA ’64) Corporation, a provider of value-added, inde- consulting and brokerage groups at CBRE. pendent equity research and brokerage serv- The couple met at NYU Stern. Caroll E. Pennell II (MBA ’73) ices, as a research analyst. Rigg will provide Douglas F. Meyer (BS ’85) coverage of the healthcare facilities and serv- Lindsay Monihan (MBA ’07), of New ices sector. York, NY, and Jeffrey Stein (MBA ’07), David Margolis (former member of NYU Stern of Saddle River, NJ, were recently married. Board of Overseers) Dean Howard Schaffer (MBA ’05), of Monihan is an associate at JPMorgan New York, NY, was recently married to Chase working in the municipal bond sales

Sternbusiness 51 PastPerformance

Humble Beginnings, Rich Heritage: A Tale of Trinity Place

By Marilyn Harris

The $35 million Concourse classroom, forcing teachers to Project at NYU Stern is well under virtually shout their lessons. way, marking another milestone in The paper-thin walls gave NYU Stern’s history. As the physical new meaning to the phrase and learning environments of key “interdisciplinary,” and the areas of the School undergo their building shook regularly as transformation, now is a good time the BMT subway trains to look back at the rather plainer passed underneath. trappings of an earlier era. From Still, the adversities – and 1921 to 1960, the home of NYU’s the School’s location near Graduate School of Business Wall Street – had advantages. The original home of NYU Stern (GBA, as it was then known) – from 1921 to 1960 – was the former Trinity Church School building locat- Administration (GBA), as it was For faculty, said Kurnow, the ed on Trinity Place near Wall Street. called, was the former Trinity close quarters created good Church School building at 90 Trinity morale and engendered fertile dis- The 10-story, fully air-conditioned Place, close to Wall Street. cussions and the exchange of ideas structure, complete with a two-story On a pure comfort level, those leading to meaningful research. library, bookstore, and administra- weren’t the good old days. Dean Denizens of the basement offices tive offices, was a vast improve- Emeritus Abraham L. Gitlow, in his included, among others, such aca- ment. The expansion facilitated the book New York University’s Stern demic giants as Marcus Nadler and School’s adoption of a full-time School of Business: A Centennial Jules Bogen in finance; Peter MBA program, as well as an Retrospective, reports how former Drucker, the management guru; W. enhanced doctoral program. Dean John T. Madden described the Edward Deming, whose work in The move uptown, in 1992, premises at Trinity Place in 1937: quality control played a large part affirmed the School’s status as a “A visit to the Wall Street building in the post-war emergence of Japan full-time undergraduate and gradu- on any evening from 4:30 to 9:00 as a major economic power; and ate institution. Most important, it pm [classes were evenings only] Herman Kroos, an outstanding eco- created a unified campus that both would reveal the paucity of the facil- nomic historian. reflected and reinforced a long- ities for the work accomplished. In For its students, according to sought sense of community that was fact, it may be said that if the stu- Gitlow, the School was a vital, pro- hindered by separate campuses and, dents were not convinced of the ductive, and important educational earlier, by the original part-time value of the instruction which they enterprise. Thousands of part-time nature of GBA. receive, there would be no other students, many of whom walked The Concourse Project renova- incentive to attend.” over to Trinity Place after a day’s tions – made possible by the gener- Professor Emeritus Ernest work on Wall Street, earned their ous support of donors, alumni, cor- Kurnow, who at 96 still teaches three MBAs and went on to become lead- porate partners, and friends – statistics classes each year, began ers of American business. promise to bring the Stern campus teaching at Trinity Place in 1950. He By the mid-1950s, however, the in line with a reputation for leader- recalled recently that faculty offices School realized that its success ship and excellence that has far out- were in the basement, with three or meant it was time to move on and paced its physical plant. Kurnow, four professors sharing an office and provide its citizens with an environ- for one, who’s seen it all over his a desk: one drawer per professor. ment more conducive to teaching career, put it this way: “There’s no The ventilation was so poor, in the and learning, and a fundraising comparison with the old facilities. summer, large fans would be campaign was launched. In 1960, Now we’re in heaven.” ■ whirring away in the back of each nearby Nichols Hall was christened. MARILYN HARRIS is editor of STERNbusiness. 52 Sternbusiness CONCOURSE PROJECT

JOIN US IN “BUILDING” OUR COMMUNITY

We are in the midst of a historic transformation of our campus between now and January 2010. Your support signals to our students – the business leaders of tomorrow – your lifelong commitment to our community.

The future Tisch lobby will open in 2010.

$35,000,000 HELP US FILL THE TORCH

Make a gift of $5,000, $10,000, or $25,000 over three years and $24,000,000 your name will be permanently displayed on a Concourse donor recognition wall. Contact Amy Lei at 212-998-4161 to learn more.

Funds raised to date