S P R I N G / S U M M E R 2 0 0 9

B e r k l e y C e n t e r i s 2 5 Y e a r s Y o u n g ■ M a n a g i n g B a r c e l o n a ■ W h a t W o u l d H a m i l t o n D o ?■ Boeing, GE, and the Economy ■ Fond Memories of Trinity Place ■ Dean Cooley Reflects on the School

t h e A l u m n i M a g a z i n e o f N Y U S t e r n

STERNbusinessF I X I N G O U R B R O K E N E C O N O M YStern confronts the financial crisis by creating a set of recommendations for policy-makers, a book published inMarch, and an “instant” MBA course

a l e t t e r f r o m t h e deanA year ago, few could

have imagined how far offcourse the economy wouldveer these past eightmonths. Our last coverstory called for a newunderstanding of risk. Inthis issue, the economytakes center stage again.

It’s fair to say that over the past eight months, whatwent wrong, why, and what can be done about it werethe focus of most of our seminars, conferences, guestspeakers, and faculty, particularly of finance and eco-nomics. For the NYU Stern community, there’s beennothing more riveting – or engaging.

We were fortunate to welcome another distin-guished roster of guest speakers. The academic yearkicked off with a chat with John Paulson (BS ’78),founder and president of leading hedge fund groupPaulson & Co. As of September, he figured the econ-omy was already in the sixth inning of a crisis doubleheader (page 2). Jeff Immelt, chairman and CEO ofGE, joined us in October for a GE Live event, talkingnot just to a Stern audience but simultaneously to sixother business school audiences around the world.His description of how GE planned to navigate in theyear ahead made it clear just how challenging it is tosteer a diverse giant in such difficult times (page 4).Jim McNerney, chairman, president, and CEO ofBoeing, discussed how Boeing is proceeding to flythrough the turbulence (page 26).

Banking issues were the subject of our facultyresearch in this issue. Credit cards caught marketingprofessor Priya Raghubir’s attention as she researchedwhy consumers prefer to use just about anything topay for purchases as long it’s not cash (page 30).Economics professor Richard Sylla looked into howAlexander Hamilton handled a couple of bank crises,with some startling parallels to today (page 34). Asfor the banking industry, this was a period of rapidand jarring consolidation. Charlie Scharf (MBA ’91),CEO of retail financial services for JPMorgan Chase,was in the thick of it, charged with integrating WaMuinto Chase after their merger (page 8).

Our faculty were highly motivated to process whatwas happening in the global economy and transformtheir insight into valuable classroom lessons. It quick-ly became clear to me that Stern could make a con-tribution beyond the classroom. Thus commencedwhat we initially called the White Papers Project. The18 white papers were hand-bound and distributed toWashington policymakers in December. In March,they were published under the title RestoringFinancial Stability: How to Restore a Failed System(Wiley, 2009). The collection was written by 33finance and economics faculty and ably edited byfinance professors Matt Richardson and ViralAcharya. An account of this collective achievement ison page 22.

As the recession drags on, some economists believethat innovation will help lead us out of it. This givesextra impetus to our celebration of the 25th anniver-sary of the NYU Stern Berkley Center forEntrepreneurial Studies (page 13). More and morestudents are finding their way to the Center, partici-pating in its programs and business plan competitionsand finding inspiration, whether in entrepreneurshipin general, or in social entrepreneurship in particular,as evidenced by the crowd at the Fifth Annual SatterConference on entrepreneurship in November (page6). Stern is unique in developing a methodology forteaching entrepreneurship, and we have economicsprofessor William Baumol, the Berkley Center’s aca-demic director, to thank for that.

As you may know, I shall be stepping down asdean after this academic year to return to teachingand other projects (page 18). These seven years havebeen a very rewarding period of growth for the Schooland personal growth for me. It has been my privilegeto serve the School and to work with such an involvedand supportive alumni body, and I am grateful tohave had the opportunity. I hope I get the chance tospeak with each of you in June at the Global AlumniConference in Barcelona. You can get a glimpse intowhat awaits you by reading this issue’s interviewwith Andreu Puig Sabanes (MBA ’91), general man-ager of Barcelona (page 12).

Thomas F. CooleyDean

contents S P R I N G / S U M M E R 2 0 0 9

STERNbusinessA publication of New York UniversityStern School of Business

President, New York UniversityJohn E. Sexton

Dean, NYU Stern School of BusinessThomas F. Cooley

Vice Dean and Dean of theUndergraduate CollegeSally Blount

Chairman, Board of OverseersWilliam R. Berkley

Chairman Emeritus, Board of Overseers Henry Kaufman

Chief Marketing OfficerBeth Murray

Associate Dean, Marketingand External RelationsJoanne Hvala

Editor, STERNbusinessMarilyn Harris

Managing Editors, STERNbusinessRika Nazem and Jenny Owen

Contributing WritersKelly Freidenfelds, Keith Layton,Jessica Neville, Angela Parks,Carolyn Ritter, and Joey Schmit

Contributing PhotographersDon Pollard and Anne Marie Poyo Furlong

IllustrationsGordon StuderChristophe Vorlet

DesignAnne Sliwinski

Letters to the Editor may be sent to:NYU Stern School of BusinessOffice of Public Affairs44 West Fourth Street, Suite 10-160New York, NY 10012www.stern.nyu.edu

sternbiz@stern.nyu.edu

2 Public OfferingsJohn Paulson talks about winning in a losing market; the Stern community fêtes Dean Emeritus Abe Gitlow as he turns 90; experts discuss the future of theeconomy; GE’s Jeff Immelt is interviewed by Maria Bartiromo; experts in a three-partseries advise President Obama; social entrepreneurs measure impact; Wall Streetersdiscuss the future of M&A; accounting gurus weigh the mark-to-market proposition

8 Stern in the City8 Charlie Scharf of JPMorgan Chase takes a modest approach to a huge job,

By Marilyn Harris10 Les Morgenstein’s Alloy Entertainment goes to town with the Gossip Girl

franchise, By Jenny Owen

12 He’s COO of One of the World’s Great Cities8 questions for Andreu Puig Sabanes

13 Special Feature – “Innovating Around Innovation”As the Berkley Center for Entrepreneurship celebrates its 25th anniversary, it is incubating startups, providing mentors, producing a methodology for teachingentrepreneurship, and inspiring more students, By Marilyn Harris

18 A Stronger Stern A Q&A with Dean Thomas F. Cooley

22 Cover Story – How to Fix the Broken EconomyStern confronts the financial crisis by creating a set of recommendations for policymakers, a book published in March, and an “instant” MBA course

26 Leading IndicatorsStern’s CEO Series: Boeing’s Jim McNerney holds forth on the financial crisis, free trade, oil prices, labor unions, and the green economy

28 ProspectusFaculty awards, honors, and noteworthy papers

Office Hours – Faculty Research 30 Monopoly Money

Consumers prefer to use a credit card, or any form of scrip, to paying with cash,By Priya Raghubir and Joydeep Srivastava

34 Another Great Depression?Just after the nation’s founding, Alexander Hamilton took on a banking crisis witheerie parallels to today’s, By Richard Sylla

38 Peer to PeerStudent Life in Washington Square and Beyond: Designing a new-media marketing plan to recruit priests; finance, accounting, and rock ’n’ roll make for anaward-winning combination

40 Alumni AffairsAlumni News and Events: Networking opportunities; Alumni Day; scholarshipmoney at work; webcasts of panels, speakers, and workshops

44 Class Notes

52 Past PerformanceTrinity 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

THE FUTURE OF INTELLECTUAL DIVERSITY: A 90TH BIRTHDAY GALA FOR DEAN EMERITUS ABRAHAM GITLOW

“Today, whenyou tell someoneyou’re fromStern, there is anod of recogni-tion, a slight lift-ing of the eye-brows – you getrespect,” saidProfessor andDean EmeritusAbraham Gitlowat his birthdaycelebration inOctober.

It isn’t often that the Stern com-munity has the opportunity to cele-brate the 90th birthday of an esteemedmember of its faculty – and the Schoolchose the annual Board of Overseersdinner as the occasion to do so. Morethan 150 members of the Board ofOverseers and Dean’s Executive Board,as well as alumni, faculty, friends, andadministrators, gathered at the St.

Regis Hotel in New York City to payhomage to Gitlow’s heritage of life-long education. The evening featuredkeynote remarks on the future ofintellectual diversity by VijayVaitheeswaran, award-winning corre-spondent for The Economist andexecutive-in-residence at NYU Stern.The energy in the room conveyedhow meaningful Professor Gitlow’sleadership, teaching, and research

have been to his students and theextent of his impact on the Stern com-munity.

Dean Thomas F. Cooley welcomedguests, acknowledging the presence offormer Deans Frederic Choi, DanielDiamond, and William Dill. “Everydean should be so lucky to have suchdistinguished predecessors,” saidDean Cooley. “Abe Gitlow’s life andwork at Stern has been as steady andconstant as the stock market has beenvolatile – it is nice to have points ofconstancy in times like these.”

William R. Berkley (BS ’66), chair-man of the Board of Overseers, notedthat Gitlow always demanded “morethan the given standards,” and thatthanks in part to his persistence andimplementation, Stern is now posi-tioned at the forefront of global busi-ness education. Vaitheeswaranobserved that intellectual capital con-sists of innovation, the catalyst forchange and diversity in thought. “Every

human being has the capacity tobecome an innovator through educa-tion and empowerment,” he said.

Gitlow joined the faculty of theSchool of Commerce, Accounts, andFinance, as Stern’s UndergraduateCollege was then known, in 1947.He served as Dean of NYU Stern from1965 to 1985, playing a significantrole in the School’s rapid evolutionfrom a local school of opportunity toan internationally renowned institu-tion.

Gitlow spoke fondly of his 60years at the School, lauding the suc-cess of Stern’s gifted faculty in teach-ing, preparing, and training the gener-ations of Stern students who nowcomprise its distinguished alumninetwork. The School, he said, needssupport now more than ever: “In mynine decades, I have learned this –giving is good. It comes back, evenmultiplied, years later, and validates alife well spent.”

that most of the companies com-plaining about short-selling areabout to fail. He said hedge fundsexist because they can show posi-tive returns in all markets, addingthat short-selling can produce pos-itive returns in declining markets.Paulson Funds were among thehighest-performing funds in 2007and were awarded the ArbitrageFund of the Year, Best New Fundof the Year, and Management Firmof the Year by Absolute Return magazine.

The conversation continued fol-lowing the event, as Paulson joined

more than 35 invited NYU Stern alumni at the UnionSquare W Hotel for an After Market Hours event, one ofa series hosted by NYU Stern’s Dean’s Executive Boardthat showcases successful alumni and their diverse andcreative careers. There he predicted that the financial cri-sis would spread to Main Street in 2009 and noted thatEuropean markets, which tend to lag the US by approxi-mately six months, wouldn’t be far behind. “We’re in thesixth inning of a double header,” he said.

NYU Stern alumnus John Paulson(BS ’78), the founder and presidentof Paulson & Co., a leading hedgefund firm, spoke in September to anaudience of more than 400 Sternstudents and alumni during a Chatswith Financiers event. The Chatswith Financiers Series brings togeth-er academics and luminaries in thefinance industry for discussions onpersonal experiences and currenttrends in finance.

Edward Altman, Max L. HeineProfessor of Finance, interviewedPaulson about his firm’s recent her-alded success in short-selling subprime credit. Paulsonsaid that his investment strategies are two-fold: event-driven arbitrage and distressed and bankruptcy investing.Reacting to the US Securities and Exchange Commission’srecent, temporary ban on the short-selling of 87 specificstocks, Paulson said that while he shared regulators’ con-cerns about naked short-selling, he wouldn’t blame short-selling for the market’s decline. He argued that only 4percent of the market’s outstanding shares are short and

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WINNING IN A LOSING MARKET: A CHAT WITH FINANCIER JOHN PAULSON

Edward Altman (left) interviewed John Paulson about his firm’srecent success in short-selling subprime credit.

Abe Gitlow (center) celebrates his 90th birthday with Dean Thomas F. Cooley(left) and William Berkley at the annual Board of Overseers dinner.

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WHAT THE FUTURE HOLDS: EXPERTS HOLD FORTH AT MARKET PULSE EVENT

insured funds, as well as the unregulated market forcredit default swaps.

Nicknamed “Dr. Doom” for the nature of his econom-ic forecasts, Roubini opined that the US is in its worstfinancial crisis since the Great Depression and that thecountry was entering a prolonged recession that couldlast about 24 months.

According to White, “It’s all about leverage.” Whenthe technology bubble burst and stock market valuedecreased by $7.5 trillion between December 1999 and2002, the financial sector handled it, he pointed out.The losses were absorbed, mainly by households, in non-leveraged forms such as mutual funds, pension funds,and 401Ks. Today, the $4 trillion to $6 trillion loss inhousing value will again be absorbed mostly by house-holds, but because mortgages are so highly leveraged,there will be spillover into the financial sector, which,because of high leverage levels, cannot absorb it all.Expect prolonged impact on future consumer spendingpatterns, retirement, and overall consumption, Whitepredicted.

As the Dow hit record lows,consumer confidence continuedto wane, and the Fed craftedplans to stave off a Depression-like era, Dean Thomas F.Cooley moderated a discussionin October with industry,media, and academic thoughtleaders to analyze and offersolutions for the current finan-cial crisis. The event was partof NYU Stern’s Market PulseSeries, introduced in fall 2007by Dean Cooley to tackle press-ing global issues affecting busi-ness and society.

The panel included DennisBerman, The Wall StreetJournal deputy bureau chieffor money and investing; MarkPatterson (MBA ’86), chairmanand co-founder ofMatlinPatterson GlobalAdvisors LLC; NourielRoubini, Stern professor ofeconomics and internationalbusiness; and ProfessorLawrence White, deputy chairof Stern’s economics depart-ment and former member of the Federal Loan Home BankBoard.

With the 23 percent job loss experienced during theGreat Depression as a reference point, Dean Cooley saidwe are a long way from that point. To reinstill confidencein the markets, he stated, the government would need toestablish the level of predictability and consistency thatAlexander Hamilton prescribed.

Berman said presciently that the infusion of capital intothe market would not cover the auto industry, adding thatbanks and the economy have not begun to process whatwill happen with credit card debt and auto lending. Hesuggested that Wall Streeters are out of touch, and alongwith Washington insiders, exist in a bubble.

According to Patterson, with the Fed’s bailout, all tax-payers are now distressed investors. Patterson argued thatthe government has been negligent on regulation – “asleepat the switch” – and that the government and banks havemoved from “100 percent gullibility” to asking questions,but still not acting. He also expressed concern with theFDIC, which had just $43 billion to cover $4.5 trillion in

Top: (from left to right) Dean Thomas F.Cooley, Dennis Berman, Nouriel Roubini,Mark Patterson, and Lawrence White analyzedand offered solutions for the financial crisis.

ADVISING OBAMA: STERN SERIESFOCUSES ON THE NEWADMINISTRATION

As President-elect Obamatransitioned into the White House,experts from the Council on ForeignRelations, The Economist, and NYU Stern debated thecurrent global financial crisis with a focus on ways torepair a broken economy. Entitled “Transition 2008:Advising America’s Next President,” the series of threeevents addressed global issues as they relate to the USpresidency.

The first event’s panel on fixing global financeincluded Greg Ip, US economics editor at TheEconomist; Brad Setser, fellow for geoeconomics at theCouncil on Foreign Relations; and Roy Smith, KennethLangone Professor of Entrepreneurship and Finance atNYU Stern. The discussion was moderated by ThomasF. Cooley, Dean of NYU Stern and a macroeconomist.

In the short term, Ip said, it is important to create aformal legal authority by which the government cantake over any company of systemic importance that is infinancial trouble and pay off creditors and wind thecompany down. In the long term, he suggested a stricterform of regulation, one that limits the risks that bankholding companies can take.

According to Setser, “Taxpayers have not realizedthat they are on the hook on the downside.” He notedthat the G7’s commitment that no systemically impor-tant institution will fail puts taxpayers on the hook tobail them out. In his view, even with no taxpayer moneyon the line, banks should evaluate their capital beforeconsidering paying dividends. Regulators should beevaluating whether their equity capital could be betterused to protect the taxpayer.

Smith advised Obama to heal the real economy bycutting the budget so he can spend what’s needed to getthings going; to intervene in the markets to get themflowing again; and not to bail out General Motors. “LetGM go bankrupt,” he said.

Noting that the current regulatory system appears tohave been suspended, Dean Cooley stressed the need toestablish the rules of the game so that market playerscan know what to expect moving forward. He said itwas important to include additional pieces in the regula-

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GE CHAIRMAN AND CEO JEFF IMMELT DISCUSSESTHE SHRINKING ECONOMY WITH CNBC ANCHOR MARIA BARTIROMO

“I’ve already seen 20 things I never thought I’dsee in a lifetime, and I’ve already done 10 things I neverthought I’d have to do. And I’ve got the next 10 linedup,” said Jeff Immelt, General Electric chairman andCEO, in regard to the current financial turmoil. At NYUStern in October for a GE Live event entitled, “Winningin Today’s Environment,” Immelt spoke to nearly 300Stern MBA students, as well as hundreds more at sixother business schools across the globe – LondonBusiness School, IESE in Spain, UVA-Darden,Thunderbird, UNC, and Emory – where the event wasbroadcast live. Immelt was interviewed by NYU alumnaand Trustee Maria Bartiromo, host and managing editorof CNBC’s “The Wall Street Journal Report with MariaBartiromo,” as well as anchor of “Closing Bell withMaria Bartiromo.”

Immelt described how GE is navigating the creditmarkets, investing in technology and alternative energysources, and managing globalization. He said GE’s con-tinued financing of its infrastructure divisions will keepthe company growing. “Government is going to want tosee business solve some big problems out there,” he stat-ed. “And some of the big problems are infrastructureproblems. It’s healthcare, it’s energy, it’s infrastructure.So the financing of these, and the technology that goeswith them, is going to be one of the growth areas of thefuture.”

The GE Live event was preceded by a breakfastwhere students had the opportunity to meet with NYUStern alumni now working at GE as well as other GEexecutives and recruiters.

At an event broadcast live to six other business schools, Jeff Immelt was interviewed by MariaBartiromo about how GE is navigating the credit markets, new technology, and globalization.

was Jonathan Eaton, professor of economics at NYU.Alden advised a serious rethinking of the direction of

US trade policy and a strategic pause on the issue. For20 years, he noted, trade policy has focused on openness,but a new direction might be in order, particularly sincethere is a lack of support for the current US trade agen-da. Second, he said that during the “timeout” the USshould “do no harm,” such as slapping tariffs on Chineseimports because of the value of the yuan. Finally, the USshould refocus trade policy on the World TradeOrganization, which he considers underused, versusnegotiating bilateral agreements, which he believes arepolitically controversial and less economically efficient.

Focusing on US-Latin America trade relations,Szterenfeld said trade policy must be formed in the con-text of a comprehensive agenda that includes other issuessuch as energy, poverty reduction, and debt relief. Sheargued that the trade embargo against Cuba should bedismantled, and advised that the US engage and partnerwith Brazil, a powerhouse economy in the WesternHemisphere and an important global player.

Backus said he was unsure if he’d urge Obama tomake trade policy a primary issue. He explained thatincreased trade hasn’t produced huge gains, and that hisbiggest fear would be stepping backwards with trade pol-icy, especially in light of the current economic climate.

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tory architecture and to devisebetter ways for firms to calcu-late risk.

The second event of theseries addressed how Obama’selection may change the wayAmerica leads, how the worldviews the US, and whetherAmerican dominance is over.Panelists were Michael Moran,executive editor of CFR.org;Lane Greene, internationalcorrespondent for the TheEconomist; and Richard Sylla, Henry Kaufman Professorof the History of Financial Institutions and Markets andprofessor of economics at Stern. The panel was moderatedby Alexandra Starr, writer for Slate magazine and formerpolitical correspondent for BusinessWeek.

Moran predicted that the US will not be “walking thewalk” in terms of economics over the next two years, andthat there will be more “propping up” of industries andmarket interventions – the very actions the US condemnedthe French for doing post-WWII. While the economic cri-sis is global, Greene said the US has been targeted forblame, specifically capitalism and American economicideas on how to organize economies. This perceptioncould lead to protectionism on the part of other countriesand is likely to affect how the US talks about economicpolicy.

According to Sylla, “We’re moving back toward a pre-1914 world.” He added that the US will continue to leadbecause there isn’t a willing substitute. To be a goodleader, he noted, the US should involve other countries inthe discussion.

The third event focused on trade policy. Panelistsincluded Edward Alden, Bernard L. Schwartz SeniorFellow at the Council on Foreign Relations; AnnaSzterenfeld, Latin America editor, Economist IntelligenceUnit; and David Backus, Heinz Riehl Professor and chairof the department of economics at Stern. The moderator

Above, left: Roy Smith (right) andDean Thomas F. Cooley discussedsolutions for fixing global finance.

Above, right: (from left to right)Alexandra Starr, Michael Moran,Lane Greene, and Richard Syllaaddressed the future of Americanleadership.

Left: Anna Szterenfeld and DavidBackus debated US trade policy.

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KEY WALL STREET PLAYERS DEBATE THE FUTURE OFMERGERS AND ACQUISITIONS

Three leading figures in the mergers and acquisitionsfield gathered at an NYU Pollack Center for Law &Business event at the Law School in October to discussthe future of M&A in the post-credit-bubble worldbefore an audience of law and Stern business studentsand alumni.

Stephen Friedman, retired chairman of GoldmanSachs and current chairman of the Federal ReserveBank of New York and of global private equity firmStone Point Capital; Martin Lipton, founding partner ofthe law firm Wachtell, Lipton, Rosen & Katz; andJoseph Rice III, founder and chairman of private equityfirm Clayton Dubilier & Rice, served as panelists. Thediscussion was moderated by Brett Cole, a writer forThe Economist and author of M&A Titans: The PioneersWho Shaped Wall Street’s Mergers and AcquisitionsIndustry.

Reflecting on the current US economic turmoil, Ricenamed “human greed” as the cause and an abundanceof capital as a catalyst. Friedman attributed the crisis, inpart, to incentive structures that encouraged bad lendingand faulty business practices. “People will play the wayyou pay them,” he said, including banks, consumers,and rating agencies in the circle of blame.

Lipton predicted the crisis will last between three tofive years, describing the evolution of a new financialorder dominated by large banks surrounded by manysmall boutiques. “Capital raising will be in the hands ofthe big universal banks,” he said. “They will have thecapital and the networks to do it.” Panelists agreed thatM&A activity would eventually pick up.

MEASURING IMPACT: SOCIAL ENTREPRENEURSDISCUSS THE CHALLENGES

More than 150 entrepreneurs,investors, philanthropists, and academ-ics gathered in November for the FifthAnnual NYU Stern Satter Conference ofSocial Entrepreneurs. “As the field ofsocial entrepreneurship matures, meas-uring impact remains a significantchallenge for most organizations,” saidNYU Stern Clinical Professor JillKickul, the conference organizer anddirector of the Stewart Satter Programin Social Entrepreneurship in Stern’sBerkley Center for EntrepreneurialStudies.

Plenary keynote speaker MarkKramer, founder and director of FSGSocial Impact Advisors, said that thefailure of classical philanthropy can beattributed to the inaccurate perceptionthat problems can only be solved

through the nonprofitsector and the narrowphilanthropist mindset onhow to achieve socialchange. He cited evalua-tion and social entrepre-neurship as the two keysto unlocking the future ofthe nonprofit sector.

According to JasonSaul, founder and presi-dent of MissionMeasurement LLC, the sector isincreasingly becoming a ‘social capi-tal market’ in which organizationsneed to be focused on the outcomesthey produce and the measurementthat enables them to improve theirimpact.

Stewart Satter (MBA ’82), bene-

factor of Stern’s social enterprise pro-gram and member of Stern’s Board ofOverseers, presented the NYU SternSatter Social Entrepreneur of the YearAward to Darell Hammond, founderand CEO of KaBOOM! For the past 12years, Hammond’s organization hasused an innovative model to joinbusiness and local neighborhoods in

an effort to con-struct more than1,500 new play-grounds, skateparks, sportsfields, and icerinks acrossNorth America.

SternProfessor andAcademicDirector of theBerkley CenterWilliam Baumol

awarded the 2008 NYU Stern SocialEntrepreneur Lifetime AchievementAward to Bill Drayton, founder andCEO of Ashoka, a global associationof the world’s leading social entre-preneurs dedicated to advancing thefield of social entrepreneurship andthe citizen sector.

(From left to right) Brett Cole, Stephen Friedman, Martin Lipton, and Joseph Rice debatedthe future of M&A in the economic turmoil.

Stewart Satter (right) presented Darrell Hammond with the Satter Social Entrepreneurof the Year Award.

PRACTITIONERS AND SCHOLARS DEBATE MARK-TO-MARKET ACCOUNTING

Nearly 60 academics, profession-als, and journalists gathered in Octoberfor an NYU Stern Ross Roundtableexploring the economic impact of fairvalue, or mark-to-market, accountingpractices on the state of the US econo-my. Participants in the event, hosted bythe Vincent C. Ross Institute ofAccounting, represented the AmericanInstitute of Certified Public Accountants,

Bloomberg, Columbia University,NYU, PricewaterhouseCoopers, andStandard & Poor’s, among others.

The debate was spirited andinformative. Seymour Jones, clinicalprofessor of accounting at Stern,questioned whether all the “distur-bance” in today’s financial marketswas caused by fair value accounting.Stern Professor Stephen Ryan, a

proponent of fair value accountingpractices, said, “The alternatives tofair value accounting are bad in illiq-uid markets and not good in liquidmarkets.” He pointed to several bene-fits of fair value accounting, includingtimeliness, its ability to self-correct,and its capacity to account consis-tently for matched positions. Addi-tionally, he contended that fair value

accounting provides a good platformfor both mandatory and voluntary dis-closure.

Eli Bartov, Stern research professorof accounting, also supported fair valueaccounting, saying that the problemswith implementation of FAS 157 areminimal and can be fixed. ProfessorJames Ohlson, acting chair of Stern’saccounting department, pointed to adisadvantage of fair value accounting:“It’s very subjective, and it will oscillatewith political environments.” Despitethe continuing financial turmoil, SternExecutive-in-Residence John Biggs,former chairman of TIAA-CREF, warnedagainst Congress’s setting accountingstandards.

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NORWEGIAN FINANCE MINISTRY’S THOMAS EKELIDELIVERS FOURTH ANNUAL HAITKIN LECTURE

At the Fourth Annual Haitkin Lecture, economistThomas Ekeli, an investment director in the asset man-agement department of the Norwegian Ministry ofFinance, shared his experience managing Norway’s $400billion petroleum fund. The fund is earmarked as thecountry’s pension fund and represents 10 percent of the$4 trillion global market for sovereign wealth funds. Asthe only major fund of its kind with an independentCouncil On Ethics, it is an international model of trans-parency and principled investing. According to Ekeli, thefund was established to manage Norway’s oil wealthwisely, now and for future generations. He noted that formany countries, great mineral wealth leads to corruption,political instability, and economic stagnation. He creditsthe fund’s success to its strategic investment philosophyand ethics: The fund only invests abroad, buys smallstakes in multiple companies as a universal investor, dis-allows geopolitics as a driver of investment decisions, andchooses investments based on good corporate governanceand human rights, while screening out certain companies

that its Council On Ethics deems ethically incompatiblewith its purpose and goals.

The Haitkin Lecture on Business Ethics, establishedin 2004, is made possible through the generosity ofJeffrey M. Haitkin (BS ’68). The Lecture is dedicated tosupporting the continuing discourse on significantemerging issues in business ethics, bringing a distin-guished scholar to Stern annually to address timelynational and global issues.

(From left to right) John Biggs, SeymourJones, and Stephen Ryan explored the eco-nomic impact of fair value accounting prac-tices on the weak US economy.

Thomas Ekeli spoke about his experience managing Norway’s $400 billion petroleum fund.

“chief.” In 1995, he became CFO ofSmith Barney, after serving in a num-ber of senior finance roles at variousTravelers Group companies, includingCommercial Credit, Primerica, andSmith Barney. When Travelers mergedwith Citicorp in 1998 – at whichpoint Scharf was CFO of SalomonSmith Barney – he was named CFO ofCiti’s global corporate and investmentbank, which generated revenues of$21 billion in 1999. In 2000, he wasCFO of Bank One, and in 2002, heled the bank’s consumer bankingbusiness, helping rebuild the brandand banking staff and expanding thebranch and ATM network.

Scharf became CEO ofJPMorgan Chase’s retail financialservices upon its 2004 mergerwith Bank One. His operation –including Washington Mutual

– comprises more than 5,000 bank branches and13,000 ATMs, as well as relationships with morethan 14,500 auto dealerships and 5,200 schoolsand universities.

Among his current challenges is the post-mergerintegration of Washington Mutual, acquiredby JPMorgan Chase in September 2008,and, in this difficult economic period, itpresents problems and tremendous oppor-

tunities. According to

By Marilyn Harris

In 1987, barely out of college,Charles “Charlie” Scharf was theyoungest professional employeeat Commercial Credit Corp., thevenerable, if down-at-the-heelsBaltimore consumer finance com-pany then run by Sandy Weilland Jamie Dimon. The first per-son the company had hireddirectly from college in years,Scharf was in fact still a senior atJohns Hopkins University whenhe started working there part-time, having sent his résumé toDimon through family connec-tions. The experience, Scharfrecalled recently, was a littlelonely. “I was younger thanalmost everybody else by 20years,” he said. Upon reflection,noted the now 44-year-old executive, it was the bestpossible situation for a tyro: “My colleagues were sea-soned, and I got the benefit of their experience. Thathelped me mature in business faster.” Six months intothe job he was named Dimon’s assistant and “includedin every meeting, learning broadly about business andhow decisions get made.” His real-world education –and subsequent career – was well and truly launched.

Scharf’s upward professional trajectory has neverfaltered. Relied upon by Dimon, he has mastered asequence of jobs whose titlesusually startedwith

sternInTheCity

Fast Track to Success

Charlie Scharf heads up JPMorgan Chase’s retail financial services.

8 Sternbusiness

Scharf, “There was a lot of credit exposure there – $35billion and maybe more in losses – but there is enoughcushion that it should be okay.” Last December, he andDimon flew to Seattlewith the bad news of9,200 layoffs over thenext year. “It was hardeliminating thousands ofjobs, but you have to dothe right thing for theother employees,” hesaid. “I think peoplethink we treated themfairly.” The great oppor-tunity of the merger, he pointed out, is to create a trulynational franchise, leapfrogging into states whereJPMorgan Chase had lacked a retail presence.

Once the integration is complete, there is still therecession to get through. JPMorgan Chase has “done wellso far on a comparative basis,” said Scharf, “but there’sa long way to go.” Over the past two years, “there are alot of things we intentionally did not do, such as CDOs,option ARMs, etc., and that’s left us in relatively bettershape than some of our competitors.” He explained thatDimon’s philosophy of running a financial company is toplan as if the worst will happen and create what he callsa “fortress” balance sheet. When assuming risk, “we ask,‘If we’re wrong, will we be okay?’” One of the keys toemerging whole from the current economic crisis is to“stay out of trouble and avoid the land mines,” he said.“We will get through this cycle, though there will befewer banks. People shouldn’t bet against the financialsystem in this country.”

As much as Scharf has been mentored by the leadinglights of his industry, he has developed a philosophy ofhis own. In part, that was shaped by his Executive MBA

from Stern, which hecompleted in 1991 and,he said, helped put hiswork experience intoperspective. “In myexperience,” he reflected,“good business is allabout stepping back,asking questions, andaccumulating the expert-ise to make the best

decisions, whether those are business decisions or peopledecisions. Jamie says there’s a book on everyone and youjust need to read it. I would add that there’s always ananswer waiting to be found. You just need to do the workand seek it out.”

When he’s not working or contributing his expertiseto the boards of the Lyric Opera of Chicago, the NewYork City Opera, and Guiding Eyes for the Blind,Scharf prefers spending time at home in Westchester,New York, with his wife, Amy, and two daughters, whoare active in plays and musicals. Tennis is his sport,and rock and blues guitar his passion – that and wood-working, which he said he finds “very soothing.” He’sskilled enough to have made and installed the raisedpaneling and bookshelves in a home library, and hisnext project is a desk. With the mountain of profes-sional responsibilities facing him in the current bruis-ing environment, finding the time to escape to hiswoodshop might be the toughest challenge of all. ■

Scharf’s purview includes 13,000 ATMs.

“In my experience, good businessis all about stepping back,

asking questions, and accumulating the expertise to

make the best decisions, whetherthose are business decisions or

people decisions.”

Sternbusiness 9

The last few years have accelerated to fever pitchfor Les Morgenstein (MBA ’97). As president of AlloyEntertainment, he leads the entertainment brain trustbehind a rapidly growing roster of hottelevision shows and films, and a slewof the most popular books for adoles-cent girls. In 2008 alone, the companydebuted the second season of “GossipGirl,” its hit television teen drama,that recently got its own spinoff, tosome of the CW Network’s highest rat-ings ever; released the sequel to teengirl flick “The Sisterhood of theTraveling Pants” and two other moviesit produced; and launched a one-hourcomedy “Privileged” on theCW Network.

Alloy Entertainment,a subsidiary of AlloyMedia + Marketing,doesn’t just produce“Gossip Girl,” it alsodeveloped the epony-mous best-selling novelseries by Cecily vonZiegesar that inspiredthe program.Revolvingaround thelives ofprep-schoolsocialitesgrowing upon NewYork City’sUpper East

Side, “Gossip Girl” wasdesignated the “BestShow Ever” in April2008 by NY Magazineand the Teen ChoiceTV Show Drama of2008.

Gossip Girl hasbeen a successfulmodel for AlloyEntertainment.The company’slargest busi-ness is books,which include

the series The A-List, The Clique, The Luxe,

and Pretty Little Liars, andoften the company’s TV andfilm projects are based onthese literary properties. Thisstrategy has helped the com-pany make inroads intoHollywood, because itsmovies or TV shows arebased on books that alreadyhave followings, and, there-fore, potential “pre-sold”audiences. “The Gossip Girlbooks had sold five millioncopies by the time the showpremiered,” said Morgenstein.

At one point last summer, Alloy Entertainment hadnine books on The New York Times children’s best-sellerlist. The company is a book packager that crafts propos-

als for publishers and creates plotlines and charactersbefore passing them to a writer or group of writers –

in much the same way that dramas and sitcomsare written for TV. A 2008 Forbes article

reported that “a single Alloy book can gener-ate multiple six-figure revenue streams: the

Les Morgenstein’s company, Alloy Entertainment, produces theGossip Girl books and hit TV show, as well as a growing rosterof popular creative content.

10 Sternbusiness

sternInTheCity

Gossip Girl’sGoverning GuyBy Jenny Owen

Sternbusiness 11

initial book deal, plus a fee for selling the televisionrights, a purchase price and a producer’s fee for thepilot, a per-episode rights fee and producer’s fee, anda cut of the overall profits.”

“The secret, if there is one, is in the initial creativeprocess,” Morgenstein explained. “And as managers,we’re very diligent about what we do and what makessomething a commercial concept that not only willhave the potential to be a hit, but also have the poten-tial to be a hit with multiple titles that then transitionsto film or television or spin-offs with other opportuni-ties.”

Morgenstein began working in publishing rightafter graduating from Sarah Lawrence College. Heworked for a company that packaged the Sweet ValleyHigh teen books popular in the 1980s, while at thesame time attended The City College of New York fora master’s degree in English and creative writing. Soonafter earning an MBA from NYU Stern, he bought thecompany he worked for and renamed it 17th StreetProductions. “Around this time, which was the mid- tolate-’90s, there was a demographic boom. Variouspockets of teen media were really taking off: the WBwas strong with ‘Dawson’s [Creek]’ and ‘Buffy [theVampire Slayer],’ Teen People had launched reallywell, and boy bands like the Backstreet Boys werehuge, but publishing was not,” said Morgenstein. “Sowe identified some big shifts we wanted to make inthat business – primarily we wanted to become a com-pany that was developing content. By the latter part ofthe ’90s, we formed a relationship with Alloy to pro-mote our books on their website and in their cata-logues and in outgoing orders, and we, in turn, puttheir name on our books. Soon after, Alloy went public

and, recognizing our similar goals, then acquired 17thStreet Productions.”

With a background in both business and developingcreative content, Morgenstein is appropriately positionedto lead Alloy Entertainment. “I had a very liberal artsbackground and discovered early on in my career that Iwas very entrepreneurial and wanted to run my own busi-ness, but I didn’t know anything about business,”Morgenstein explained. “Much of that you learn on thefly, but fundamentals like accounting and finance, youcan’t. That’s really why I went to Stern – and it’s beenintegral to what I do.”

Morgenstein’s business competence has proven espe-cially useful in helping Alloy Entertainment weather thecurrent economic turmoil. “The book business is down.Retail traffic is way down,” he explained. “It’s impactingroyalties we’re earning on our best sellers, and it’s impact-ing what publishers are willing to pay for that next title asthey look at their businesses. And the advertising climatetoday compared to six months ago is very different. It’salso harder to get a commitment from the TV networks.

“Nevertheless, long-term, we’re in a very good positionbecause we create commercial intellectual property.Whatever changes are made in the entertainment busi-ness, however distribution evolves, it’s going to need greatcontent,” he asserted.

Developing great content requires a strong creativeteam, which Morgenstein noted, is best found in NewYork City. His company’s New York location “has defi-nitely impacted the type of talent we’re able to hire,” hesaid. “We thrive on the creativity of our editorial staff andNew York attracts a very high caliber of young executives.I don’t think we would have experienced the same successhad we been in an office park in New Jersey.”

There’s no dearth of content in Alloy Entertainment’sslate of offerings. It has about a dozen TV projects indevelopment with major networks, as well as a number ofkids’ movies and romantic comedies under way with topfilm studios. It’s also doing new-media projects like Web-isodes. “We’re putting together a business model based onthat,” said Morgenstein. “So there will be some businessmodel shifts, but at the heart of it, we’ll continue to dowhat we do.” If that’s any indication, Morgenstein’s level ofactivity may be at fever pitch for a good long while. ■

From left to right: As a producer, Morgenstein was on the movie set of “The Clique” withnovelist Lisi Harrison and TV talk-show host and former supermodel Tyra Banks, also aproducer of the film.

The host city of NYU Stern’s Global Alumni Conference in2009, metropolitan Barcelona is a glittering port city of3.5 million people, a leading business, cultural, andtourist center, not just of Spain, but internationally.There is a mayor of Barcelona, who is elected, andbehind him there is Andreu Puig, the executive who runsthe city. Puig is responsible for managing Barcelona’s 2.6billion euro budget, 13,000 employees, public services,and urban and economic development.

1. Two weeks after you started your job, in July 2007,there was a blackout in Barcelona that affected 260,000people and lasted three days. What did you learn fromthat? It was a quick lesson in getting to know the organizationand how to get things done. I had to deal with federal,local, and state agencies and police, firemen, social assis-tance, and power companies. Fortunately, there were nomurders, no looting, and fewer traffic incidents than onnormal days. And after the crisis, we established a projectthat we call the three S’s: supply, security, and system. Wemay be the only city with a fully coordinated diagnosticcapability for our infrastructure.

2. What were some of the lasting effects of the Olympics,which Barcelona hosted in 1992?It was a great experience, and we were able to exploit thatopportunity. We emerged from the number two city inSpain and the capital of Catalonia to become a major inter-national city. Our goal has been to maintain and takeadvantage of that position. We have built on a very effec-tive brand image, attracting tourism as well as investments.We are now one of the top cities for living and business.

3. What is driving the city’s growth now? Barcelona has become the European capital of theMediterranean. Last November, we were chosen by theEuropean Union as the site of the European Agency forMediterranean Cooperation, which includes North Africa.We have the second busiest harbor in Europe, and we arethe southern gateway for Asian products to enter Europe.We are the city of reference for business development, cul-ture, and architecture.

4. How would you like to see Barcelona evolve in thecoming decades?

We want this to be the city with the most opportunities for itsresidents, with the quality of life here the same for everybody.We are working to ensure the same standards for transporta-tion, infrastructure, services, public space, commerce, resi-dential areas, and neighborhoods. A socially cohesive societyis a sound base to boost economic growth. We have done thisacross our 10 districts and are now working on our 73 neigh-borhoods.

5. What is the greatest challenge you face in your jobtoday?We think what makes the city work is not just the city coun-cil but everyone who operates in the city – the businesses, theNGOs, the social service organizations, the civil societies –many more stakeholders than in the private sector. It takespublic/private cooperation to develop a consensus and toforge a common vision as to where the city should go. In thespirit of the Olympics, a “Model Barcelona” project was initi-ated [an internationally renowned combination of urban poli-cies], and advancing it is a top priority.

6. Barcelona is hosting Stern’s Global Alumni Conferencein June, and you are on the host committee. What kind ofimpression are you hoping alumni will take away?Three things: First, the local flavor of our Catalan culture –our language, our cuisine, and the sea. Second, our history,from Roman and medieval times to Gaudí. And third, thefuture: We are a place of tremendous business opportunity.

7. What could American businesses learn from Spain’s,and vice versa?We can offer creativity and innovation, not only technical butprocess innovation, a way of seeing business within a culture.We think branding is one of our strong points – how to buildbrands with special tastes and values. From America, we canlearn more on how to become global. We can also borrow agreater sense of urgency, as the world turns very quickly.Americans are very good at being flexible.

8. How did your Stern experience contribute to yoursuccess?That experience is now more useful than ever, especially inthe global environment, which is increasingly complex andturbulent. Stern helped me to understand how the differentelements of society are interconnected, which is necessary tounderstand change. It also taught me values and socialresponsibility which are also very important.

8QuestionsANDREU PUIG SABANES (MBA ’91), general manager, City of Barcelona

12 Sternbusiness

Sternbusiness 13

Innovating Around

InnovationThe Berkley Center Celebrates

Its First 25 Years

By Marilyn Harris

hile still a student atNYU Stern, Yorick Ser(MBA ’05) developedCollegeMailer, a pow-

erful software tool, to help his entre-preneurs’ club officers better man-age the club’s activities. BecauseCollegeMailer was well designed andeasily adopted by the students,Stern’s Student Activities Officedecided to buy the system and pro-

vide it to all the other student clubs.And with that, Novalsys, Ser’s soft-ware development company, waslaunched.

For two years after graduation,Ser ran the company part-timewhile toiling away in the Londontrading office of a major bank. “Thesalary was good but I wasn’t happy,”he recalled. So in June 2007 Ser quithis day job and returned to the

States. That fall, he entered thebus iness p lan compet i t ionrun by Stern’s Berkley Centerfor Entrepreneurial Studies. Theprocess was grueling, but before itwas all over, Ser had completed hisbusiness plan, made it to the semi-finalist round, and landed his sec-ond client, the University ofMichigan. Today, Novalsys licensesits software eCampusGroups,

W

1982: Twenty-one students enrollin the first entre-preneurshipcourse offered byStern, Patterns ofEntrepreneurship,taught by ZenasBlock.

1983: The Price Institute for EntrepreneurialStudies makes an endowment gift that lays thefoundation for an entrepreneurship center.

1984: The Center for Entrepreneurial Studiesis officially founded. Ian MacMillan is appoint-ed director. The Center immediately becomesknown for funded research and publishing theJournal of Business Venturing.

1993: Stern alumnus, NYUTrustee, and Chairman of theStern Board of OverseersWilliam R. Berkley (BS ’66),chairman and CEO of W. R. Berkley Corporation,presents a naming gift to develop cutting-edgeentrepreneurship courses, co-curricular pro-grams, and research activities. The BerkleyCenter for Entrepreneurial Studies is born.

Entrepreneurship at Stern Through the Years

14 Sternbusiness

eCampusNet, andeAlumniAffairsto top schoolsaround the coun-try.

Successes suchas Ser’s – and the

number and vari-ety of students’other innovativeideas for startups –

are especially rewarding for those atthe Berkley Center as it marks 25years at Stern this year.“Acknowledging the talented stu-dents and committed faculty whoare working to bring these ideas tolife is a special way to celebrate our25th anniversary,” said Jeffrey A.Carr, clinical associate professor ofmarketing and entrepreneurshipand an entrepreneur himself. Carrhas served as the Center’s executivedirector since 2007. “Our mission atthe Berkley Center is to nurtureentrepreneurial talent and, throughresearch, to add to the knowledgebase. In the classroom, we teach stu-dents the skills needed to start abusiness, but when it comes toentrepreneurship there is no substi-tute for actually doing the work.”

The Berkley Center, establishedin 1984, was organized to createnew knowledge in the field of entre-preneurship and innovation, to pre-pare the next generation of entrepre-neurial leaders in the business and

up, Iconology, provides software andweb solutions that connect comicbook enthusiasts with retailers andpublishers. In addition to the cashreceived, Steinberger was able toleverage the coaching, mentoring,networking, and pro bono servicesthe program provided. “Not only didwe meet our chief source of fundingthrough the Berkley Center and ourwork in the business plan competi-tion, but one of our judges also fund-ed us at a very early stage,” he noted.

The role of innovation and start-up companies in the US and globaleconomies can hardly be overstat-ed. “The small firm, home of theindependent entrepreneur and theindependent inventor, has been theprimary source of the technicalideas and radical innovations thatserve as the foundation for theunprecedented growth perform-ance of the world’s industrialeconomies,” Baumol said. “Thedata also suggest that small firmsare the major source of new jobs.”According to a recent survey bythe Ewing Marion KauffmanFoundation, the world’s largestfoundation devoted to entrepre-neurship and a major funder of theBerkley Center, more than 70 per-cent of voters say the health of theeconomy depends on the success ofentrepreneurs, and many see entre-preneurs as the answer to the cur-rent financial crisis.

social sectors, and to provideintellectual leadership for the busi-ness and academic communities.Programs for teaching entrepreneur-ship are in their infancy, and Stern’sBerkley Center is “virtually alone inthe US and probably the world” in itsefforts to systematize such methods,said William Baumol, Harold PriceProfessor of Entrepreneurship, pro-fessor of economics, and academicdirector of the Berkley Center. “Wewant to connect teaching methodswith subsequent careers,” he said.

Accessible to students and alumnialike, the Berkley Center’s flagshipprogram is its rigorous, eight-month-long business plan competition, nowin its 10th year. A record-setting 450students and alumni entered thisexperiential learning program lastfall, competing for a share of seedmoney to launch their ventures.Thanks to the generosity and fore-sight of Stern Overseers Ira LeonRennert (MBA ’56, Parent ’00),chairman and CEO of The RencoGroup, Inc., and Stewart Satter (MBA’82, Parent ’10), CEO of ConsumerTesting Laboratories, Inc., $175,000in seed money is available this year towinners of the competition and willjump to $200,000 next year.

David Steinberger (MBA ’08) wasone of those winners in the 2006-2007 competition. “The seed moneyfrom the competition was extremelyhelpful,” said Steinberger. His start-

1998: The First Annual NYU Stern BusinessPlan Competition is held. Eighty-eight teamsvie for $50,000 in seed money.

1999: Reflecting the growing prominence ofentrepreneurship research and study at Stern,a new academic area, Entrepreneurship &Innovation, is introduced.

2000: Stern alumnus and Overseer Ira Leon Rennert (MBA ’56, Parent ’00), chairman andCEO of The Renco Group, endows the business plan competition. His gift enables$50,000 in seed money to be awarded annually.

2000: The Price Institute for Entrepreneurial Studies establishes a $100,000 endowmentin support of the Harold Price Entrepreneurship Award. This student award is given annu-ally to an MBA student in recognition of outstanding achievement in entrepreneurshipstudies and leadership.

Alumnus Yorick Serlaunched his softwaredevelopment company,Novalsys, with the helpof the Berkley Center.

Sternbusiness 15

Academic InnovatorsThe late Professor Zenas Block

was an early proponent of teachingentrepreneurship at Stern. Soonafter offering to teach a course incorporate venturing as an adjunctprofessor in 1981, he organized andled the faculty task group that, withan initial $500,000 grant from theLouis and Harold Price Foundation,established the building blocks fortoday’s Berkley Center. Block wassupported in his efforts by the lateGloria W. Appel, president of thePrice Foundation and later a mem-ber of Stern’s Board of Overseers.“The goal we set was to become asignificant center for research inthe area, because entrepreneurshipwas not regarded as academicallyrespectable,” Block recalled someyears later. He started a competi-tion for the best academicpaper, held retreats inwhich students presentedbusiness plans, and, mostsignificantly, developedand taught two electivecourses: Patterns ofE n t r e p r e n e u r s h i p ,and Entrepreneurshipand Venturing inCorporations.

The entrepreneur-ship program at Sternmade another quan-tum leap in 1993,when Stern alum-

Five of 25 Tips for Entrepreneursfrom EntrepreneursVisit www.stern.nyu.edu/berkley for the remaining 20 tips.

1. Listen critically to others but don’t let peopledissuade you from pursuing your own ideas.Be willing to go it alone.

-Stewart Satter (MBA ’82, Parent ’10)CEO, Consumer Testing Laboratories

2. Just remember that everything takes twiceas long and costs twice as much as youexpect it to.

-Matt Heyman (BS ’84) President, Grupo Cinemex

3. Set clear achievable goals for each day,month, and year. Let nothing stand in the wayof achieving those goals.

-Liz Elting (MBA ’92) Co-founder/Co-CEO, TransPerfect

4. Be responsive and treat everyone with kind-ness and respect.

-Robert J. Simon, Sr. (MBA ’84) Senior Managing Director, Bradford Equities

Management, LLC

5. Follow your gut. So much about doingwell in business is about making gooddecisions – for your company and for you.

-Mary Ellen Georgas (MBA ’93) Principal/Owner, Georgas Consulting, LLC

2001: The Berkley Centerlaunches a social entrepreneur-ship initiative offering coursesand programs for the growingnumber of students and alumniwho wish to use business skillsto create innovative approachesto tackling societal problems.

2003: Entrepreneurship is offered as a gradu-ate-level specialization in response to strongand growing interest among students.

2005: World-renowned econo-mist, researcher, and prolificauthor William J. Baumol joinsthe Berkley Center as academicdirector.

2002: Stern alumnus and Overseer Stewart Satter(MBA ’82, Parent ’10), CEO of Consumer TestingLaboratories, provides seed funding to launch theSatter Program in Social Entrepreneurship. Today, theSatter Program supports the annual Social VentureCompetition, which awards the $100,000 Satter Prize;the annual Conference of Social Entrepreneurs; andthe annual Social Entrepreneur of the Year Award.

nus, NYU Trustee, and Chairman ofthe Stern Board of OverseersWilliam R. Berkley (BS ’66), chair-man and CEO of W. R. BerkleyCorporation, presented a naminggift to develop cutting-edge entre-preneurship courses, co-curricularprograms, and research activities.Five years later the first formal busi-ness plan competition was held, with88 teams vying for $50,000 in seedmoney. In 2000, an endowment byRennert made that $50,000 anannual award, and in the same year,the Price Foundation established a$100,000 endowment to support theHarold Price EntrepreneurshipAward, which is given to an MBAstudent pursuing an entrepreneurialcareer who has attained outstandingachievement in entrepreneurial stud-ies and student leadership.

The Berkley Center Advisory Board: (from left to right,back row) Vern Kennedy (MBA ’94), StephenMcCarthy (MBA ’79), and Markus Deutsch (MBA ’91),(second row) Mary Ellen Georgas (MBA ’93), LorettaPoole, and Robert Simon (MBA ’84), (front row)Jeffrey A. Carr, Cynthia Franklin (MBA ’92), andStewart Satter (MBA ’82, Parent ’01); not pictured:Matt Heyman (BS ’84) and Jill Kickul.

16 Sternbusiness

2008: More than 450 students,representing 156 teams, enter theannual NYU Stern Business PlanCompetition. Today, the competi-tion is one of the largest of itstype, having awarded more than $1 million in seed money and pro bono services since its inception 10 years ago.

As financial support grew, so didprograms. A social entrepreneurshipinitiative, now headed by ClinicalProfessor of Management andOrganizations Jill Kickul, waslaunched to offer programs aimedat creating innovative approachesto solving societal problems. Satterfunded the Satter Program in SocialEntrepreneurship that supports itsown competition, with a $100,000prize, as well as an annual confer-ence and award. A recent conferenceon social entrepreneur-ship was oversub-scribed. In January,more than 500 alumniand students packed alecture by microfi-nance guru and NobelLaureate MuhammadYunus. And last fall,when 100 studentsapplied for 20 spots ina new 12-week labo-ratory on innovationand entrepreneurship, the Centerwas persuaded to double registra-tion. Underpinning this growth havebeen donors such as Beny Alagem(Parent ’09), an entrepreneur andco-founder of Packard BellElectronics, whose $3 million giftsupports a broad range of programs,and Ira Rennert, who recentlyexpanded his support of the BerkleyCenter with a $3.5 million gift to

support the business plan competi-tion and endow a faculty chair inentrepreneurship.

The Next 25 Years Interest in entrepreneurship has

grown dramatically at Stern and it’sa trend that is expected to continueand even accelerate. “Students takeone look at what’s happening intoday’s economy – once venerablecompanies disappearing over night,tens of thousands of high-paying

jobs simply vanishing – and sud-denly entrepreneurship doesn’tseem like the risky way to go,” saidCynthia Franklin (MBA ’92), seniorassociate director of the BerkleyCenter. An entrepreneur who start-ed a successful business shortlyafter receiving her MBA, Franklinunderscored the lesson: “It’s allrisky. More students are concludingthat if I’m going to assume risk,

why not do so while building a ven-ture that is my own.” Another con-tributing factor to the popularity ofentrepreneurship she cited is therock star status of innovators suchas Steve Jobs, Richard Branson,and Sergey Brin, who have helpedmake the dream of starting andgrowing a successful company seemmuch more accessible.

In response, the Center has cre-ated more opportunities. As of2008, both undergraduate and

graduate students canchoose to specialize inentrepreneurship, and aspecialization in socialinnovation and impactwas offered for the firsttime to MBA students.

As the Berkley Cen-ter’s 25th anniversarypasses and its nextquarter century begins,both Carr and Franklinare focused on its role

as a complete resource for nascententrepreneurs. As part of that plan,they are recruiting mentors andcoaches from among the alumnipopulation who will be matched upwith students hoping to nurturenew ideas.

For his part, Baumol has co-edited the first of a three-volumeseries of books on entrepreneurship,History of Entrepreneurship: From

2008: A gift from Ira Leon Rennert dou-bles the business plan competition prizeto $100,000 and establishes the School’sfifth chair in entrepreneurship.

“Students take one look at what’shappening in today’s economy –

once venerable companies disap-pearing over night, tens of

thousands of high-paying jobssimply vanishing – and suddenlyentrepreneurship doesn’t seem

like the risky way to go.”

Sternbusiness 17

Celebrating 25 Years: Support for the Berkley Center Like every good entrepreneur, Professor Zenas Block, from the outset, had a sound academicand co-curricular organizational plan as well as an aggressive fund-raising strategy to launchthe Center. Starting with a most generous seed gift from the Louis and Harold PriceFoundation, the Berkley Center today is a success because Stern alumni and friends havedreamed, invested, and labored with us as we discover, teach, grow, and launch. Below is alist 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.

IndividualsBeny Alagem (Parent ’09) Gloria W. and Edwin M. AppelWilliam R. Berkley (BS ’66) Mr. and Mrs. Richard BlockProfessor Zenas BlockKaren Chase (MA ’93 (GSAS))Michael R. Cunningham (MA ’96, PhD ’05

(Steinhardt))Markus Deutsch (MBA ’91)Barry K. Fingerhut (MBA ’69)Professor Avijit GhoshJay Golding (MBA ’69)Mr. and Mrs. Howard L. GoodkindCharles T. Harris IIINorman Himelberg (BS ’58)Ilan Kaufthal (MBA ’71)David D. KimballProfessor Matthew KleinLouis KrouseCharles LazarusSusan E. Miller (MBA ’84) Daniel A. Nathanson (MBA ’75)Thomas B. Pennell (MBA ’93) Loretta PooleKenneth A. Preston (BS ’50)Inge and Ira Rennert (MBA ’56, Parent ’00)Laura Robbins (MBA ’05)Stewart Satter (MBA ’82, Parent ’10)Robert J. Simon (MBA ’84)Frederic SlaterJonathan S. Smiga (MBA ’91)Paul SperryIrwin Tantleff (MBA ’91)

Roy B. Trujillo (MBA ’93)Michael A. Tunstall (MBA ’86)Robert VukovichProfessor Jeremy WiesenCarol and Lawrence Zicklin

FoundationsAtlantic PhilanthropiesBlue Ridge Foundation, Inc.Citigroup FoundationDavid Himelberg FoundationEwing Marion Kauffman FoundationHouston Jewish Community FoundationJewish Communal FundLJ International Inc.Louis and Harold Price FoundationMerrill Lynch & Co Foundation IncNational Christian FoundationNew York Community TrustPublic Forum InstituteThomas L. Thomas Family Foundation

CorporationsAmerican Express Barclays CapitalBreitling VenturesDeloitteThe Dexter CoporationEden, LLCEuclidSKnox Lawrence International, LLCLowenstein Sandler PC Pennell Venture Partners, LLCYahoo!

Mesopotamia to Modern Times, whichwill be published this year by thePrinceton University Press under theBerkley Center imprimatur, and he islooking forward to a period of height-ened activity at the Center. “We aredesigning a very ambitious, long-range program for carrying out therequired research and for designingimaginative, systematic programs forteaching entrepreneurship,” he said.

Such plans bode well for would-be entrepreneurs at the Center. Ashe closes in on his second round offinancing, Iconology’s Steinbergersaid, “My three years at Stern weredefined by the competition. Itchanged my direction, connected mewith high-performing, like-mindedentrepreneurs, and helped me definemy direction in my working life.Those were memorable Stern yearsfor me, and it’s thanks to theBerkley Center.” ■

Alumnus David Steinberger (left) and his partners credit theBerkley Center’s business plan competition with helping themstart their company, Iconology.

2008: An endowment from the Beny Alagem (Parent ’09)Family provides support for the Innovation & Entrepreneur-ship Lab and business plan competition programming.

2008: The NYU Stern Social Venture Competition cele-brates its 5th anniversary. More than $500,000 in seedmoney and services has been awarded to promising socialenterprises since it was started.

2009: Princeton University Press will publish the first in a series of booksunder the Berkley Center imprimatur, the much-awaited History ofEntrepreneurship: From Mesopotamia to Modern Times. Co-edited by WilliamJ. Baumol, it will be among the first volumes (perhaps the first) on the subject.

2009: The Berkley Center for Entrepreneurial Studies celebrates its 25thanniversary.

18 Sternbusiness

Leaving a Stronger SternA 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

Dynamics, and writes a weekly col-

umn on economic matters at

Forbes.com. Cooley announced in

December that he would be stepping

down as dean and returning to

research and the classroom at the

close of the 2008-2009 academic year.

Dean Cooley was interviewed in February by Joanne Hvala, associate dean,marketing and external relations.

Joanne Hvala: Throughout your tenure as dean, you’ve talked about business as the most impor-

tant force for social change. What exactly do you mean by that and why is it so important to you?

Dean Thomas Cooley: It is important to me personally because I want to be engaged in an activ-

ity that I think of as contributing something to society; that is part of my mission in life. A lot of peo-

ple think of business as solely the pursuit of personal gain. Personal gain is one element of the busi-

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-

ments into doing what is good and right for society. The whole of the emerging green economy is a

case in point.

Sternbusiness 19

JH: How has Stern been leading the dialogue on the understanding of and

solutions for the current economic and financial crisis?

TC: First of all, we can claim to be the intellectual home of people who foresaw

the crisis and acted on their understanding – both Nouriel Roubini, a professor

of economics here, and John Paulson (BS ’78), one of our alumni, are exam-

ples. More broadly, we are in the enviable position of having a superb research

faculty whose work in creating knowledge is matched by a deep understanding

of the institutional setting of business. Our faculty truly understands the inter-

locking nature of complex issues.

Whether the subject is marketing, man-

agement, finance, or economics, our

professors have a willingness to speak

out and articulate views about policy in

the world of business. I think that’s

served us well in this crisis.

JH: Talk about the White Papers

Project, which has been an extraordi-

nary faculty response to the crisis.

TC: The White Papers Project (see

page 22) came as a response not just

to the crisis itself, but to the real need

we had for clarity. I can’t begin to tell

you how many media calls the School received as the crisis unfolded. People

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

to address the failures of the regulatory system and the market imperfections

that led to this crisis and that it was important for us to be proactive and try to

play a role in shaping how policy responds. So, together with my colleague Ingo

Walter, I articulated the view that it was important for us to do something and do

it quickly. He and I convened a small group of people, and we had this idea of

writing a series of white papers on what were initially 10 different topics. That

was where it started. Soon it expanded to 18 topics under discussion by a group

of more than 30 faculty members working together to address the issues and the

policy prescriptions that we think make sense. A coalition of the faculty was will-

ing to work collaboratively on one of these topics. Our goal was to be ready as

the new administration came into power and began to rethink the important

issues. We held a number of day-long meetings, with lots of back and forth and

internal dialogue. The result is this book that we produced in record time, which

contains, I think, some very good ideas. We started this conversation at the end

of October and had a draft in place by the week after Thanksgiving, with a pro-

duced prepublication version distributed before the University closed in

December. In an academic context, this is about as fast as I’ve ever seen a series

of fresh ideas hammered out and brought to the public.

JH: One of the things you’ve talked about, especially in conjunction with the

White Papers Project, is the value of an independent voice. Can you talk about

the value of having that independent voice from an academic institution, espe-

cially in light of what’s going on in the

world?

TC: One of the reasons that the public looks

to us is that they can’t cut through the

cacophony of sound-bites, interest groups,

and partisanship. Society needs institutions

that will step back and take a dispassionate,

nonpartisan look at how things are working,

especially in times of crisis. That’s one of

the reasons we have universities. When I

first took over as dean I wrote that we have

a fiduciary duty to the truth. Institutions like

ours are valuable because we can take a

dispassionate view and look at the way the

world works and think about the way the

world ought to work, without the influence of politics or special interests.

JH: Last April, Stern completed the largest fundraising campaign in the School’s

history, raising over $190 million. What have those resources enabled Stern to

achieve?

TC: On the human capital side, resources have helped us to fund some 23

named professorships and a large number of endowed research fellowships.

These are essential to attracting and retaining the very best scholars in the

world, and we’ve been quite successful at building our faculty. We’ve hired more

than 90 faculty members in the seven years I’ve been dean, which is a stunning

infusion of talent. The resources have also helped to fund more scholarships for

undergraduate students and for graduate programs that enable students to study

abroad. We’ve also been on a major campaign to improve our physical space,

which gets very heavy usage and constantly needs refurbishing – some areas

hadn’t been touched for many decades. We poured a lot of resources into

transforming it, and we’ve actually increased our total physical space by at

least a third already.

“

”

A lot of people think of business as solely

the pursuit of personal gain.Personal gain is one elementof the business world, but Iprefer to view business as themost powerful institu-tion for improving the well-being of people.

20 Sternbusiness

JH: What are the advan-

tages 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 –

both as a classroom and a laboratory – and it informs our research and teach-

ing. We have access to a stunning array of practitioners who talk to our students

about real work experiences. Our students are exposed not just to the world of

banking, finance, and Wall Street, but to consulting firms, nonprofits, arts

organizations – for instance, they learn how businesses like the Metropolitan

Opera work and to understand luxury retailing. We take full advantage of an

incredibly enriching environ-

ment.

JH: Looking more broadly,

Stern has made some partner-

ships with schools and compa-

nies around the world. How

have these global partnerships

enhanced the School?

TC: Global business education

is in great demand and we have

been steadily building our glob-

al portfolio for the past eight or

nine years. Our TRIUM program

is one of the most sought-after

executive education programs in the world. It’s enabled us to form great part-

nerships with two other outstanding schools, the London School of

Economics and HEC Paris, and to attract and capture as part of the Stern

alumni and student body an incredibly diverse set of senior managers from

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

to develop Stern’s reputation in Asia. We have two new programs coming

online in Europe targeted at very specific areas of finance, which I think are

badly needed programs. And we have developed executive programs for com-

panies in India and elsewhere in the world.

JH: Stern admissions have set new records – our undergraduate SAT scores

have never been higher and the selectivity of our graduate students has risen

over the years. Why do you think Stern is a magnet for these bright and accom-

plished students?

TC: It’s always the quality of the faculty, the programs, and the experience that

matters to students. Obviously,

people care about reputation,

and ours has soared, driven by

improvements in the quality of

our faculty and programs, and

increases in the visibility of

NYU as a very desirable desti-

nation university. But the other

thing that I think is particularly

telling is the quality of the stu-

dent experience, beyond the

education. We’ve worked very

hard to build a sense of com-

munity and a positive experi-

ence for our students so that

they’re really happy to be here

and don’t see it as just something they’re doing for a while. And when they

leave, they feel a connection that will continue for a long time. We know that

from talking to our students and measuring their experience. It’s really an

important part of the value proposition for Stern.

JH: What do you see as the major challenges facing business education today?TC: I think business education always faces a challenge when the economygoes through a cycle. This is a particularly severe cycle, so the questions thatpeople are going to raise are, “If something like this can happen, is it the fault of

“

”

I think business education always faces a challenge when

the economy goes through a cycle....One of the things this crisis teachesus is that business educators do haveto think about how to teach people tohave dynamic, forward-looking habitsof thought, because a lot of bus-iness education is inherently backward-looking.

Sternbusiness 21

business education? Are we teaching people the right things? Do they leave herewith the right kinds of values? Do they have the right kinds of tools?” One of thethings this crisis teaches us is that business educators do have to think abouthow to teach people to have dynamic, forward-looking habits of thought,because a lot of business education is inherently backward-looking. Business isa dynamic social construct that has changed dramatically and is going to con-tinue to change dramatically. The challenge is to give people the right analyticaltools, and to teach them to be forward-looking and to know the right questionsto ask. It’s not a static profession.

JH: As you reflect on your tenure as dean, what are you the proudest of? TC: I’m most proud of how successfully we were able to work together as ateam and how we were able to unite around a set of common goals and create asense of community, pride, and confidence that we know what we’re doing, andwe’re doing it well. I think we’ve really built the faculty and the student body andthe administrative framework for the School in a way that has enhanced its repu-tation, and made it a wonderful place to be a student, an alum, a professor, or anadministrator. I’m really proud of that!

JH: What’s been your most gratifying aspect of the job?TC: The most gratifying aspects have been the incredible people I’ve gottento meet and make friends with among our alumni and students and thesense of mutual respect and purpose that I feel. They’ve been wonderfullysupportive, full of creative ideas, energy, enthusiasm, and astonishingaccomplishment. I’ve had the opportunity to meet so many people who aresuccessful in many, many dimensions. Having had the opportunity to leadsuch a dynamic and diverse institution has also been a personal growthexperience for me.

JH: What have you enjoyed most about meeting the alumni, in particular? TC: I’ve most enjoyed being able to go to alumni and say, “Here we are, we’reyour school, we’re doing great things, and your success is something we’re

proud of. Be engaged with us, be involved with us, and help us achieve thismission.” The responsiveness of our alumni to that message has just beenextraordinary.

JH: Is there a particularly memorable moment of your deanship?TC: I met an alumnus in India named Abraham George (MBA ’73, PhD ’75). Ivisited a school he was running for the children of the destitute in the country-side near Bangalore. I didn’t know Abraham George yet and I hadn’t been toowell briefed on his school and his other efforts. It was a very moving experienceto see what he was trying to accomplish. Here was an alumnus who had beenenormously successful in business, who believed firmly in the business propo-sition and the value of markets and of education, and who was trying to trans-form, in his way, a part of society that has been left out. It was the ultimateembodiment of the proposition that business is an important force for socialchange. And, of course, Abraham has become a friend and his many childrenhave become very important to me as well.

JH: What would you most like to see happen next for the School over the nextfive to 10 years?TC: I would like to see the School become even more recognized as the intellec-tually lively go-to place that people look to for knowledge and insight about theworld of business. Hopefully the School will continue to influence both policyand practice. We need to focus on thought leadership and community. I thinkthat mission is more important than any particular programs. I am proud of theprogress we have made, but there is much to be done. I am sure my successorwill take on this challenge with enthusiasm.

JH: What’s next for you?TC: My plan is to go back to teaching. I am going to take some time off, finishwriting a book and other work, and spend a bit more time at the Council onForeign Relations, but I will return to the faculty and be here to teach and tosupport whoever is leading the School next. I’ve invested so much here, and Ifeel so passionate about Stern. It is a wonderful institution. ■

From left to right: Dean Cooleymet with students at a Dean’sRoundtable luncheon; he dis-cussed the global economy withhis thesis advisor, Nobel LaureateEdward Prescott at a Japan-USCenter event; he met with alumnusAbraham George at a student clubevent centered on India’s develop-ment; and he discussed how to fixthe financial crisis with financeprofessor Roy Smith and a panelof experts from The Economist andthe Council on Foreign Relations.

What does “thought leadership” look like?Last October, as the crisis in theworld financial system continued tounfold, it became clear that NYUStern faculty were playing an impor-tant role in shaping the dialogue.Nothing had torn apart the market withsuch destructive force since the 1930s, andthe conventional wisdom about how thingsare supposed to work in a well-functioningsystem was being challenged. MacroeconomistDean Thomas F. Cooley and Vice Dean ofFaculty and finance professor Ingo Walter decid-ed that the financial disaster provided a uniqueopportunity to harness the School’s collectiveexpertise and make a serious contribution to therepair efforts that were sure to get underway before

long. As Stern is widely recognized ashaving one of the finest finance and eco-nomics faculties in the world, theyknew Stern professors had plenty ofideas about what had gone wrongand what policies needed to be putin place.

They prompted a small groupof professors to initiate a proj-ect to create white papers onthe crisis and invited allinterested faculty to partic-ipate. Eighteen weekslater, a book, Restoring

Financial Stability: How toRepair a Failed System, was published

by John Wiley & Sons. The book features 18

Fixing Our BroS t e r n F a c u l t y W r i t e

22 Sternbusiness

Stephen C. Figlewski

Menachem Brenner

Eitan Zemel

Philipp Schnabl Edward I. Altman

Lawrence J. White

Stephen J. Brown

Ingo Walter

Lasse H. Pedersen

Dean Thomas F. Cooley

Lawrence J. White

Edward I. Altman

conduct. By mid-December, pre-publication copies ofexecutive summaries and essays were spiral-bound anddistributed to policymakers, congressional leaders, regu-lators around the world, and members of then President-Elect Obama’s transition team.

Finance professors Matthew Richardson, the director ofthe NYU Stern Salomon Center, and Viral V. Acharya tookthe lead in this effort, pulling all-nighters, nagging, cajol-ing, editing, and keeping the project on course.

For Stern faculty, the opportunity to engage onpressing global issues with colleagues from severaldepartments exemplified the intellectual culture of theStern School.

Sternbusiness 23

Authors not pictured: Viral V. Acharya, David K. Backus, Andrew Caplin, Gian Luca Clementi, Robert F. Engle,

Dwight Jaffee, Kose John, Alexander Ljungqvist, Anthony W. Lynch, Nouriel Roubini, Anthony Saunders, Marti G. Subrahmanyam,

Rangarajan K. Sundaram, and Paul A. Wachtel

Thomas Philippon

Marcin KacperczykJennifer N. Carpenter

Robert E. Wright

Matthew Richardson

Roy C. Smith

Stijn Van Niewerburgh

Stephen G. Ryan

Xavier Gabaix

white papers written by 33 Stern and NYU facultymembers from several of the School’s departments. Thediscussion – in day-long seminars, water-cooler com-mentary, and seemingly 24-hour e-mail – was intense,engaging, and, indeed, inspiring.

The point of the activity was not, however, only to fos-ter intellectual excitement within the School, as impor-tant as that is. It was to bring clear-eyed analysis of whathad gone wrong together with unbiased and independentrecommendations for how the world’s financial systemcould be righted both in the short- and medium-term.Each of the papers started by discussing the nature of theproblem, where things went wrong and where they stoodat the moment, what options were available to repair theimmediate damage and prevent a recurrence at the leastpossible cost to financial efficiency and growth, and aproposed course of action for public policy and business

ken Economy:t h e B o o k

24 Sternbusiness

But more than that, recommendations and sugges-tions from papers collected in the book, spun off into op-ed pieces, media coverage, and other materials, have hada material impact on the current discussion.

Four Key ElementsThis effort required

four things to ensureimpact: objectivity,credibility, immediacy,and dissemination.Objectivity meantmaintaining c learindependence fromfinancial institutions,policymakers, andadvisers who helpedproduce the financial disaster in the first place, and whowould soon try to influence the repair process in waysthat would inevitably favor their own interests.Credibility meant that the project had to be based on acombination of solid research and institutional knowl-edge that the Stern faculty is fortunate to have in abun-dance. Immediacy was driven by the need to impact thefinancial system repair process in its early and formativestages, before positions among regulators and politiciansbegan to harden. And dissemination meant that the keyfindings and their underlying rationale had to haveimmediate impact but also provide a robust and durabletemplate that would last through the drawn-out policydebates to come. All four objectives were achieved, andat breakneck speed.

The executive summaries were posted, day by day, onthe Stern website and also on Roubini Global Economics(RGE) Monitor, where they received literally thousandsof hits.

To ensure that these thought pieces would be avail-able in libraries worldwide, versions of the executivesummaries were published in a special issue of Financial

Markets, Institutions & Instruments. The crisis is the ultimate teachable moment, as Dean

Cooley called it, and Stern students have been able tobenefit immediately from the scholarly work that has

been in progress. A five-lecture MBA

course based on the book’scontents and taught by adozen of the facultyauthors began in earlyFebruary and was oversub-scribed as soon as it wasoffered. And in March, theSchool held a conferencearound the white papers,with alumni and pressinvited to hear, among oth-

ers, featured speakers Paul A. Volcker (Hon. ’83), chair-man of the Economic Recovery Advisory Board and for-mer chairman of the Federal Reserve; Myron Scholes,chairman of Platinum Grove Asset Management and win-ner of the 1997 Nobel Memorial Prize in economics; andCharles Plosser, CEO of the Federal Reserve Bank ofPhiladelphia (see page 25).

Early ReactionsEven before publication, the book’s analyses and advice

had begun to get traction among the nation’s thought lead-ers. The ideas filtered into the national debate, appearingin op-ed pieces, on financial news networks, and in legis-lators’ briefing books. On Inauguration Day, an ad in theFinancial Times directed readers to the Stern website thatcontains executive summaries of the white papers( h t t p : / / w h i t e p a p e r s . s t e r n . n y u . e d u ) . T h e“Stern on Finance” blog, maintained by ThomasPhilippon, assistant professor of finance, helped galvanizethe discussion. According to Volcker, “The Stern Schoolfaculty is making an important contribution to the need-ed debate about how to go about reforming our broken

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 paneldiscussion 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 someof the faculty who taught the MBA course on the financial crisis.

“”

The [economic] crisis is the ultimate teachable moment,

and Stern students have been able tobenefit immediately from the scholarlywork that has been in progress.

Sternbusiness 25

financial system.” The book is structured as 18 independent

policy papers that propose market-focusedsolutions to each problem within a commonframework. The papers are grouped into sevensections: Causes of the Financial Crisis;Financial Institutions; Governance, Incentives,and Fair-Value Accounting; Derivatives,Short-Selling, and Transparency; The Role ofthe Fed; The Bailout; and InternationalCoordination. Observed Henry Kaufman (BA’48, PhD ’58), president of Henry Kaufman &Co. and chairman emeritus of the Stern Boardof Overseers: “What makes this book especial-ly valuable are its detailed evaluations andanalyses covering many spectrums of the mar-ketplace.”

Potential UnlockedRestoring Financial Stability is Stern’s first

foray into producing an independent, pub-lished collection of faculty work, one thatemploys research-driven critical solutions thatare projected into the political and economicdialogue on a national level. Together with theseminars and conference, the project under-scores the multidimensional nature of Stern’sintellectual vigor. It is tangible evidence of the School’smission to place its students and faculty at the nexus ofbusiness and society. Said Dean Cooley: “We embed theissues into the classroom, create top-flight research cen-ters that produce state-of-the-art knowledge aboutimportant topics, and then become the venue in which theexpertise is translated for the public. We must be, andindeed we are, shaping the debate itself.”

A Tour de ForceLooking back, this is an important milestone at a crit-

ical point in history. “There are few, if any, major business

schools that could have pulled together such a broad andincisive analysis in such a short time,” said Vice DeanWalter. The book addresses the right issues, at the righttime, and in the right way. And it was all accomplishedwithout significant financial resources by an extraordi-nary talent pool convinced that the effort was important.More good academic work will, of course, be done, and,many others will enter the competition of ideas. Somealready have. But what has become known as the “NYUStern Report” has already become a benchmark againstwhich they will be judged. This is what thought leader-ship looks like. ■

Volcker, Scholes, Stern Faculty, and Industry ExpertsDebate – Before Alumni and the Media – How to Repairthe Financial System

In March, NYU Stern hosted a panel discussion for alumni and the mediathat 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 pub-lished in March by John Wiley & Sons. At the half-day conference, such distin-guished panelists as Paul Volcker (Hon. ’83), chairman of the EconomicRecovery Advisory Board and former chairman of the Federal Reserve; MyronScholes, chairman of Platinum Grove Asset Management and winner of the1997 Nobel Memorial Prize in Economics; Charles Plosser, CEO of the FederalReserve Bank of Philadelphia; Eric Dinallo, superintendent of the New York StateInsurance Department; Madelyn Antoncic (MPhil ’81, PhD ’83), managing direc-tor and senior advisor at Lehman Brothers; and John Gapper, associate editorand chief business commentator at the Financial Times, joined Stern financeprofessors Ingo Walter, Matthew Richardson, Viral V. Acharya, and ThomasPhilippon to expand upon the subject to a rapt audience.

General themes developed during the discussions, which were organizedaround the topics of how to restore financial stability and the future role of gov-ernment in the financial system. Panelists decried the emergence of hyper-com-plex financial institutions whose failure jeopardizes the health of the economy.Walter called them financial “Godzillas” – companies too big to fail and toocomplex to regulate.

A general consensus emerged regarding a need to restructure and regulatethe industry, but exactly how generated diverse proposals. Volcker suggested atwo-tiered financial system – in which regulated commercial banks would beseparate from capital markets – that would operate relatively regulation-free butjust self-destruct if they blew up, rather than endanger the commercial creditapparatus. Some panelists favored an “über-regulator,” while others preferred asystem of graduated regulatory bars pegged to the degree of systemic riskposed by a particular sector. More information about the conference, includingvideo clips, is available online at http://whitepapers.stern.nyu.edu/conference.

26 Sternbusiness

Erin Burnett: The bigquestion right now is,how bad is it out there?Jim McNerney: We’retrying to sort through

the credit crisis. The consumer is notspending. Corporations are beginning toreact by reining in spending and gettingcosts in line. I’d say that we’re in for a difficult time.

EB: From your perspective, when youlook at orders, is there a pause or is it ahalt that is still under way?JM: Our business is a very long-cyclebusiness where we’re delivering things thatpeople ordered four orfive years ago, in manycases. The immediatetest is whether peoplecan finance the planeswe are now delivering,and in most cases theycan. But I do anticipatesome cancellations anddeferrals. We have a capital corporation,Boeing Capital, that is a lender of lastresort, so, in some cases, we can step inthere. But as I look at the next four to fivequarters, we’re in pretty good shape.

EB: Has anything changed in terms ofhow you’re running your business, orhow much you’re investing in new devel-opment?JM: Not yet. And I don’t anticipate that itwill. The 787, the Dreamliner, is 30 percentmore efficient than the planes it willreplace. So if an airline can get financing,they will take this airplane. We have 900orders. It represents sort of a step-functionchange in productivity for these airlines.The only other major development is arefurbishing of the 747, both a freighter

and a passenger version. We’re going toprotect our ability to invest there by con-trolling costs in other places.

EB: When you look at the places in theworld that have been driving your busi-ness – the Middle East and Asia – doyou see weakness yet? Do you thinkwe’re decoupled from the rest of theworld or are more intricately linked thanwe ever thought before?JM: I certainly see the signs of economicweakness in places like Dubai and Chinaand continued stagnation in Japan, andIndia is struggling. I’ve just named placesthat order a heck of a lot of airplanes

from us. Has it gotten to the point wherethey’re not going to take delivery on theeight years worth of backlog that we havewith them? Not yet. We’re very fortunateto have a very big backlog with theseguys. I think there’s no doubt futureorders will slow down.

EB: Are you concerned that our govern-ment is getting too involved in allocatingcapital?JM: I think President-elect Obama has amore balanced view than people give himcredit for. This is a guy with a lot ofcapacity. I see him more like Bill Clintonin his early days, when everybody wasconcerned about a liberal agenda and hecame in with a pretty balanced view.

EB: As the largest exporter, you have tocare about free trade. During the cam-paign, President-elect Obama had beenvery specific that he would renegotiateNAFTA, and had been vocal in not sup-porting bilateral trade agreements. Butthen he picked Rahm Emanuel, whowrote NAFTA, to be his Chief of Staff. Soit could lead to some confusion overwhether he’s going to renegotiate. Whatdo you think?JM: I think it was a very good sign thathe picked Rahm for that job. He’s a mod-erate who was involved with free-tradedesign. I think history tells you that attimes like this, if you take protectionist

measures, it can be areal mess because youend up protecting theweakest parts of youreconomy. And there isinevitably a responsefrom your trading part-ners who say, “Hey, waita minute. If we don’t

have access to your markets, you don’thave access to ours.” Immodestly, we atBoeing view ourselves as innovators whocan compete on a global basis in anycountry, so we want open competitioneverywhere. We think that industriesshould be restructured that can’t competeglobally, just like we should be, too.

EB: Do you believe in a public worksproject right now?JM: I think there have been examplesthrough history where some amount ofpublic works has been a stimulus to theeconomy. The infrastructure in this coun-try needs some work. I hope they redothe air traffic control system becausethat’s my pet project, and it’s a messright now. These projects can work, as

Jim McNerney is chairman,president, and chief executiveofficer of aerospace giantBoeing, the world’s largestmanufacturer of commercialjetliners and military aircraft,with $66.4 billion in 2007 rev-enues. Prior to joining Boeingin 2005, McNerney was chair-man and CEO of 3M, a $20 bil-lion global technology compa-ny. Before that, he spent 19years in a variety of top-levelexecutive positions at GE,including CEO of GE AircraftEngines.

Jim McNerney was interviewedon November 12 by ErinBurnett, anchor of CNBC’s“Street Signs” and co-anchorof CNBC’s “Squawk on theStreet.” She also appears reg-ularly on NBC’s “Today” and“Nightly News with BrianWilliams.”

LeadingIndicators

Jim McNerneychairman, president, and chief executive officer

The Boeing Company

“Our business is a very long-cycle business where we’re delivering things that people

ordered four or five years ago, in many cases.The immediate test is whether people canfinance the planes we are now delivering,

and in most cases they can.”

Sternbusiness 27

pearls” set of acquisitions toregain some technical strength inwhat we view as technologies ofthe future, particularly in some ofthe more information-based, sen-sor-based technologies.

Q: It seems that Boeing is mov-ing more towards smaller, moreefficient planes with the 787Dreamliner. Do you think thatAirbus made a mistake in mov-ing forward with the A380 SuperJumbo? Or did they simply movefirst and Boeing didn’t think there

was enough demand for two players inthat market space?JM: I think Airbus always chafed at thefact that we had the largest airplane, the747, and had always figured they wereeventually going to leapfrog there, andthey did. That choice seemed to assume ahub-and-spoke world where air trafficcontrol would not be improved. You’dhave to lug a thousand people from onehub to another hub, get [them] off the air-plane, and get [them] on another airplane.It didn’t anticipate the security world wehave today, post-9/11. We had the advan-tage of being able to anticipate that point-to-point world, because we made thedecision a little later than they did. Weenvisioned an airplane that could go along way, provide more passenger com-fort, and carry passengers at lower alti-tudes effectively because it was made ofstronger composite material. We had aview that passengers could avoid securitylines and the hassle associated with con-necting flights. I think the marketplaceagrees with us and that our judgment hasbeen borne out with the 787. They zigged,we zagged, and this time it turned out wewere right. ■

long as they drive employment and thereis a real return.

EB: Are unions, as they’re structured inthis country, a positive factor or a nega-tive one that actually impedes growth?JM: You can find examples where unionshave played a negative role in a compa-ny’s or industry’s competitiveness, suchas automobiles, steel, or the railroadindustry in times past. There are alsoexamples where unions and companiesare producing very efficient, competitiveorganizations, such as the Teamsters atUPS. I think Washington should stay outof the way and allow the collective bar-gaining process to work. If people want toform a union, they should be able to forma union. There should be balance withoutgovernment interference. Now, we[Boeing] have had some difficulties [in2008]. A balanced view would say that theunion overreaches sometimes, and maybemanagement does some things that theywish they hadn’t done, too. It’s a difficultsituation for us, but we worked through it,and I think we’re in a good spot.

EB: If oil prices stay where they are now,does the whole “green” phenomenon

make sense without massive governmentsupport? JM: I think the short answer is yes. Ithink in our industry the economic incen-tives and the green incentives line upwell. I think in the auto industry it’s amore complicated argument. It’s not clearthat people will always buy the more effi-cient car. But you have to argue in thename of the common good that some reg-ulation makes some sense.

EB: When I graduated from school, WallStreet was the place to go. A lot of thosejobs aren’t going to come back any timesoon. Does that make it better for yourindustry, in terms of recruitment?JM: There are signs of more peoplegoing into engineering after many yearsof decline. But compared to historical lev-els or to the investment that China, India,and other countries are making, it’s stilllow. A different immigration policy wouldhelp. The current policy makes it difficultfor people to become American citizens –people who want to come here and pur-sue this study. This is really killing us inscience and technical engineering.

AUDIENCE QUESTIONSQ: I cannot think of a more concentratedindustry than yours. Do you see majorcompetition coming from Asia, maybe, orIndia? JM: Competition is coming. I think theChinese will be first, probably within 20years, because they have all the elementsto compete with Boeing and Airbus; theyjust have to put them together. They havea market, the technical ability, and theability to finance these products. Theissue for us is to be competitive when thattime comes, and that has a lot to do withlegacy labor costs.

Q: On the defense side, you no longerbuild the parts and products yourself, butrather take the role of lead systems inte-grator. What are some issues that youwould expect or that you may have seenover the past couple of years?JM: I think there are two issues associat-ed with it. One is the way the US govern-ment is contracting. It is focused on lessmargin for pure systems integration. Interms of being as grounded in some keynew technologies as we need to be, wemay have gone a little bit too far there, sowe have focused on sort of a “string-of-

CNBC’s Erin Burnett interviewed Jim McNerney at a CEO Series event held at NYU Stern in November.

National Science Foundation AwardsXavier Gabaix $400,000 to StudyRare Disasters and Exchange Rates

Associate Professor of Finance XavierGabaix – recently recognized by The Economistas one of the top eight best young economists inthe world – received a $402,342 grant from theNational Science Foundation to study rare disastersand exchange rates. The project, a joint effort with Emmanuel Farhi, assistant

professor of economics at Harvard University, proposes a new model ofexchange rates that combines the possibility of rare economic disasters and anasset view of the exchange rate. The proposed research offers a potential way tounderstand the impact of exchange rate pegging and also explains how todetect the impact of large disasters in asset prices, which can help avert futuredisasters.

“Although our project began before the current US market meltdown, thefinancial crisis shows that the possibility of rare disasters is actually very real,”noted Gabaix. “And while the crisis is unfortunate, it provides an opportunity forconducting useful research.”

Scholar for his leadership of the nextgeneration of marketing academics.

Robert Engle, professor offinance and Nobel Laureate, andNouriel Roubini, professor of eco-nomics and international business,spoke on several panels regarding theeconomy and financial institutions atthe World Economic Forum in Davos inJanuary. The conference addressed thefinancial crisis and ways to stabilizeand relaunch the global economy, aswell as a number of interrelated globalrisks, including climate change, food,and water security.

Professor of Marketing GeetaMenon was elected president of theAssociation for Consumer Research(ACR). In January, she began a three-year term on the ACR Board ofDirectors.

Associate Professor ofManagement and Organizations RobertSalomon was elected to the board (asrepresentative-at-large) of the Strategic

Environmental Defense Fund’s Fred Krupp Anchors Stern’sCiti Leadership and Ethics Program

Fred Krupp, head of the Environmental Defense Fund,was recently appointed the sixth Distinguished Citi Fellowin Leadership and Ethics at NYU Stern. Stern’s CitiLeadership and Ethics Program is made possible throughthe generous support of the Citi Foundation and managedby Stern’s Markets, Ethics, and Law Program. It representsa comprehensive effort to extend the School’s longstanding

commitment to the practice of professionally responsible business and supportsthe development of curricular and research innovations in the area of leadership

and ethics. This year the program is focusing on the use of market-basedapproaches to address environmental challenges. Krupp keynoted the annual con-ference in March with a discussion on the economics and politics of “cap andtrade” and how to leverage entrepreneurship to achieve environmental goals.

Krupp is widely recognized as the foremost champion of harnessing marketforces for environmental ends. He was the architect of the market-based acidrain reduction plan in the 1990 Clean Air Act – The Economist’s “greatest greensuccess story of the past decade,” and now the model for current congressionalproposals to address climate change. Krupp has broken new ground with strate-gic corporate partnerships, and helped launch the US Climate ActionPartnership, whose Fortune 500 members have called for strict limits on globalwarming pollution.

Management Society, the largest aca-demic society dedicated to theadvancement of strategic managementresearch.

Professor of Finance Viral V.Acharya was recently named to theresearch advisory board of the BritishPrivate Equity and Venture CapitalAssociation.

Assistant Professor of EconomicsLaura Veldkamp was made an asso-ciate editor for the Journal ofMonetary Economics in January.

Assistant Professor of Information,Operations, and Management SciencesAnindya Ghose was recentlyappointed an associate editor atInformation Systems Research andManagement Science; both are jour-nals of the IS Society.

Professor of Management andOrganizations Elizabeth Morrison iscurrently an associate editor at theAcademy of Management Journal andwas elected to a five-year term as an

s h o r t t a k e s

Professorof FinanceEdwardAltman wasinducted inOctober intothe inauguralclass of the Turnaround ManagementAssociation’s Turnaround,Restructuring and DistressedInvesting Industry Hall of Fame,which honors those whose outstand-ing individual contributions havemade a lasting positive impact on anindustry dedicated to stabilizingunderperforming companies, rebuild-ing corporate value, and retainingjobs.

Associate Professor of MarketingVishal Singh has been named aMarketing Science Institute Young

officer of the Organizational BehaviorDivision of the Academy ofManagement, the largest division of theAcademy. She will be the division’spresident from 2011-2012.

Professor ofMarketing TülinErdem has beenappointed thenext editor of theJournal ofMarketingResearch.

AssistantProfessor of Accounting DanielCohen joined the editorial board of theJournal of Accounting and Economicsand has been appointed as an associateeditor for 2009-2011.

Professor of Finance MartinGruber has been elected to the execu-tive committee of the board of directorsof the National Bureau of EconomicResearch.

Prospectus

28 Sternbusiness

Sternbusiness 29

Organizations Frances Millikenand Assistant Professor ofManagement and Organizations JoeMagee won the award for bestpaper at the Eastern Academy ofManagement in May 2008 for “TheLens and Language of Power:Sense-Making and Communicationin the Aftermath of HurricaneKatrina,” which found significant dif-ferences in how individuals con-strued Hurricane Katrina as a func-tion of the amount of formal authori-ty they had at the time.

Assistant Professor ofManagement and OrganizationsGonçalo Pacheco de Almeidawon the distinguished paper awardof the business policy and strategydivision at the 2008 Academy ofManagement Meetings for “Time-Consuming TechnologyDevelopment: How Imitation andSpillovers Affect CompetitiveDynamics.” The research comparestwo technology competition regimesand finds firm incentives for both.

Associate Professor ofInformation, Operations, andManagement Sciences ArunSundararajan and GalOestreicher-Singer (PhD ’08)received the best paper award at theINFORMS Conference onInformation Systems andTechnology, held in October 2008,for “The Visible Hand ofRecommendation Networks.” Thepaper observes that while social andeconomic networks of various kindshave historically affected purchasingchoices and demand patterns, thewidespread adoption of electroniccommerce over the last decade, cou-pled with the more recent explosionof online social networking and Web2.0 technologies, have made thesenetworks explicitly visible to con-sumers and influential for productdemand.

Professor of Finance MatthewRichardson and AssociateProfessor of Finance Alexander

Professor ofMarketingSusan Douglasreceived theGlobal MarketingAward from theAmericanMarketingAssociation’sMarketing Special Interest Group forher “lifelong dedication to global mar-keting” and “significant contributions toglobal marketing knowledge.” Havingstarted in the 1970s, she was one of theearliest researchers in internationalmarketing.

Clinical Associate Professor ofEconomics Robert Wright’s book,One Nation Under Debt: Hamilton,Jefferson, and the History of What WeOwe, published by McGraw-Hill in2008, was recently named one of thetop 25 outstanding academic titles ineconomics by Choice: Current Reviewsfor Academic Libraries, a source forreviews of academic books, electronicmedia, and Internet resources of inter-est to those in higher education.

Assistant Professor of Information,Operations, and Management SciencesSinan Aral recently won the bestoverall paper award at the InternationalConference on Information Systems forthe second time in three years for hisco-authored paper, “Mining Face-to-Face Interaction Networks UsingSociometric Badges: PredictingProductivity in an IT ConfigurationTask.” This is the most prestigiousaward at the most influential informa-tion systems conference in the world,where Aral also won the best disserta-tion award last year. The paper bridgestwo influential bodies of research inorder to contrast the productivity effectsof face-to-face networking with e-mailnetworking, and establishes a novel setof tools and techniques – based on thewearable sociometric badge – for dis-covering and recording precise face-to-face interaction data in real world worksettings.

Professor of Management and

r e s e a r c h r o u n d u p Store Price Judgments: The Role ofKnowledge and Shopping Experience,”was also published in the Journal ofRetailing. In addition, her paper,“Biases in Perceptions of Base Ratesfor Risk: The Effect of DenominatorSalience on the Use of the NominalRate and the Numerator to EstimateRisk,” was published in theInternational Journal of Research in

Marketing.Professor

of AccountingStephen Ryanpublished twopapers,“Accounting Inand For theSubprime

Crisis” and “Characteristics ofSecuritizations that Determine Issuers’Retention of the Risks of theSecuritized Assets,” in TheAccounting Review.

Assistant Professor ofManagement Aviad Pe’er publishedhis co-authored paper “Do PoliticsShape Buyout Volume andPerformance?” in the HarvardBusiness Review. The paper showshow the political leanings of a stateinfluence buyout fund activity, particu-larly that Republican (red) states aremore favorable than Democratic (blue)states for buyout firms.

Associate Professor of MarketingTom Meyvis’s paper with Leif Nelsonof the University of California-SanDiego and Stern doctoral student JeffGalak (PhD ’09), “MispredictingAdaptation and the Consequences ofUnwanted Disruptions: WhenAdvertisements Make TelevisionPrograms More Enjoyable,” was pub-lished in the Journal of ConsumerResearch.

Assistant Professor ofManagement and OrganizationsChristina Fang’s co-authored paper,“The Near-Term Liability ofExploitation: Exploration andExploitation in Multi-Stage Problems,”showing that exploratory behavior hasvalue quite apart from its role in revis-ing beliefs, is forthcoming inOrganization Science.

Ljungqvist won the 2007 BarclaysGlobal Investors Prize for their paper,“The Investment Behavior of BuyoutFund Managers,” which analyzes thedeterminants of buyout funds’ invest-ment decisions. Professor Ljungqvistalso won the 2008 FMA Best PaperAward in Financial Markets for his co-authored paper, “The Value ofResearch,” in which he estimates thevalue added by sell-side equity-research analysts and explores thelinks between analyst research, infor-mational efficiency, and asset prices.

Professor of Accounting KashiBalachandran won the Impact onManagement Accounting PracticeAward for his jointly authored paperentitled, “CEVITATM: The Valuationand Reporting of StrategicCapabilities,” which focuses on com-bining the tangible and intangibleassets in an organization to develop acapability index that signifies its eco-nomic value.

Assistant Professor ofInformation, Operations, andManagement Sciences Panagiotis G.Ipeirotis and Associate Professor ofInformation, Operations, andManagement Sciences FosterProvost received a best paper runner-up award at the top data-mining con-ference, ACM SIGKDD 2008, for“Improving Data Mining and DataQuality using Multiple, NoisyLabelers,” which examines the implica-tions of inexpensive micro-outsourcingfor improving data quality and data-mining results.

At the fall INFORMS meeting,Assistant Professor of Marketing SamHui was awarded second prize for the2008 George B. Dantzig DissertationAward, which is given for the best dis-sertation in operations research andthe management sciences that is inno-vative and relevant to practice.

Professor of Marketing PriyaRaghubir’s co-authored paper,“Customer Experience Management inRetailing: Understanding the BuyingProcess,” was published in theJournal of Retailing in a special issueon customer experience managementin retailing. Her article “Memory-Based

30 Sternbusiness

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t has become exceedinglyapparent of late that credit,rather than money, makes theworld go ’round – all the way

up the line, from micro- to macro-economics. With great interest, we setout to investigate the connectionbetween paying in cash and payingwith credit. We wanted to understandhow buying with credit – which typi-cally entails a time lapse between thepurchase and the need to pay for it –affects how people think about andspend money. We also wanted to see ifother factors influence purchase deci-sions similarly, such as using a giftcertificate rather than cash or a cred-it card, and whether treating a giftcertificate like cash and holding ontoit for a period of time makes any dif-ference.

Pick a Card, Any CardWith the proliferation of different

payment modes in recent years, con-sumers have a wide array of paymentoptions to choose from in making

their purchases. Typically, consumershave the option to purchase withcash, a check, a credit card, or a debitcard. However, other payment modessuch as bank drafts, money orders,traveler’s checks, gift certificates, giftcards, coupons at fairs, chips at gam-ing houses, and stored value cardssuch as those used in mass transit andtolls, etc., are quite common in themarketplace. Some types of gift cardsare almost identical to debit cards,such as the American Express or Visagift cards. Further, the advent ofInternet commerce has spurred thegrowth of new payment modes suchas PayPal.

Relatively few studies have inves-tigated differences in spendingbehavior as a function of the mode ofpayment. The few existing studiesdemonstrate that consumers tend tospend more when paying with a cred-it card than when paying by cash orcheck, after controlling for other fac-tors. A review of the previousresearch on the effect of payment

mode on spending behavior suggeststhat the focus has been primarily onthe difference between credit cardand cash payments. The phenome-non of higher spending when payingwith a credit card than with cash hasbeen attributed to the separation intime of the purchase decision fromthe actual payment – referred to aspayment coupling.

Payment form is another aspectof the mode of payment that refers tothe differences between two mone-tary instruments that are identical intemporal coupling and face valuebut different in terms of physicalappearance (e.g., $50 legal tenderand a $50 gift certificate that can beused anywhere). Relatively littleresearch has focused on spending asa function of payment form. Notingthat a credit card differs from cash incoupling as well as form, we set up aseries of experimental studies thatexamined consumer spending as afunction of payment mode bothwhen the mode differs in coupling

MONOPOLYMONEY

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

I

®

expectation of the pain of paying inthe future, people are likely tounderestimate the pain and thusspend more with a credit card thancash.

Paying the PiperIn addition to the difference in

payment coupling across paymentmodes, we argued that paymentmodes may also differ in terms ofform. Consider an individual whoreceives $50 either in the form ofcash or a gift card that can be

used almost universally.Although there is no dif-ference in coupling or theface value of the amountof money given (i.e.,$50), the two paymentmodes are different inphysical appearance and

thus differ in terms of paymentform. In the case of credit cards ver-sus cash, the two payment modesdiffer in terms of coupling as well asform, whereas in the case of gift cardversus cash, the two modes differonly in terms of form. We arguedthat the physical form of the pay-ment mode is likely to affect pay-ment transparency, or the vividnesswith which the outflow of money isfelt. Thus, extending the reasoningto different payment forms, the moretransparent the payment form, thehigher the pain of parting withmoney, the greater the aversion topaying, and the lower the likelihoodand level of spending.

We investigated our hypotheseswith four groups of students. Thefirst two studies examined whetherconsumers were willing to spendmore when the payment mode was acredit card versus cash. Holdingpayment coupling constant, thesecond two studies examinedspending decisions when an equiv-

32 Sternbusiness

and form (e.g., credit card versuscash) and when the mode differs onlyin form, holding payment couplingconstant (e.g., gift certificate andcash of equivalent value).

Ignorance is BlissThe conceptual underpinning of

our research was that paymentmodes differ in transparency – whichwe characterize as the vividness withwhich individuals can feel the out-flow of money – with cash being themost transparent payment mode. Weargued that the more trans-parent the payment outflow,the greater the aversion tospending, leading to lesstransparent payment modessuch as credit cards and giftcards (versus cash) beingmore easily spent or treatedas play or “Monopoly money.”Further, to the extent that the trans-parency of paying affects spendingbehavior, we tested whether alteringthe salience, or significance, of part-ing with money would lessen anybehavioral difference across paymentmodes.

Research on the cognitive psy-chology of financial behavior sug-gests that people organize theirfinances around mental accounts,which have been described as the setof cognitive operations used by indi-viduals and households to organize,evaluate, and keep track of financialactivities. Analogous to accountingand budgeting systems used by com-panies, individuals create separatesource-based expense and incomeledgers in their mind. For example,people group and label expenseaccounts separately, such as food andentertainment, and spending is driv-en by the available surplus or deficitin each account. Since people treatmoney differently depending on how

it is labeled, money in one mentalaccount is not a perfect substitute formoney in another account – hence it isnot perfectly fungible. In general,mental accounts serve to simplifyfinancial decision-making and aid inmaking tradeoffs among differenttypes of spending.

At the specific transaction level, ithas been shown that a mentalaccount is opened and the decision topurchase is based on an evaluation ofthe perceived benefits of consumptionand the costs of payment in this par-

ticular account. As discussed above,there is an immediate pain of payingthat can reduce or even prevent thepleasure of consumption. In balanc-ing the pleasure derived from a pur-chase and the pain of paying for it,making the cost salient underminesthe pleasure one can derive, whereasmaking the benefits salient may bluntthe pain of paying. In this case, cou-pling – the extent to which the con-sumption and payment are psycho-logically linked together due to theirproximity in time – tends to enhancethe pleasure of consumption andreduce the pain of paying.

It makes sense, then, that, as pre-vious research has shown, consumerstend to spend more when using acredit card than when using cash, asthe purchase is fully decoupled fromthe payment. By contrast, in the caseof cash purchases, there is a tightcoupling of the consumption and thepayment, accentuating the pain ofpaying. Further, in balancing theimmediate gratification against the

“Participants in one of our studies were made to feel the full extent of the future pain of paying,

which attenuated the tendency to overspend whenusing a credit card as compared to cash.”

may choose to use cashfor justifiable necessitiesbut credit or gift cardsfor frivolous luxuries.Another relates to disen-

tangling the transparency versusmatching effects of credit cardspending for utilitarian and hedonicgoods – the extent to which peoplemay consciously match more trans-parent payment forms to necessitiesor utilitarian consumption and lesstransparent payment forms to frivo-lous luxuries. Identifying the learnedcognitive structures, or schemas,associated with different paymentmodes is another fruitful area forresearch. In our context, people maylearn and develop schemas aboutdifferent payment modes and howthese may aid in balancing con-sumption pleasure and the pain ofpaying.

Future investigation of theseissues could examine differences inspending behavior with larger sumsof money and non-student popu-lations under more naturalisticconditions than the laboratoryenvironment allowed. Further,future research could investigatewhether the differences due to thetransparency of the money alsoaffect differences in the likelihoodof spending and amount of spendingfor new payment mechanisms suchas prepaid stored value cards, likethose offered by American Express,Visa, phone companies, and manyretailers. ■

P R I YA R A G H U B I R is professor ofmarketing and Mary C. JacobyFaculty Fellow at NYU Stern.J O Y D E E P S R I VA S TAVA is associateprofessor of marketing at the Robert H.Smith School of Business, University ofMaryland, College Park.

Sternbusiness 33

alent amount was giveneither in the form of a giftcertificate or cash, so thatthe payment mode differedonly in form. Exploringconditions under which paymentmodes led to differences in spendingdecisions, we were also able to exam-ine the extent to which the spendingdifferences across payment modeswere eliminated or reduced by alter-ing the significance of parting withmoney in the case of credit cards andgift certificates, respectively.

Our findings lent support to pre-vious theories that paying for goodsand services leads to an immediatepain of paying, which is balancedagainst the anticipated benefits ofthe goods and services. While mak-ing the benefits significant maysomewhat blunt the pain of paying,our results suggested that paymentmodes that are even less transparentdull the pain of paying, thus increas-ing the likelihood of spending. Theoutflow of money is very vivid, andthus painful, when individuals usecash. We found, in contrast, that anypayment mode that makes the out-flow of money less vivid, and thusless painful, reduces the psychologi-cal barrier to spend. Importantly, theresults also suggested that contextu-al variables that make the pain ofpaying salient serve to reduce thepropensity to spend more, even whenusing a less transparent paymentmode such as a credit card. Thus,participants in one of our studieswere made to feel the full extent ofthe future pain of paying, whichattenuated the tendency to over-spend when using a credit card ascompared to cash.

Substantively, this research con-tributes to our understanding ofindividuals’ propensity to spend as afunction of payment mode and thus

the increase in the variety of differentpayment modes in the marketplace.For example, American Express in2004 began focusing on increasingsales of American Express gift cards,the sales of which tripled from theprevious year. The IncentiveFederation Study of Merchandiseand Travel Incentive Users foundthat gift cards are commonly offeredas incentives for salespeople (78 per-cent), resellers (57 percent), con-sumers (77 percent), and employees(67 percent).

Park Place or Boardwalk?From a consumer welfare perspec-

tive, our results suggested that indi-viduals are prone to biases in spend-ing when they use non-legal tender.Treating non-legal tender as playmoney leads to overspending thatauthorities can warn consumersabout. It has been reported that peo-ple recall their cash payments betterthan their credit card expenses, indi-cating that the full extent of the painof paying in the future is not felt atthe time of purchase. To the extentpeople can be made to anticipate thefuture pain of paying at the point ofpurchase, the difference in spendingbehavior as a function of paymentmode is likely to diminish. In the caseof gift cards relative to cash, frivolousspending is more likely to occur witha gift card than with cash. Althoughequivalent in face value, the intrinsicdifference in physical form andappearance serves to anaesthetize thepain of paying.

There are several promising areasfor future research around this sub-ject. One is the extent to which people

“We found that any payment mode that makes the outflow of money less vivid, and thus less painful,

reduces the psychological barrier to spend.”

logging their way throughthe latest financial crisis,Americans from Wall Streetto Main Street have sud-

denly become interested in history.Along with other financial histori-ans, I am often asked, “Is the 2007to 2009 crisis the worst the US hasexperienced since the 1930s?” Yes,it is. “Will the crisis lead to a secondGreat Depression, in which a quar-ter of American workers might losetheir jobs?” I very much doubt it.“Could stocks again lose almost 90percent of their value at the peak ofthe market, as the Dow industrialsdid from September 1929 to July1932?” I don’t think so.

ting down the New York StockExchange for four months and issu-ing emergency currency to US banks– averted a major financial crisisand, of course, a depression.

There was a serious crisis withmany bank and business failures in1907. But bold actions by the greatprivate banker J.P. Morgan averteddepression. Morgan forced otherbanks to cooperate by poolingreserves to save solvent but illiquidbanks encountering huge depositwithdrawals. He also bailed out aninvestment bank and broker byarranging for the sale of a compa-ny’s securities, which the bank couldnot liquidate in panic conditions, to

My answers are based less oncomparing the current crisis to thatof 1929 to 1933 than on comparingit with other serious financial crisesthat did not lead to economicdepressions. In virtually every case,bold leadership – sadly missing dur-ing the early 1930s – preventedactual or potential financial melt-downs from causing depressions.

The US might have had a seriouscrisis in 1914 after the outbreak ofthe Great War in Europe led pan-icked European investors to want toliquidate their large holdings ofAmerican securities. But boldactions led by Treasury SecretaryWilliam McAdoo – including shut-

By Richard Sylla

34 Sternbusiness

S

Another GreatDepression?A 911 call to Alexander Hamilton

might be the answer

Sternbusiness 35

another company in a merger. Ashort but sharp recession, not adepression, occurred. After thepanic, Congress, realizing thatMorgan would not be around forev-er (he was 70 in 1907), reinstituteda central bank by establishing theFederal Reserve. Morgan passedaway in 1913. The Fed opened in1914, after McAdoo saved the day.

In 1825, the Bank of the UnitedStates, the early central bank led byNicholas Biddle, prevented a finan-cial crisis that devastated Britain,America’s major trading partner,from spreading across the Atlantic.It did so by lending liquid US gov-ernment securities on its balancesheet to other banks under pressureso that they could borrow on thealready impeccable collateral of USgovernment debt. The Bank alsoincreased its own lending to add liq-uidity to the money markets and thebanking system. Crisis averted.

My favorite, if little-known,example of bold action preventing amajor financial crisis from causing adepression, or even a recession,occurred at the very beginning ofUS history in 1791 and 1792.People, including historians, tend toforget about financial crises that areso boldly and well-handled thatthey end quickly and have minimaleconomic fallout. But we ought tostudy and learn from triumphs aswell as disasters.

Making It NewFirst, some background. Financial

innovation was in the air in the early1790s. Adoption of the Constitutionhad given rise to a new and, theo-

million of such domestic debt secu-rities were issued during Hamilton’stenure at Treasury. Hamilton bor-rowed another $12 million fromDutch bankers to pay overdueAmerican war debts to France.

Next, Hamilton in 1791 estab-lished the Bank of the United Statesas America’s central bank. For itstime, the Bank was a gigantic cor-poration, with $10 million in capi-tal, a fifth provided by the govern-ment and the rest by privateinvestors, who controlled it in orderto prevent Congress from having amoney-creating machine. Thisaction prompted state governmentsto charter more banking corpora-tions by providing them with both amodel and a challenge: Modernize,or the federal government will do itfor you.

Third, Hamilton also in 1791defined the US dollar as a newworld currency in terms of specificweights of gold and silver, makingthe dollar like the currencies of theleading European nations. Thespecie (coined) dollar became themonetary base of the country, uponwhich banks issued credit money –bank notes and deposits convertibleinto the base.

With these Hamiltonian financialinnovations in place, states and pri-vate citizens filled out the system.The states issued charters for morebanks and other corporations.Citizens applied for charters, estab-lished corporations, and formedmarkets, even stock exchanges, totrade all the new government debtand corporate stock issues thatappeared in the early 1790s.

retically, stronger federal govern-ment in 1789. George Washington,the first president, chose AlexanderHamilton, his principal aide de campduring the War of Independence, tobe the first Secretary of the Treasury.

Hamilton knew his financial his-tory. For a decade before he tookoffice in 1789 his writings were pep-pered with comments about pastItalian, Dutch, British, and Frenchfinancial innovations. In 1781, whilean officer in the Continental Army ata time when US finances were in ashambles, Hamilton wrote RobertMorris, Congress’s newly appointedfinance minister, to say, “Tis byintroducing order into our finances –by restoring public credit – not bygaining battles, that we are to finallygain our object,” which was “theestablishment of American inde-pendence!”

Building on these insights,Hamilton, with the support ofCongress, embarked on modernizingUS financial arrangements, key tomaking the new republic before longinto a major economic and politicalpower. First, in 1790 he establisheda revenue system and used revenuesit generated, as well as new loans, toconvert the unpaid debts, nationaland state, of the war into modernTreasury debt securities. Some $64

“Hamilton’s bold actions in afinancial crisis had saved the

day, and that is one reasonwhy Americans on average

are 50 times richer than theywere back then.”

For Americans, Hamilton hadcreated an exciting new world ofample private and public credit aswell as opportunities for investmentand speculation. As would happenon many subsequent occasions, itwent to their heads. The main issueof government bonds rose from 70to 90 (percent of par) in December1790, when Hamilton unveiled hisplan for a central bank, because thebonds could be used to purchasestock in the Bank if the plan wereenacted. It was.

Oops!When the initial public offering

of Bank shares took place in mid-1791, the bonds rose from 90 to110. At the same time, the rights orscripts entitling the owner to buy afull $400 bank share with install-ment payments over the next twoyears rose from an offering price of$25 in July to around $300 (imply-ing a market value of $675 for a fullbank share having a par value of$400) over the next six weeks. SomeAmericans were getting rich … onpaper. It was heady stuff, too heady.The market for scripts crashed inmid-August 1791, with $300scripts plunging to between 110 and160. The crash also depressed gov-ernment bonds by more than 10percent in a matter of days.

Hamilton was appalled. Hewrote to his friend, Senator RufusKing, to say that “a bubble con-nected with my operations is of allthe enemies I have to fear … themost formidable.” Then he acted,boldly. Calling a meeting of theCommissioners of the SinkingFund, a government authorityHamilton had created for just sucha moment, he asked his fellow fourcommissioners to approve up to

But it was too late for gradualismat the biggest bank, the Bank of theUnited States. Having made exces-sive loans and issued excessive banknotes, it was experiencing a steadyloss of specie reserves, which fellfrom $706,000 at the end ofDecember to $244,000 in March.The new central bank’s privatecreditors were expressing their dis-trust of its stability by asking it toconvert its paper promises to specie.To protect itself from the drain, thebank contracted its credit abruptly,not gradually.

The abrupt credit contractionundercut the speculative cabal bycausing government bond prices tofall, not rise. On March 8, WilliamDuer defaulted on his obligations torepay extensive loans from his cred-itors. That caused all hell to breakloose in the markets. Governmentdebt fell from 126 on March 5 to116 on the day Duer defaulted, andthen to 95 on March 20, as securi-ties holders rushed for the exits. Thenational debt lost 25 percent of itsvalue in two weeks. Today thatwould be nearly $3 trillion.

Bold StrokesOnce more Hamilton swung into

action. On March 19, he asked theBank of New York to accept govern-ment bonds as collateral for loans,so that panicked bondholders wouldnot dump them on the market. Butit appears that the bank, looking toits own interests, demurred becauseof the risk of taking on collateralthat was sinking in value. Hamiltonalso told customs collectors theycould receive post-notes of the Bankof the United States with a maxi-mum maturity of 30 days “uponequal terms with cash” in paymentof duties due. And, using the

$400,000 of purchases of govern-ment debt to inject liquidity into thesinking markets of New York andPhiladelphia. To finance the pur-chases, Hamilton borrowed fromstate banks in those cities, as thecentral bank had not yet opened.Later, he repaid the loans by draw-ing on Dutch loans to the US.

The medicine worked. In lessthan a month, the markets stabi-lized, and soon government bondsrose in price to pre-crash levels. Thecalm, however, proved temporary. InJanuary 1792, government bondsrose from 110 to almost 130. Therewere two reasons for the dramaticrise. First, a cabal of New York spec-ulators led by one William Duerdecided to try to corner the market’ssupply of government bonds beforethey were needed to pay the nextinstallment, and the cabal borrowedfrom any and all sources as they exe-cuted their plan. Second, there was ahuge new source of credit available:the Bank of the United States, whichopened in Philadelphia in December1791. Immediately and rather reck-lessly, the Bank expanded lendingand bank note issuance. The newmoney was fueling a new bubble.

Le Plus Ça ChangeAgain Hamilton was appalled.

“These extravagant sallies of specu-lation,” he wrote in late January, “doinjury to the government and to thewhole system of public credit, by dis-gusting all sober citizens and givinga wild air to everything.” Threeweeks later he wrote, “Every existingbank ought within prudent limits toabridge its operations. The super-structure of credit is now too vast forthe foundation. It must be graduallybrought within more reasonabledimensions or it will tumble.”

36 Sternbusiness

Sternbusiness 37

authority remaining unused in 1791to purchase government debt, heordered open-market purchases inPhiladelphia.

The next day he reconvened theSinking Fund Commissioners toauthorize still more open marketpurchases. Two of them, VirginiansThomas Jefferson and EdmundRandolph, Hamilton’s political ene-mies, resisted, and it took some timebefore John Jay, another member,could be summoned to joinHamilton and John Adams inbreaking the deadlock.Meantime, Randolphchanged his mind, andfurther open-marketpurchases commenced,continuing until the cri-sis ended in mid-April.

Meanwhile, Hamiltonmade more palatable tothe Bank of New Yorkhis plan to have pan-icked bond dealers col-lateralize the bonds forloans instead of dump-ing them on the market. Now he setthe prices at which the bonds wereto be accepted as collateral for loansand promised to take back the col-lateral at those prices should thebank get stuck with illiquid collater-al. He told the bank to charge apenalty rate, one percent above thecustomary rate, to provide the bor-rowers on bonds with an incentiveto repay their loans as soon as pos-sible when the markets stabilized.

Thus did Alexander Hamilton, inthe midst of Wall Street’s first crash,essentially formulate EnglishmanWalter Bagehot’s rules for correctcentral bank behavior in a crisis:When no one else wants to lend, thecentral bank should lend freely ongood collateral at a penalty rate.

And he coupled it with the offer of arepo by agreeing to relieve the bankof any collateral it couldn’t unload.Hamilton was far ahead of his time:It was eight decades later thatBagehot came up with the rules thatbear his name.

Lucky for UsThe bond dealers of New York

accepted the brilliant plan, collater-alizing at Hamilton’s prices and set-tling their debts by writing checkson the resulting bank balances

instead of by dumping securities onthe panicked markets. During thecrisis, Hamilton urged the banks tokeep lending, especially to cus-tomers who needed loans to paytaxes, and he promised the banks hewould let them keep the govern-ment’s money on deposit for as longas needed.

These bold actions ended thepanic of 1792 in just a few weeks.Some speculators, including Duer,were ruined, as were some who hadlent to them on promises of highreturns. Duer went to debtors’prison, where he was probably saferthan he would have been on thestreets of New York. The marketsstabilized, and government bondsrose back above par. No economic

damage resulted. The US economycontinued the expansion that beganin 1790 for several years.

That appeared to disappointJefferson, who redoubled his effortsto undermine Hamilton. He wantedto stop Hamilton from turningAmericans into a nation of stock-jobbers, speculators, factories, cor-porations, and transportation sys-tems, all fueled by credit frombanks and capital markets. Better,Jefferson thought, that Americansstick to farming. Hamilton won this

battle of titans. But hemight have lost had hisnew financial system col-lapsed upon moving fromthe drawing board toreality. Hamilton’s boldactions in a financial crisishad saved the day, andthat is one reason whyAmericans on average are50 times richer than theywere back then.

Back to the future. Thereason I do not foresee

another Great Depression imminentis that the Fed and the Treasuryhave been combating the currentcrisis with just the sort of bold lead-ership and innovative approaches tocrisis management that Hamiltonemployed in 1792. If the Fed andthe Treasury continue in this mode,the crisis will soon be ended, andwith some help from the Presidentand Congress in the form ofincreased public spending to replacereduced private spending, the reces-sion will end well before it becomesa depression. ■

R I C H A R D S Y L L A is Henry KaufmanProfessor of the History of FinancialInstitutions and Markets and professor ofeconomics at NYU Stern.

“The reason I do not foresee another Great Depression imminent is that the Fed and theTreasury have been combating the current crisis

with just the sort of bold leadership and innovative approaches to crisis management

that Hamilton employed in 1792. If the Fed and the Treasury continue in this mode,

the crisis will soon be ended. …”

38 Sternbusiness

MTV awards don’t usually show up on the résumés ofmost graduating business students, but NYU Stern seniorand bass guitarist Michael Antonucci (BS ’09) is defyingthe odds with his band, The Bride Wore Black, whichrecently took home mtvU’s Best Music on Campus“Woodie” award.

The Bride Wore Black beat out thousands of collegemusicians to win the award, which is given annually tothe top unsigned college band in the nation – a band thatis expected to break through in the coming year. “Wewere just excited to be nominated,” Antonucci admitted.“None of us were expecting to win, and we owe a lot ofthanks to all of the fans who voted for us.”

The band, formed in 2006, also includes NYU Collegeof Arts and Science senior Sean Walsh and two studentsfrom Five Towns College. After performing at smallerManhattan venues, the band gradually developed afan base through social networks such as MySpaceand by touring in the tristate area.

Antonucci, who graduates this May with a dou-ble major in finance and accounting, credits hisStern education with giving him an advantage inthe music business. “I wasn’t sure exactly what Iwanted to do when I entered college, but alwaysbelieved business would be a part of it,”Antonucci explained. “We are self-managedlike many unsigned bands on the scenetoday, and the business concepts I’velearned at Stern have really helped. My

courses in accounting and marketing have come into playwhen keeping the books and with all of the viral promo-tions we’re doing.”

Furthermore, Antonucci developed an interest in enter-tainment law, which sprouted after taking ProfessorRichard Hendler’s business law courses at Stern. “I wasreally turned on to this field because it combines my busi-ness interests with my passion for music,” said Antonucci.“I can definitely see myself going to law school down theroad.”

As the winner of the mtvU award, the band received asponsored national college tour and a $5,000 cash prize,which they intend to put toward recording a new album.While the band’s future is uncertain, for now, Antonucci

plans to continue touring and making music.“The award was a great step for us toward

gaining success in this business.We’re going to give it ourbest and see whereit takes us.”

Peer to Peer Student Life in Washington Square and Beyond

School of RockBy Joey Schmit

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

Sternbusiness 39

Marketing Professor and DepartmentChair Russell Winer posed an interestingcase to his Executive MBA class: Giventhe difficulty of recruiting Catholic prieststoday, devise a marketing strategy usingnew media to attract and recruit 18- to22-year-old males to the profession. “This is a unique casestudy and a difficult marketing problem – one that wedon’t typically study and something I knew my studentswould love to tackle,” he explained recently.

Students were assigned to analyze the originalArchdiocese of New York case study from the 1970s aswell as the Archdiocese’s current marketing campaign. Theclass heard from the Archdiocese’s Father Luke Sweeneyabout the parish’s marketing efforts and recruiting chal-lenges. “It was incredibly valuable to have Father Sweeneyin the discussion,” said Sam Barclay (MBA ’10), and amember of the class. “It is one thing to discuss a businessproblem in the abstract; it’s a completely different thing tohave the person who is faced with the challenge right therein the class debating the approaches to the problem.”

In addition to reading the case study and talking toFather Sweeney, students evaluated the organization’s web-site and assembled their own focus groups, including sev-eral young men currently attending the Naval Academy, toget a sense of what drew those applicants to make a simi-lar type of long-term commitment and if there were differ-ences in the decision-making process. Barbara Granata(MBA ’10), another student in the class and a marketingmanager for an investment firm, explained her group’s rec-ommendations: “We learned that the decision to become apriest usually starts early in a man’s life and is positivelyinfluenced by a religious role model. Catholic mentors areincreasingly scarce, however, so we recommended theysend more young priests out to visit Sunday school classesand interact personally with young people in the elemen-tary and middle school age demographic who may not befollowing the traditional Catholic school education path.We also recommended they increase their Internet trafficby adding search terms to browsers that would drive morepeople to their existing website, and make their social net-

working sites moreinteractive whilelinking to as manyreligious/priest/catholic communi-ty user groups aspossible.”

Barclay andGranata agreethat studyingmarketing chal-lenges like theArchdiocese’s arecritical to tie aca-demic learning toreal-world situa-tions. Barclaynoted, “A caselike this is greatstimulus for dis-cussion anddebate, and pro-vides the class anopportunity tohelp solve a real-world business challenge.” Granata added, “One of mybiggest take-aways from the class is how important it is todo market research early on to understand your targetmarket and define your value proposition. I was able totake back many of the tools I learned in class and imple-ment them immediately in my role at the investment man-agement firm. Our senior portfolio managers have nowstarted saying for the first time, ‘What’s our value propo-sition?’ when we discuss marketing approaches to differ-ent client segments. It is hugely gratifying.”

Top photo: Students (on left and right) in Professor Russell Winer’s (center left) marketing class heard from Father LukeSweeney (center right) about the Archdiocese’s marketing campaign to attract new priests.

Students examined the Archdiocese’s marketing campaignfrom the 1970s that included ads like the above, which wasrated the most effective ad of the campaign.

Marketing DogmaBy Rika Nazem

40 Sternbusiness

Alumni News & Events

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ALUMNI AFFAIRS

2008 ALUMNI BALL1. Alumni and guests enjoyed a festive holiday evening in one ofNew York City’s most esteemed landmarks, the Rose Center forEarth and Space at the American Museum of Natural History.

2. From left to right: Molly Meek (MBA ’04), Chair, Alumni BallHost Committee; Thomas F. Cooley, Dean; William R. Berkley (BS’66), Chairman, Board of Overseers; and Sally Blount, Vice Deanand Dean of the Undergraduate College, at the Alumni Ball.

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

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, AlumniCouncil Regional Leadership Committee, traveled from Florida toattend the annual tradition with friends Sandra Baker Zarraga (BS’00) and Michael Zarraga.

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

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

Sternbusiness 41

You Asked… We Listened…

Based on feedback from the alumni community, SWAP, the onlinealumni community, is being replaced by an entirely new, robust platform.The School has dedicated resources, including the Technology TaskForce of the Alumni Council, to develop a new online networking tool.

The revitalized online community will feature new ways to link to

In the wake of the economic turbulence, Stern alum-ni discovered the advantages of being involved in andinvesting in the Stern community.

In the fall semester alone, the number of Stern alum-ni in the LinkedIn network reached nearly 6,000,almost 9,500 alumni updated their contact information,and Stern’s faculty, at the forefront of the discussion onthe economy, were quoted in the press providing expertcommentary in more than 2,700 stories.

The Career Center for Working Professionals(CCWP) increased their offering of lifelong careerresources to support alumni, including individual careercounseling with self-assessments, résumé reviews, andmock interviews. More than 200 alumni came back tocampus to attend events and professional developmentworkshops, and more than 950 job postings were madeavailable to the community.

Corporations remained some of the School’s greatestpartners, and the alumni network was found to be par-ticularly relevant when leveraged within analumnus/a’s own company. Many of Stern’s top corpo-rate partners have hundreds of alumni within theirranks who came together to promote and advance thestrength of their networks, including AmericanExpress, Deutsche Bank, Ernst & Young, and IBM.

Stern alumni, regardless of their distance fromWashington Square, found meaningful ways to recon-nect and strengthen the network. To learn more abouthow you can re-engage with the community, takeadvantage of the CCWP, or find a regional group, visitwww.stern.nyu.edu/alumni. To access and/or submit jobopportunities through the online Stern recruitment sys-tem, visit www.stern.nyu.edu/ocd/recruitingsystem.

In This Weak Economy, Alumni Connections are Stronger Than Ever

other online social networking sites such as Facebook, LinkedIn, andMySpace; the option to subscribe to RSS feeds; a search tool to find yourfriends and classmates; a comprehensive calendar of events and RSVP tool;a way to manage your profile, including the ability to update your contactinformation; and exclusive career resources.

Exciting updates will be provided in the coming months.

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.

Mark Your Calendars for NYU Alumni Day 2009Join fellow alumni at the next NYU Alumni Day on October 3, 2009.

For the seventh year in a row, alumni are invited to reunite with fel-low classmates during an exciting day of programs showcasingsome of NYU’s most dynamic and innovative faculty and alumni,school-specific dean’s luncheons, and evening festivities.

Attention classes of ’99 and ’04! NYU Stern will host bothundergraduate and MBA five- and 10-year reunion receptions in con-junction with Alumni Day. Mark your calendars and stay tuned –additional information will be released in the coming months.

The Gift of Giving

Investing in education is oneof the soundest financial com-mitments one can make, espe-cially in these uncertain econom-ic times. With the turn in theeconomy proving to be a hard-ship for many families, the costof college is a burden on manypeople’s minds. As a result,nearly 50 percent of undergrad-uate Stern students applied foraid this year, and scholarships,especially, are now needed morethan ever. Scholarships play a critical role in enablingthe School to attract and retain the highest-quality stu-dents regardless of their economic situation.

For sophomore Daniel Lynch, III (BS ’11), receivingthe Kennish Scholarship, generously funded by alumnusShelley Greenhaus (MBA ’78), Principal, WhippoorwillAssociates, Inc., offered him the opportunity of a life-time – a chance at an education that might have other-wise been unattainable. “I wanted to attend Stern sothat I could collaborate with the future leaders oftomorrow,” Lynch said.

Thanks to the Kennish Scholarship, Lynch has beenable to fully immerse himself in Stern’s internationalcurriculum, participating in the World Studies Track,an integrated program featuring a combination ofcoursework and study abroad experiences in key globalmarketplaces of the 21st century. He has spent this aca-demic year engaged in international study.

“Investing in scholarships has been a rich and rewardingexperience,” Greenhaus, a loyal supporter of the School,explained. “Helping the younger generation obtain aglobal business education ensures the future success ofour society and leaves a lasting legacy for the School.”

“I hope to one day achieve the success Mr. Greenhaushas so that I can continue this tradition,” Lynch sharedin expressing his gratitude. “I wish there were some waythat I could adequately thank him for keeping myhopes alive and the fire of my intellect ablaze.”

If you would like to learn more about making a dif-ference in the life of a student, visit the Office ofAlumni Relations & Development website atwww.stern.nyu.edu/giving or call (212) 998-4161.

Update Your E-mail AddressIn an effort to be more environmentally-friendly and

fiscally responsible, many of the School’s communica-tions are now sent via e-mail. Don’t miss out on impor-tant information from Stern. Update your contact infor-mation by calling (212) 998-4040, visiting the websiteat www.stern.nyu.edu/alumni, or sending an e-mail toalumni@stern.nyu.edu.

Virtual SternDon’t miss out on the dynamic and innovative content-driven

programming delivered by our faculty and their peers – represent-ing some of the nation’s most pre-eminent thought leaders.

If you are not able to attend events on campus, many are nowavailable as webcasts, including the recent conference, “RestoringFinancial Stability: How to Repair a Failed System,” and our signa-ture Market Pulse Series, panel discussions with our world-renowned faculty, career development workshops, and interviewswith the world’s top CEOs. Webcasts can be found online atwww.stern.nyu.edu under “News and Awards.”

In addition to programming offered on Stern’s campus,there is a strong network of regional groups and programming.For a comprehensive listing of upcoming events, please visitwww.stern.nyu.edu/alumni/events.

The Undergraduate Class of 2003 enjoyed cocktails and conversation at their five-year reunion reception.

Alumnus Shelley Greenhaus generous-ly funded the Kennish Scholarship,making a Stern education possible forsophomore Daniel Lynch, III.

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 globalnetworking 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.

june 11-13, 2009

1940sGerald Fisher (BS ’40), of New York, NY,recently served as a mentor in the BusinessPlan Competition at the Berkley Center forEntrepreneurial Studies at NYU Stern. Fisher,now retired, was President and CEO of theArch Bilt Container Corp and the EnergyRecycling Corp.

Nicholas L. Heiny (BS ’41), of FortWayne, IN, was recently honored by the AllenCounty Council on Aging for his dedicationto seniors of Allen County. He was also hon-ored by the Alumni Association of the SouthSide High School, Fort Wayne, IN, where hereceived the Distinguished Alumni Award andwas recognized in the school’s Hall of Fame.

Adrian S. Price (BS ’49), of BoyntonBeach, FL, published his book, Gentlemanfrom Boynton B-Y-T-E-S Back, which com-prises a series of print columns and humor-ous commentaries.

1950sGerard A. Bongiovanni (BS ’50), ofAugusta, GA, a Naval Veteran of World War II,was selected by the Richmond CountyHistorical Society to share his WWII experi-ence via DVD, a copy of which will be sent tothe Library of Congress. Bongiovanni, nowretired, was Vice President of Surgicot, aSquibb Company.

Charles B. Rangel (BS ’57), of New York,NY, was listed as one of Accounting Today’sTop 100 Most Influential People of 2008.Rangel is a member of the US House ofRepresentatives from the 15th CongressionalDistrict of New York.

A. George Cero (BS ’59), of New York,NY, has been elected President of theInternational Precious Metals Institute and re-elected Chairman of the Commodity FloorBrokers and Traders Association. Cero is cur-rently Senior Vice President at RBC WealthManagement.

1960sDavid B. Cornstein (MS ’63), of NewYork, NY, has been appointed by New YorkGovernor David Paterson as a member of theBoard of Directors of the New York City Off-Track Betting Corporation and has also beendesignated as the Chair of the Board, a posi-tion he previously held in 1994. Cornstein iscurrently President of Pinnacle Advisors Ltd.,a consulting and advisory firm, and serves as

Chairman Emeritus of Finlay Enterprises, anationwide leased fine jewelry company.

Howard B. Katz (BS ’63), of SpringValley, NY, has been named an independentmember of the Board of Directors of PatientAccess Solutions, Inc., a provider of health-care/financial processing solutions. Katz isthe CEO and a member of the Board ofDirectors of MDwerks, Inc. He is also theCEO and Director at MDwerks, Inc.’s whollyowned subsidiary, MDwerks GlobalHoldings, Inc.

J. Albert Smith Jr. (MBA ’68), ofIndianapolis, IN, has been appointedChairman of the St. Vincent IndianapolisHospital Board of Directors. Smith isPresident of JPMorgan Chase in CentralIndiana.

Philip M. Skidmore (MBA ’69), ofRiverside, CT, has joined the Board of theOPEB Trust Fund of Greenwich, CT, whichprovides medical coverage for retired Townof Greenwich employees. Skidmore isChairman and Chief Economist at BelrayAsset Management.

1970sFred S. Zeidman (MBA ’70), ofHouston, TX, has been appointed to theBoard of Directors of SulphCo, Inc., a tech-nology company with a patented ultrasoundprocess to desulfurize crude oil. Zeidmancurrently serves as interim President forNova Biosource Fuels, Inc., and is alsoSenior Director for Governmental Affairs atGreenberg, Traurig’s Washington, DC, lawoffice.

Andrew J. Barile (MBA ’72), of RanchoSanta Fe, CA, has been elected to severalboards, including the Board of Directors ofPark Insurance Company. He recently start-ed Harbor Global Capitol Advisors, LLC.

Jim Apostolides (MBA ’74), of GardenCity, NY, has joined Needham & Company,LLC, a privately held, full-service invest-ment bank, as Managing Director in theMergers & Acquisitions group. Mostrecently, Apostolides was ManagingDirector at Citigroup.

Faith Griffin (MBA ’74), of Sarasota, FL,has been appointed to the Board ofDirectors of Coda Octopus Group, Inc., anunderwater port security and marine surveytechnology development company; she will

also chair its audit committee. Griffin is cur-rently a Director of Enherent Corp, a NewYork-based public company in the informa-tion technology service and solutions field.

Joseph Haskins, Jr. (MBA ’75), ofBaltimore, MD, was elected to the Board ofDirectors of Baltimore Gas and ElectricCompany (BGE) as an independent director.He is Chairman, President, and CEO of TheHarbor Bank of Maryland, and is also one ofthe bank’s co-founders.

William J. Pesce (MBA ’75), of BaskingRidge, NJ, has been elected Vice Chairmanof the Board of Directors of William PatersonUniversity, his undergraduate alma mater.Pesce, who is a member of Stern’s Board ofOverseers, is President and CEO of JohnWiley & Sons.

David L. Shedlarz (MBA ’75), of NewYork, NY, has been appointed to the Board ofDirectors of the Hershey Company. Shedlarzis a member of the TIAA Board of Trustees,as well as the Board of Directors of PitneyBowes, Inc.

Yvonne Davies Tropp (MBA ’75), ofMamaroneck, NY, was honored by theMental Health Association (MHA) ofWestchester for her dedication to her com-munity, to MHA, and to MHA’s CourtAppointed Special Advocates program.

Richard B. Berger (BS ’76), of Clifton,VA, has been promoted to Vice President ofThe Segal Company, a leading independentfirm of benefit, compensation, and humanresources consultants. Berger joined TheSegal Company in 1997 as a benefits con-sultant.

Richard A. Lorraine (BS ’76), ofJonesborough, TN, has been elected to theBoard of Directors of PolyOne Corporation,a global provider of specialized polymermaterials, services, and solutions. Lorrainerecently retired as Senior Vice President andCFO of Eastman Chemical Company.

William C. Denninger (MBA ’77), ofStamford, CT, assumed the role of SeniorVice President, Finance, of KamanCorporation. Denninger most recently servedas CFO of Barnes Group, Inc.

Mark E. Chertok (BS ’78), of East Hills,NY, has been appointed by the SchonbraunMcCann Group as Senior Managing Directorleading its Financial Outsourcing group. The

Schonbraun McCann Group is the realestate practice of FTI Consulting, Inc., aglobal business advisory firm.

Arlen H. Kantarianin (MBA ’78), ofNew York, NY, was featured inBusinessWeek’s “The Power 100,” a rank-ing of the most influential people in sports.Kantarianin is CEO of the United StatesTennis Association.

Richard E. Khaleel (MBA ’78), of NewYork, NY, was appointed Executive VicePresident of the financial services divisionof Nielsen IAG. Khaleel was previouslyExecutive Vice President and CMO at TheBank of New York.

Jonathan D. Spaet (BS ’78, MBA’79), of New York, NY, was appointedExecutive Vice President, US Sales, a newlycreated position at Vault.com, Inc. Spaetwas formerly Vice President and GeneralManager of Advertising Sales at TimeWarner Cable.

Allen Adamson (MBA ’79), of NewYork, NY, recently published his secondbook, BrandDigital: Simple Ways TopBrands Succeed in the Digital World. Basedon more than 100 interviews with topbranding executives, the book demon-strates how leading brands are embracingdigital technology while staying true tobasic branding principles, and it describeshow brands succeed in the digital world inthe same straightforward manner of his firstbook, BrandSimple: How the Best BrandsKeep it Simple and Succeed. Adamson isManaging Director of the New York office ofLandor Associates.

Linda S. Jackson (BS ’79), of Brooklyn,NY, has been appointed acting AssociateProvost of the City University of New York’sMedgar Evers College. Jackson is currentlyAssociate Professor of English and hasserved as Deputy Chair of the Englishdepartment and as Coordinator ofComposition.

Terrie C. Reeves (MBA ’79), of SunPrairie, WI, has joined the University ofNorth Carolina-Greensboro’s Bryan Schoolof Business and Economics as AssociateProfessor of Health Care Administration.She will be the first faculty member inhealthcare administration at the BryanSchool. Previously, Reeves was AssistantProfessor at the University of Wisconsin-Milwaukee’s Lubar School of Business.

c l a s s n o t e s

44 Sternbusiness

Send us your news, update your contact information, and access the contact information of your fellow alumni throughSWAP, Stern’s online alumni community, at www.stern.nyu.edu/alumni.

Christine Lindahl Reilly (MBA ’79),of Berkeley Heights, NJ, has been honoredas one of the Top 25 Nonbank Women inFinance by US Banker Magazine. Reilly isPresident of CIT Small Bank Lending.

Marion E. Sherman (MBA ’79), ofLondon, OH, has been appointed MedicalDirector for the Ohio Department of MentalHealth. Sherman currently serves on thefaculty at both The Ohio State UniversitySchool of Medicine and The OhioUniversity College of OsteopathicMedicine.

1980sEllen D. Fein (MBA ’80), of North Hills,NY, recently married Lance Houpt. Fein isco-author of The Rules: Time-TestedSecrets for Capturing the Heart of Mr.Right and The Rules for Marriage: Time-Tested Secrets for Making Your MarriageWork.

Anthony S. Glickman (MBA ’80), ofTeaneck, NJ, has been appointed GlobalHead of Risk Services with GlobeOpFinancial Services. Glickman also joinedGlobeOp’s operating committee.

David P. Jacob (MBA ’80), of GreatNeck, NY, has been appointed as ExecutiveManaging Director and Head of StructuredFinance Ratings for Standard & Poor’s.Most recently, Jacob was a principal withAdelson & Jacob Consulting.

Patrick J. McMullan (BS ’80), of NewYork, NY, has announced the launch ofPMc, a luxury fashion magazine availableexclusively to iPhone users, in partnershipwith a new media company.

Jane Dresner Sadaka (MBA ’80), ofNew York, NY, has been appointed to theBoard of Directors of New Media LotteryServices PLC, a gaming content and sys-tems provider, as Non-Executive Director.Sadaka is a retired partner of Kellner DiLeo& Co., an investment firm. She is also amember of NYU Stern’s Board ofOverseers.

Jeffrey A. Tannenbein (BS ’80, MBA’86), of New York, NY, has been appointedCFO at International Derivatives ClearingGroup, LLC, a central clearinghouse toclear and settle interest rate swap con-tracts. Previously, Tannenbein served asGlobal Business Manager of theTechnonolgy and Operation Group atDeutsche Bank.

Audrey A. Appleby (MBA ’81), ofGreenwich, CT, is opening MagicDanceToddler Studio of Arts and Letter, a newpreschool in Greenwich, CT. Appleby isthe owner of the MagicDance-on-the-Water studio, also in Greenwich.

William R. Hannan, Jr. (BS ’81), ofManhasset, NY, has joined MorganKeegan as Vice President, Municipal Salesfor New York. Hannan was most recentlyVice President in institutional sales withJ.P. Morgan.

Lisa A. Scalia-Desmoine (MBA ’81),of Summit, NJ, has been appointedSecond Vice President and ERISAConsultant with New York Life RetirementPlan Services.

William F. Spengler, III (MBA ’81),of Cambridge, MD, has been namedExecutive Vice President and CFO ofSmith & Wesson Holding Corporation, theparent company of the weapons manufac-turer Smith & Wesson Corp.

Steven R. Brown (BS ’82, MBA ’89),of Short Hills, NJ, has been named VicePresident and Senior Portfolio Managerfor the American Century Real EstateFund. Previously, Brown served asNeuberger Berman’s Global Head of RealEstate Securities.

Gregory C. Carey (MBA ’82), ofClarksville, MD, was featured inBusinessWeek’s “The Power 100,” a rank-ing of the most influential people insports. He helped finance construction ofthe new Yankee Stadium. Carey isManaging Director at Goldman Sachs.

Edward P. Gilligan (BS ’82), ofBrooklyn, NY, has been appointed to theBoard of Directors of Concur, a provider ofon-demand employee spend managementservices. Gilligan is Vice Chairman ofAmerican Express Company and also amember of its operating committee.

Andrew L. Goodenough (MBA ’82),of Rye, NY, has been named President andCEO of Summit Business Media.

Sanford G. Hausner (BS ’82, LLM ’87), of New York, NY, has joined ArentFox LLP as Partner in its New York office.

Lawrence Kneip (MBA ’82), ofWyckoff, NJ, has been appointed SmallBusiness Administration Director and VicePresident at Indus American Bank.

“I always had the desire to learn inan unusual way, with a global slant,”said Chris Burggraeve, Chief MarketingOfficer at Anheuser-Busch InBev.Burggraeve, who believes that every-thing is international in scope, alwayswanted to study and build a careerinternationally. So, when NYU Stern,HEC Paris, and the London School ofEconomics and Political Science estab-lished a joint MBA program, Burggraevelasered right onto the opportunity. Now,having lived in Berlin, Brussels,Dusseldorf, Istanbul, North Carolina,Paris, Prague, and Vienna, he has achieved his dream.

Burggraeve was drawn to the TRIUM Global ExecutiveMBA program after reading about its unique curriculum in anadvertisement in the Financial Times. The program enabledhim to take advantage of three schools, each a renowned cen-ter of expertise: Stern in finance, the London School ofEconomics in the socioeconomic sciences, and HEC Paris inCartesian mathematics. He found Stern to be the most chal-lenging academically. “The level of [education in] finance wasvery rigorous,” he recalled. He was inspired by how much thecourses pushed students with 15 years of experience out of theircomfort zones. “Professors such as Aswath Damodaran andPaul Brown made the program very personalized and forcedyou to walk in your competitors’ shoes.”

Burggraeve joined InBev, which recently merged withAnheuser-Busch, after more than 12 years with The Coca-ColaCompany, where he last served as Group Marketing Director forthe European Union. Previously, he worked for Procter &Gamble Benelux in Brand Management and Innovation, a nat-ural progression from earlier jobs in consulting and technologystartup companies. Burggraeve has maneuvered his career inan increasingly global context and attributes his success to hisfinance-driven marketing approach. “The type of marketerthat I believe in is a person who understands finance – an indi-vidual with a balanced perspective,” he said.

Burggraeve now has the opportunity to unify the brands oftwo of the world’s leading brewers. “We aspire to become thebest beer company in a better world,” he said, “a world inwhich a brewing company can use its resources to drive respon-sible consumption and environmental sustainability.”

Learning about different people and cultures is a passion aswell as a profession for Burggraeve. And when he is not travel-ing, he finds many moments to enjoy his favorite pleasures: hav-ing increasingly philosophical conversations with his 13-year-olddaughter, running, and relaxing with an ice-cold Stella Artois.

“If you have the chance, go and discover the world – workabroad if you have the opportunity,” he advised. “And, as youdo, explore the beers that go with it – become a global zythol-ogist – a true beer connoisseur.”

A G l o b a l Z y t h o l o g i s t

Chris Burggraeve (MBA ’05)

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46 Sternbusiness

Inc. formed to create profitable customer-focused organizations. Before joining Zep,O’Brien was Vice President of Sales andMarketing at Atlas Paper Mills.

Lauren D. Rich-Fine (MBA ’83), ofCleveland, OH, has been elected to the Boardof Directors of Dolan Media Company andalso appointed to the company’s compensa-tion committee. She is currently a practitioner-in-residence at Kent State University’s Collegeof Communication and Information and servesas Research Director for ContentNext.

Kevin J. Bannon (MBA ’83), of MountKisco, NY, has been appointed to a newly-created directorship on the Board of UrstadtBiddle Properties Inc.

Geoffrey Colvin (MBA ’83), of Fairfield,CT, recently published a book, Talent isOverrated. Colvin is a writer at Fortunemagazine.

Joseph G. O’Brien (BS ’83), ofDelafield, WI, has been appointed Presidentof Zep East, a market-faced business Zep

Thomas L. Tran (MBA ’83), ofWeatogue, CT, was named Senior VicePresident and CFO of WellCare HealthPlans, Inc, a provider of managed careservices.

Stephen M. Coutts (MBA ’84), ofRancho Sante Fe, CA, has been appointedCEO, President, and Director of Biocept,Inc., a biotechnology company that engi-neers solutions that provide the foundationfor a new class of diagnostic assays.Coutts was most recently Director of

Pharmaceutical Development at CypressBioscience, Inc.

David P. Gurwitz (MBA ’84), of Monsey,NY, has recently released his first album, “Hearthe Children,” a collection of piano solos.

Stelios Papadopoulos (MBA ’84), of GreatNeck, NY, has been appointed to the Board ofDirectors of Regulus Therapeutics LLC, a jointventure between Alnylam Pharmaceuticals, Inc.and Isis Pharmaceuticals, Inc. formed to dis-cover, develop, and commercialize microRNA-based therapeutics. Papadopoulos retired asVice Chairman of Cowen and Company, LLCin 2006.

Jerry F. Barbanel (BS ’85), of Tenafly, NJ,has been appointed President and CEO ofPrecision Discovery, a provider of IT risk andlitigation consulting solutions. Barbanel joinsPrecision Discovery from Aon Consulting,where he served as Executive Vice Presidentfor the financial advisory and litigation con-sulting services practice.

Sharon Sabba Fierstein (MBA ’85), ofWoodbury, NY, has been appointed to thePublic Company Accounting Oversight Board’s2009-2010 Standing Advisory Group. Fiersteinis currently Partner in Marks Paneth & ShronLLP’s Litigation and Corporate FinancialAdvisory Services Group.

Gary Katcher (MBA ’85), of Port St. Lucie,FL, has been appointed Senior ManagingDirector and Head of Global Institutional FixedIncome of Knight Libertas LLC, an institutionalfixed income broker-dealer. Katcher is thefounder of Libertas Holdings, LLC, a boutiqueinstitutional fixed-income brokerage firm thatwas acquired by Knight Capital Group, Inc.

Christianna Wood (MBA ’85), ofSacramento, CA, has been named to the Boardof Directors of H&R Block. Wood is the CEO ofCapital Z Asset Management.

Deborah Foye Kuenstner (MBA ’86), ofNewton, MA, has been named ChiefInvestment Officer of Wellesley College, herundergraduate alma mater.

Peter A. Kyviakidis (BS ’86), of Milford,PA, has joined LECG, a provider of independ-ent testimony and strategic advisory services,as Managing Director. Kyviakidis will focus hispractice on forensic accounting and financialadvisory consulting services.

Dorothy S. Pisarski (MBA ’86), of WestDes Moines, IA, received the DistinguishedAdvertising Educator of the Year Award for the

c l a s s n o t e s

When Maria Pierdicchi arrived in New York from Milan as avisiting student in the doctoral program at NYU Stern, she hadlittle inkling she would end up a powerhouse in finance. Over thenext two decades, she started a high-growth equity market at theItalian stock exchange, won the international Bellisario Awardfor distinction in business, and organized women’s networks inbanking to encourage other women to follow in her footsteps.

Pierdicchi came to Stern as a researcher in financial institu-tions with a degree in economics, after completing a short con-sulting stint at the World Bank. While she found research inter-esting, she knew she wanted to expand her experience, andthought that Stern would be an ideal place to do it. At her homeinstitution, Bocconi University, studying abroad was not encour-aged. “At that time,” she recalled, “not many students went

abroad. They thought I was not using my time wisely.” Once at Stern, she was quickly intoxicated by the thrill of Wall Street. “In New York, you

were in the center of it all,” she said. Pierdicchi realized she wanted to strengthen her back-ground in finance and became attracted to the “more pragmatic” approach of an MBA edu-cation. Transferring from the PhD program, she delved into an MBA in finance and soonbecame impressed by her fellow students, who hailed not only from the US, but also fromItaly, Spain, South America, and Israel, and “brought a lot of experience from the streets. Itwas very interesting to me.” After graduating, Pierdicchi joined the private sector, first atCitibank in Italy and then at Premafin SpA, where she focused on investor relations.

In 1998, as the stock exchange in Milan was privatized for the first time, Pierdicchiseized a new opportunity there. She designed and launched Nuovo Mercato, which shedescribed as “an Italian version of NASDAQ,” an extremely successful project that she man-aged for five years through the heady climate of the late 1990s technology boom. In 2003,she moved on to her current position in an American company, as the Managing Directorand Country Head for both Italy and Spain at Standard & Poor’s, which provides rating andinvestment services.

Pierdicchi has expertly navigated her career, although, she acknowledged, “It was chal-lenging to be a woman in finance in Italy.” Despite an atmosphere keyed to loyalties and“not so open to women in senior positions,” she has advanced based on her accomplish-ments. Early in her career, she was often in the office until 9:30 pm. Now she finds morebalance. Describing herself as “a curious person,” she reads everything from literature topsychology to the latest in business. She also enjoys playing sports. With all this, she evenfinds time to reconnect with her fellow Stern alumni, most recently by serving on the hostcommittee for the upcoming global alumni conference in Barcelona, which will convene anextended community that is most fortunate to count her in its ranks.

C r e a t i n g a T r i p l e A - R a t e d C a r e e r

Maria Pierdicchi (MBA ’88)

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Ninth District of the American AdvertisingFederation. Pisarski is Assistant Professor ofAdvertising at Drake University.

Jon W. Anderson (MBA ’87), of Madison,NJ, has been appointed Global Head of Over-the-Counter Derivatives for GlobeOp FinancialServices. He will also join GlobeOp’sOperating Committee. Previously, Andersonserved as Managing Director of TradingTechnologies at BlueMountain CapitalManagement.

Ted A. Berenblum (MBA ’87), of CosCob, CT, has been named Head of AlternativeInvestments, a newly created position, for BNYMellon Wealth Management, a wealth andinvestment management business of The Bankof New York Mellon Corporation.

John A. Kritzmacher (MBA ’87), of FarHills, NJ, has been appointed CFO andExecutive Vice President of Global Crossing,which provides telecommunications solutionsover the world’s first integrated global IP-based network.

Kathleen G.R. Madigan (MBA ’87), ofBensalem, PA, has joined the Dow JonesNewswires editorial team as an economicswriter; she will also write its “Big Picture” col-umn. Previously, Madigan was Senior Writerand Market Analyst with Lord Abbett, an inde-pendent money management company.

Al Sapienza (BS ’87), of West Hollywood,CA, was recently married to Michelle Widlitz.Sapienza is an actor, most known for his rolein “The Sopranos.”

James J. Ambrose (MBA ’88), ofBrookfield, WI, has been appointed Chairmanof the Board of the Equipment Leasing andFinance Association. Ambrose is the Presidentof the Equipment Finance Organization for GEHealthcare Financial Services.

Richard C. Janda (MBA ’88), of New York,NY, has been appointed Director of Research,a new position, with Loughlin Meghji +Company, a restructuring advisory firm. Mostrecently, Janda served as Director of Researchwith XRoads Solutions Group, a boutique cor-porate restructuring firm.

Seth H. Lehman (BS ’88, MBA ’93), ofWesley Hills, NY, has joined Fitch Ratings asSenior Director in the Global Infrastructure andProject Finance Group. Previously, Lehmanserved as a director and senior underwriter atFinancial Guaranty Insurance Co.

Debra Sandler (MBA ’88), of Yardely,PA, has been named the 2008 BlackEnterprise Corporate Executive of the Year.She is the Worldwide President of McNeilNutritionals L.L.C., a healthcare and beautyproducts company, part of Johnson &Johnson.

Mark R. Zygaj (MBA ’88), of EastAmherst, NY, has been elected to the Boardof Directors of the National Association ofSpecialty Health Organizations. Zygaj is theCOO and Director of Palladian MuscularSkeletal Health, a benefits managementorganization.

Habib P. Achkar (MBA ’89), of London,England, has been appointed CEO ofMorgan Stanley Saudi Arabia. Achkar wasformerly Morgan Stanley’s Head of Salesand Trading for France; he has worked atMorgan Stanley since 1989.

Christopher M. Czaja (BS ’89, MBA’97), of New York, NY, has been namedExecutive Vice President of InsightInvestments Corporation, an independentleasing agent of IT and medical equipment.

Tina L. Fiumenero (BS ’89), ofPrinceton, NJ, has been promoted to CFOof Vitae Pharmaceuticals, Inc., an emergingpharmaceutical company dedicated to thediscovery and development of innovativesmall molecule medicines. Fiumenerojoined Vitae in January 2006 as SeniorVice President of Finance andAdministration.

Nina Goodheart Kessler (MBA ’89),of Doylestown, PA, has been promoted toVice President of Cardiac Rhythm DiseaseManagement Marketing. CRDM is the old-est and largest business unit of Medtronic,a company which develops life-changingtechnologies that improve the way chronicdiseases are treated.

Elizabeth J. Satin (MBA ’89), of NewYork, NY, has joined The Jordan, EdmistonGroup, Inc. as Managing Director. TheJordan, Edmiston Group, Inc. is a providerof independent investment banking servic-es for media, information, marketing serv-ices, and related technologies.

Henry C. Schmeltzer (MBA ’89), ofNew York, NY, has been appointed to theBoard of Directors of Euromatix Fund plc,an investment company with variable capi-tal. Schmeltzer is currently establishing aninvestment management firm in the UKwith several partners. Previously, he was

Managing Director at UBS Limited inLondon.

Craig T. Shepherd (BS ’89, MFA ’97),of New York, NY, was recently married toMarlene Kandler in Chicago. Shepherd isthe Executive Producer of “Home MadeSimple” on the TLC cable network. He wasalso the Line Producer of “Girlfight,” thewinner of a Grand Jury Prize at theSundance Film Festival in 2000.

1990sNicholas S. Cyprus (MBA ’90), ofScotch Plains, NJ, was inducted into thePinnacle Alumni Society by FairleighDickinson University College at Florham inMadison, NJ. Cyprus is Controller and ChiefAccounting Officer for General MotorsCorporation.

Ira S. Fishkin (MBA ’90), of Mahwah,NJ, has joined Eisai Corporation of NorthAmerica as Associate Director of Facilitiesand Administration. Prior to joining Eisai,Fishkin worked at Hertz Corporation asDirector of Corporate Engineering.

Charles-Henry Choël (BS ’91), of Paris,France, was promoted to Global Head ofTrading Solutions with GL TRADE, a globalprovider of multi-market and multi-assetsolutions for international financial institu-tions. Choël joined GL TRADE in 2002.Since 2006, Choel has been Deputy CEO ofthe Asian region and Managing Director ofthe Japan office.

R. Brooks Gekler (MBA ’91), of St.Paul, MN, joined the University ofWashington Bothell as Director of itsBusiness Development Center, a unit withinthe Business Program at UW Bothell.

John Gonsalves (MBA ’91), of Edison,NJ, has been appointed Vice President andHead of Communications for the Americasat Aricent. Aricent is a global software, serv-ices, and solutions provider. Most recently,Gonsalves was Partner and Practice Leaderof Strategy and Performance ManagementPractice at EMC Global Services’ communi-cations and media sector.

Jeffrey A. Seidel (MBA ’91), of NewCaanan, CT, has been hired as VicePresident of Corporate Strategy, where he isresponsible for strategic initiatives and plan-ning at Ener1, Inc., a maker of advancedlithium-ion battery systems for the new gen-eration of hybrid and electric vehicles.Previously, Seidel was Global Head of

Convertible Research at Credit Suisse.

Kee-Meng Tan (MBA ’91), of New York,NY, has been appointed to the newly-createdposition of Managing Director, Head of theelectronic trading group in Europe, withKnight Capital Group, Inc. Knight CapitalGroup, Inc. is a capital markets firm that pro-vides electronic and voice access to the glob-al capital markets across multiple asset class-es for buy-side, sell-side, and corporateclients.

Neeraj K. Vohra (MBA ’91), ofAlexandria, VA, has joined Signal Hill, aBaltimore-based specialty investment bank-ing, research, and institutional brokeragefirm, as Managing Director. Prior to joiningSignal Hill, Vohra was Managing Director inthe Technology Investment Banking Group atFriedman, Billings, Ramsey & Co., Inc., a realestate investment trust that invests in mort-gage-related assets.

David Yaudoon Chiang (BS ’92), ofBrooklyn, NY, has been appointed to theBoard of Directors of the American LorainCorporation, an international packaged foodscompany based in China’s Shandongprovince. Chiang is currently a managingdirector overseeing alternative energy, tech-nology, and China banking efforts atNortheast Securities, Inc., a multi-line finan-cial services firm.

Robert H. Getz (MBA ’92), of Salt LakeCity, UT, has been appointed to the Board ofDirectors of Palladon Ventures Ltd., aresource company focused on building pro-duction facilities at the Comstock/MountainLion iron mine in Iron County, Utah. Getz hasserved as Managing Director and Partner ofCornerstone Equity Investors, LLC, a NewYork-based private equity investment firm,since 1997.

Simon Satanovsky (MBA ’92), ofBrooklyn, NY, has been promoted to Partnerwith Options Group, a global executive searchand strategic consulting firm.

Joanne Taylor (MBA ’92), of NewRochelle, NY, has been named COO of TheHousing Development Fund in Stamford, CT.Previously, Taylor served as Vice President ofInsured Portfolio Management for MBIAInsurance Corp.

Erik T. Asgeirsson (ADCRT ’93, MBA’02), of New York, NY, appeared onAccounting Today’s list of 2008 Top 100Most Influential People.

c l a s s n o t e s

48 Sternbusiness

When she began her career as a securities analyst in the early1970s, Linda Strumpf was a pioneer in a male-dominated envi-ronment. The business world was so lopsided with regard to gen-der, she recalled recently, “On a plane, if you were [a woman]wearing a suit, they [the men] would hand you their coat think-ing you were a stewardess.” She was hard-pressed to find awomen’s restroom on the executive floor. Exclusive all-male socialclubs in Manhattan refused to let her wait in their lobbies or entercertain floors. For one business meeting, she remembered a staffmember asking her to leave the room. She replied, “I’m sittingdown. If you want to make the other 80 people in here leave, youcan.” She laughed, “So I sat there, and the walls didn’t cave in.”

Strumpf has been a woman of firsts. After graduating fromPennsylvania State University with a BA in economics, she beganher career in the for-profit sector as an assistant to a securitiesanalyst at Prudential. Quickly realizing the comparative earning power of the MBA gradu-ates around her, she decided to go to business school, and chose NYU Stern for its reputa-tion and its New York City location. After earning her degree, she went to Equitable Life asa securities analyst and worked her way up to become a portfolio manager – and one of thefirst women to manage large pension funds. She recalled, “Running pension funds for bigcorporate clients was not something that women did.”

In 1982, Strumpf was recruited into the non-profit world as a portfolio manager at theFord Foundation, a career change that reflected her long-standing passion for the founda-tion’s mission of helping the world’s poor and advocating for women’s rights and civil rights.After managing the Foundation’s billion-dollar equity fund for 10 years, she became itsChief Investment Officer in early 1993, a position she still holds. “No woman had ever beenChief Investment Officer of a major foundation before,” she said. “It was a challenge toprove to the people doing the search that I was up to the task.”

Since Strumpf arrived in 1982, the Ford Foundation’s assets grew from $2.5 billion to arecent high of almost $14 billion. During her tenure, the Foundation, which runs solely oninvestments generated from the Ford family’s original gift, has given more than $10 billionin grants to strengthen democratic values, reduce poverty and injustice, advance humanachievement, and promote international cooperation. For years, the Foundation supportedMuhammad Yunus, a pioneer in the micro-credit field, who won a Nobel Peace Prize in2006 for his work to alleviate poverty in Bangladesh.

This fall, Strumpf will retire, and she already has plans. A self-described “type A per-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-band, a high school psychologist also retiring in June. On deck is a trip to Africa on safari– her next adventure in a world she continues to both explore and enrich.

A W o r l d o f G o o d

Linda Strumpf (MBA ’72)

Paul E. Mallen (MBA ’93), of PineBrook, NJ, was promoted to Executive VicePresident of Amalgamated Life InsuranceCompany and continues to serve as CFO.

Jonathan S. Miller (BS ’93), of Armonk,NY, has joined the investment advisor ofFifth Street Finance Corp as Director of EastCoast Origination. Prior to joining FifthStreet, Miller worked at Bear Stearns, mostrecently as Managing Director in theLeveraged Finance Group.

Paul D. Fiore (BS ’93), of Beverly Hills,CA, has been appointed to the Board ofDirectors of Aqua Connect Inc., a Mac ter-minal services company.

Sonjoy Ganguly (BS ’93), of New York,NY, has been hired by Ringleader Digital,the only third-party ad-serving network formobile devices, as Vice President ofProduct Management. Prior to Ringleader,Ganguly was Director of ProductManagement for the Rich Media productline at DoubleClick.

Charles Moon (MBA ’93), of Sherborn,MA, has joined Morley Financial Services,Inc. as Chief Investment Officer.Previously, Moon was Managing Directorat Hartford Investment Management.

Beth Murray (MBA ’93), of Chatham,NJ, joined NYU Stern as Chief MarketingOfficer, a newly created position, in the fallof 2008. Previously, Murray served asVice President and Head of GlobalMarketing for the Financial InstitutionsGroup of American Express Bank.

Frank W. Baier (MBA ’94), of Summit, NJ,has joined Securities Industry and FinancialMarkets Association as CFO and ChiefAdministrative Officer. Previously, Baier hadbeen a consultant at Meridian Capital Group.

Jeffrey M. Farber (MBA ’94), of Stamford,CT, has been appointed Executive VicePresident Finance/Corporate Development andCFO of GAMCO Investors, Inc., an investmentadvisory company.

Lily Huang (BS ’94, MBA ’00), of ForestHills, NY, was recently married to Hsiu-HsienLing. Huang is Vice President in the investmentmanagement division of Goldman Sachs inManhattan.

Brian D. Matthews (MBA ’94), ofGaithersburg, MD, has been appointed ChiefStrategy Officer of Avail Media, a provider ofprofitable Internet protocol television (IPTV)solutions. Most recently, Matthews was VicePresident of Enterprise and Industry SolutionsMarketing for VeriSign, Inc.

Evelyn M. Morrow (MBA ’94), of New York,NY, was recently married to Steven Solinsky.Morrow is a project manager for businessdevelopment at the Visiting Nurse Service ofNew York in Manhattan.

Heather Mutterperl (MBA ’94), of NewRochelle, NY, was named Senior Asset Managerat Hudson Realty Capital. Previously, Mutterperlserved as Asset Manager at InvestcorpInternational.

Che D. Watkins (MBA ’94), of Atlanta, GA,serves as the interim Executive Director of theRegional Business Coalition in Atlanta, GA.Watkins is the Vice President for ExternalAffairs at the Metro Atlanta Chamber ofCommerce.

Calvin G. Wong (BS ’94), of Summit, NJ,has been named Executive Vice President ofAdvertising Sales and Operations for appssavvy,a direct sales team for social media applica-tions. Previously, Wong served at the companyhe co-founded in 1996, Community Connect,Inc. (CCI), a publisher of niche social networks.

Kenneth Y. Chang (BS ’95), of Whitestone,NY, has joined Sibson Consulting’s retirementpractice as Vice President and ConsultingActuary. Previously, Chang served as a seniormanager with Deloitte Consulting.

Vinay T. Dayal (MBA ’95), of Little Neck,NY, has been appointed to Treasurer of theMetropolitan Transit Authority (MTA). Dayal wasmost recently the MTA’s acting Finance Director.

Sternbusiness 49

Brian R. DiDonato (MBA ’95), of BlueBell, PA, has joined Sorin CapitalManagement as Senior Partner and memberof the Investment Committee. Sorin Capital isa leading independent alternative investmentfirm.

Anatoly Nakum (BS ’95), of New York, NY,has been appointed Managing Partner andHead of high-grade and crossover flow trad-ing in Barclay Capital’s US Fixed IncomeGroup. He joins Barclay’s New York officefrom Deutsche Bank AG. Nakum serves onthe NYU Stern Dean’s Advisory Council.

Sapna P. Shah (BS ’95), of Albertson, NY,recently married Srinivasan Iyer (BS ’97),of Bayside, NY. Shah is a tax accountant inthe real estate group at Ernst & Young. Iyer isDirector for Bond Trading at UBS. The couplemet while attending NYU Stern.

Dominick C. Tolli, Jr. (MBA ’95), ofWayne, NJ, has been named Senior VicePresident of Marketing for North America forSpinVox, a service that converts voicemailsinto mobile phone SMS text messages and e-mails. Previously, Tolli led mobile data andservice delivery efforts at Virgin Mobile as itsVice President of Innovation Services.

Mark K. Bhasin (BS ’96), of New York,NY, has joined Palisades Financial as SeniorDirector of Originations. Bhasin most recentlyserved as a loan officer for CWCapital, and heis also Adjunct Professor of Real EstateDevelopment at Columbia University.

Jeffrey J. DeKorte (MBA ’96), ofWashington, DC, has joined Travel AdNetwork as Vice President of ProductDevelopment. Previously, DeKorte served asPresident and COO at LeisureLogix.

Nicholas J. Hart (MBA ’96), of Randolph,NJ, has joined Emisphere Technologies, Inc.as Vice President of Strategy andDevelopment. Emisphere Technologies, Inc. isa biopharmaceutical company that focuses ona unique and improved delivery of therapeuticmolecules and pharmaceutical compounds.

Donna H. MacPhee (MBA ’96), ofRidgewood, NJ, has been named VicePresident for Alumni Relations and Presidentof the Columbia University AlumniAssociation.

Timothy M. Maloney (MBA ’96), ofRaleigh, NC, was appointed Senior Director ofDigital Power Marketing with ExarCorporation, a fabless semiconductor compa-ny. Maloney was most recently the Senior

Director, Power Management and DiscreteProducts, for Infineon Technologies.

S. Douglas Pugliese (MBA ’96), ofWynnewood, PA, has joined Marshall &Stevens Incorporated as ExecutiveManaging Director, where he will beresponsible for management of the firm’seastern US operations. Marshall & Stevensprovides appraisal and valuation servicesnationwide.

Nikhil Puri (MBA ’96), of New Delhi,India, has been appointed ManagingDirector for Ambit Corporate Finance withAmbit Holdings Pvt. Ltd., a financial serv-ices firm based in Mumbai.

Bradford D. Van Siclen (MBA ’96), ofUpper Montclair, NJ, has been elected tothe Board of Directors of MetabolicResearch, Inc., a biotechnology company.Van Siclen is Partner in BartholomewInternational Investments.

Manoj S. Chouthai (MS ’97, MBA’00), of Jersey City, NJ, has been named2008’s Chief Information Officer of theYear by the New Jersey TechnologyCouncil. Chouthai is VP of InformationTechnology and CIO for Public ServiceEnterprise Group (PSEG) of Newark, abranch of the publicly-traded, New Jersey-based energy and energy services compa-ny. He also serves on the Board of theMental Health Association of EssexCounty.

Raymond J. Deacon (MBA ’97), ofDenver, CO, has joined Pritchard CapitalPartners as Senior Exploration andProduction Energy Analyst. PritchardCapital Partners is an energy investmentbank.

Sharon Rebecca Gonen (BS ’97) andShachar A. Gonen (MBA ’00), of NewYork, NY, welcomed twins, Ezra MaierGonen and Elianna Meira Gonen, onOctober 25, 2008.

Robert Meringolo (MBA ’97), of NewYork, NY, has joined FBR Capital MarketsCorporation, an investment bank servingthe middle market, as Managing Director.Meringolo most recently served as SeniorManaging Director on Bear Stearns’ con-vertible securities sales team.

John W. Schrader (MBA ’97), ofWeston, CT, has joined Duff & PhelpsCorporation as Managing Director.Previously, Schrader served as Managing

Director and Head of Global RiskManagement in the Securitized ProductsGroup at Morgan Stanley.

Michael L. Achenbaum (MBA ’98), ofNew York, NY, was featured in PODER mag-azine’s “23 under 40,” its first annual list of“entrepreneurs, executives, leaders, andartists under 40 who are shaping SouthFlorida and its perception around theworld.”

Matthew R. Chasin (MBA ’98), of NewYork, NY, has joined Sorin CapitalManagement, LLC, an independent alterna-tive investment firm, as COO, Partner, andmember of the investment committee.Previously, Chasin was Senior ManagingDirector and Head of Repo FinancingActivities for Mortgage and StructuredProducts at Bear Stearns.

Grace W. Cheng (MBA ’98), of NewYork, NY, has joined GoldenTree InSitePartners as its CFO. Cheng most recentlyserved as Executive Director for MorganStanley’s private equity real estate fund.

Kim T. Gehrke (MBA ’98), ofHummelstown, PA, has joined CitadelInvestment Group, L.L.C. as Co-head ofInternational Distribution and Marketing.Gehrke was most recently with MerrillLynch, where he served as Co-head ofGovernment Institutional Sales. Citadel is aglobal financial institution focused on alter-native investment strategies and services.

Mark A. Glickman (MBA ’99), ofMarlboro, NJ, has been promoted to SeniorVice President, Sales and Marketing, aswell as Corporate Officer, with OscientPharmaceuticals Corporation. Glickmanjoined Oscient in August 2007 as VicePresident of Sales.

Owen J. Jones (MBA ’98), of Durham,NC, has been appointed Senior VicePresident, Sales Trader, with PritchardCapital Partners, an energy investmentbank and institutional financial servicesfirm. Previously, Jones was Director ofEquity Trading in Lehman Brothers’ Londonoffice.

Tomasz M. Józefacki (BS ’99, MBA’02), of Brooklyn, NY, has been elected tothe Management Board of Agora SA, amedia corporation based in Poland.Józefacki is currently its Head of Internetoperations.

Colleen Kelleher Sorrentino (MBA’98), of Staten Island, NY, has been namedone of the 50 Most Influential Women byIrish Voice in the newspaper’s first suchannual ranking. Kelleher Sorrentino is VicePresident of Advanced Strategies and SeniorInvestment Officer at Wall Street Access LLC.

Joshua L. Kirschner (MBA ’98), of NewYork, NY, has been named CMO of InformTechnologies, a “journalistic” technologysolution for established media companies.Previously, Kirschner was SVP of GlobalProduct Development with Marsh, Inc.

Constantine Korologos (MBA ’99), ofNew York, NY, has joined Deloitte FinancialAdvisory Services as Director of Real EstateConsulting, after serving previously as amanaging director at Wachovia.

Bryan D. Kraft (MBA ’99), of Chatham,NY, has been appointed Vice President ofMedia, Cable, and Entertainment, at Bank ofAmerica. Kraft was previously Vice Presidentand Senior Research Analyst at CreditSuisse.

Lisa C. Markowitz (BS ’99), ofAllentown, PA, along with husband, Mosha,and daughter, Tali, welcomed the birth of hersecond daughter, Aviva Rachel, on October18, 2007.

David W. Tang (MBA ’99), of Shanghai,China, has been appointed CFO and VicePresident of Vimicro InternationalCorporation. Vimicro designs and developsmultimedia semiconductor products andsolutions. Prior to joining Vimicro, Tangserved as the CFO of CNinsure Inc., a NAS-DAQ listed company operating in China.

Sharon Weinstein (MBA ’99), of NewYork, NY, has joined FBR Capital Markets’Financial Institutions group as ManagingDirector. Previously, Weinstein served asManaging Director and Sector Head ofDepository Institutions and CorporateFinance at Wachovia Securities.

2000sSteve Lee (MBA ’00), of New York, NY,will serve as a portfolio manager for theNuveen Multi-Currency Short-TermGovernment Income Fund. Lee currentlyserves on the portfolio management team forthe Nuveen Global Government EnhancedIncome Fund. Lee has been with NuveenInvestments, a global provider of investmentservices to institutions and high net worthinvestors, since spring 2007.

50 Sternbusiness

Michael Levy, Managing Director ofthe Investment Banking Division atMorgan Stanley, understands the impor-tance of credibility. Having taken a cir-cuitous route to investment banking, hehad to earn it. And in the competitivemarket new graduates face today, hegenerously bestows it on the NYU Sterngraduates he recruits for his firm.

Levy’s appetite for learning led himto take a path different from the tradi-

tional financier. After receiving his bachelor’s degree in 1989from Stern – which he chose based on its reputation andglobal outlook – Levy opened a graphic design firm. “WhenI started at NYU, there wasn’t much dorm housing available,so I shared a studio apartment with two of my friends whowere going to Parsons School of Design,” said Levy. Afterreceiving his degree, Levy teamed up with one of his room-mates who graduated the prior year and was working as afreelance graphic designer. “We decided to form a legitimatecompany because I could add the business piece to thepuzzle.” They opened Lowell Design Group in 1989 andsuccessfully established themselves in the graphic designcommunity.

After that initial success, Levy added another page to hisschooling, garnering a law degree from Brooklyn LawSchool. After graduation, he transitioned to investmentbanking, and following a few positions in finance, joinedMorgan Stanley in 1998. He has remained there, serving notonly as Managing Director, but also as Co-head of the firm’sReal Estate Banking Group for the Americas and GlobalHead of Lodging.

Gaining credibility in investment banking wasn’t a slamdunk. “I had zero experience in banking and didn’t comefrom a traditional background,” he explained. “Mostbankers I spoke to were focused on hiring MBA graduateswith traditional finance backgrounds from Ivy Leagueschools – not newly minted lawyers with graphic design cre-dentials.” However, Levy was determined to gain a footholdin the industry and show how well an NYU graduate couldperform.

Now, as Co-captain of Morgan Stanley’s recruiting effortsat Stern, Levy takes every chance he can to recruit Sterngraduates. “Stern graduates have it all: common sense,international exposure, and academic excellence,” he said.“The School’s reputation throughout the financial communi-ty is unsurpassed and its graduates are highly coveted.”

Levy admitted that he loves working for Morgan Stanleyand that his “goal is to continue to help the firm build thecore team of Stern alumni so that the network and recruitingefforts will be self-sustaining, and that Stern will be a majorcontributor to the firm’s success.” He’s clearly earned thecredibility to make that happen.

P a y i n g i t F o r w a r d

Michael Levy (BS ’89)

Debanjan Mitra (MPhil ’00, PhD ’03),of Gainesville, FL, has been named aMarketing Science Institute Young Scholar.The Marketing Science Institute’s biennialYoung Scholar Program brings togethersome of the most promising scholars inmarketing and closely related fields.

Karen S. Patton (MBA ’00), of Wyckoff,NJ, was named CFO of Bravo Media. Pattonwas formerly Vice President of Finance atWNBC.

Suzanne B. Schiavelli (MBA ’00), ofHoboken, NJ, has been appointed to theposition of Principal, Specialty Finance, atBank of America. Schiavelli previouslyworked at Morgan Stanley.

Carol J. Simon (MBA ’00), of ShortHills, NJ, is the founder and owner of CarolSimon Consulting, LLC, a consulting firmbased in Roseland, New Jersey, that special-izes in the assessment and management ofcounterparty risk with financial institutions.Simon also serves as a trainer for FitchTraining, a company offering credit riskworkshops.

Jeremy W. Szeto (BS ’00), of SugarLand, TX, was recently hired as an urgentcare physician at The Physicians at SugarCreek and also as an emergency roomphysician at a local Houston, TX, hospital.Szeto is currently in private practice inSugar Land, TX, specializing in family medi-cine.

Guatam Bhandari (MBA ’01), of NewYork, NY, has been appointed to lead thedevelopment of the investment platform forMorgan Stanley Infrastructure in India,Middle East, and Sub-Saharan Africa.

Shahid Shafi Khan (MBA ’01), ofPrinceton Junction, NJ, has been promotedto Senior Partner with Interactive BroadbandConsulting Group, LLC (IBB), a boutiqueconsulting firm advising top management inthe broadband-related sectors of cable,mobile, technology, and digital media. Khanis currently a fellow at the University ofPennsylvania’s Wharton School of Business.

Lena M. Liu (MBA ’01), of New York, NY,was recently married to Frank Stonebanks.Liu is Managing Director for Banc ofAmerica Securities.

Andrew Pancer (MBA ’01), of Tenafly,NJ, has joined Media6 degrees, a companythat provides major brand marketers scala-ble, bespoke audiences using the power ofsocial graph data, as its COO. Previously,

Pancer was Vice President, DigitalDevelopment, at The New York TimesCompany.

Kiran S. Patel (BS ’01), of JacksonHeights, NY, has joined Morgan Keegan asAssociate Vice President, Municipal Salesfor New York. Patel was most recently anassociate in municipal sales with J.P.Morgan.

Ron D. Perry (BS ’01), of Englewood,NJ, has been featured in Billboardmagazine’s “30 under 30” list, which iden-tifies “individuals who drive the fields ofmusic and entertainment forward with theirartistic and business vision.” Perry isSenior Creative A&R for Songs MusicPublishing.

Jeffrey E. Berman (BS ’02), ofRockville, MD, is Partner with BermanEnterprises, a family-owned companybased in Maryland that will form a partner-ship with former New York City MayorRudolph Guiliani’s company, GiulianiPartners, to be called the BermanEnterprises Opportunity Fund.

Greg B. Habay (BS ’02), of New York,NY, has joined Collins as Senior VicePresident. Collins serves clients in theproperty-casualty, life, accident, and healthinsurance markets.

Michael Margolis (MBA ’02), of WestOrange, NJ, has been hired by MerrimanCurhan Ford as Managing Director in itshealthcare investment banking practice.Merriman Curhan Ford is a full-servicefinancial services firm.

Jerome Schneider (MBA ’02), of NewYork, NY, has been hired as Executive VicePresident, Portfolio Manager, and FinanceSpecialist for PIMCO, Inc., an investmentmanagement company based in NewportBeach, California. Previously, Schneiderwas Senior Managing Director at BearStearns.

Angela Faye Taylor (MBA ’02), ofMinneapolis, MN, has been hired as VicePresident and General Manager of theWashington Mystics, a Women’s NationalBasketball Association team based inWashington, DC. Previously, Taylor was theVice President of Business Developmentfor the Minnesota Lynx.

Eli S. Goldschmiedt (MBA ’03), ofWoodsburgh, NY, has joined AmherstSecurities Group, L.P., a privately held bro-ker-dealer specializing in residential mort-

c l a s s n o t e s

Sternbusiness 51

gage-backed securities. Most recently,Goldschmiedt worked at J.P. MorganSecurities.

Timothy Zaino (MBA ’03), of Fairfield,CT, has joined the debt capital markets divi-sion of Broadpoint Capital, Inc. as VicePresident, Bank Debt Sales. BroadpointCapital is a broker-dealer subsidiary ofBroadpoint Securities Group, Inc., an inde-pendent investment bank. Most recently,Zaino was a director in leveraged loan andhigh-yield bond sales and trading at UBS.

Robert M. Brown (BS ’04), of New York,NY, was recently married to Julie ElizabethMaguire. Brown is Associate for Mergers andAcquisitions in the New York office of CreditSuisse.

Zheng James Chen (MBA ’04), of PineBrook, NJ, has joined Morgan Joseph & Co.Inc., a New York-based investment bank thathas a growing stake in financing middle-market growth companies in China, asSenior Equity Research Analyst and SeniorVice President.

Anne-Cecilie Engell (MBA ’04), of NewYork, NY, was recently married to RobSpeyer. Engell is Marketing Director at IconixBrand Group.

Daniel J. Farr (MBA ’04), of Durham, CT,has been promoted to CFO of CBRE RealtyFinance, Inc. Farr recently served as Managerof Financial Planning and Analysis.

Maura Gedid (MBA ’04), of Astoria, NY,was recently married to Eric Kaye. Gedid isAssistant Vice President at the BreakstoneGroup, an investor relations and corporatecommunications consulting firm in NewYork.

Nidha Agrawal (PhD ’05), of Seattle, WA,has been named a Marketing ScienceInstitute Young Scholar. The MarketingScience Institute’s biennial Young ScholarProgram brings together some of the mostpromising scholars in marketing and relatedfields.

Christopher D. Rigg (MBA ’05), ofWyckoff, NJ, has joined Soleil SecuritiesCorporation, a provider of value-added, inde-pendent equity research and brokerage serv-ices, as a research analyst. Rigg will providecoverage of the healthcare facilities and serv-ices sector.

Dean Howard Schaffer (MBA ’05), ofNew York, NY, was recently married to

Rebecca Lee Glashow. Schaffer is VicePresident for Private InvestmentTransactions at PanAmerican Capital in NewYork.

Brian D. Swarth (MBA ’05), ofBrooklyn, NY, was recently married toRachel Dana Birnbaum. Swarth is SeniorDirector of Strategy and BusinessOperations at MTV Networks in New York.

Ellen Winkler (MBA ’05), of New York,NY, was recently married to Dennis Lafferty.Winkler was previously an associate atGoldman Sachs in New York where sheworked with institutional investors.

Thomas J. Curtin (BS ’06), of NewYork, NY, was recently married to ShannonLeonard. Curtin is an accountant withArcher Capital Management.

Stephanie L. Lee (MBA ’06), ofBrooklyn, NY, published a working papertitled “Auction-Rate Securities: Bidder’sRemorse?” in Pratt’s Journal of BankruptcyLaw.

Glenn S. Robertelli (MBA ’06), of NewBrunswick, NJ, was selected asEntrepreneur Magazine’s 2008 EmergingEntrpreneur of the Year for his new entre-preneurial venture, ViewGuard.

Brian Skorney (MBA ’06), of New York,NY, was recently married to CatherineMcGuinn. Skorney is an associate analyzingpublicly traded companies in the biotech-nology sector with Susquehanna FinancialGroup.

Manoj K. Thomas (PhD ’06), of Ithaca,NY, has been named a Marketing ScienceInstitute Young Scholar. The MarketingScience Institute’s biennial Young ScholarProgram brings together some of the mostpromising scholars in marketing and relatedfields.

Stefanie Lisa Dreiblatt (MBA ’07) andRobert J. Wotton (MBA ’07), of NewYork, NY, were married in July of 2008.Dreiblatt is the Senior Manager for BrandManagement at The Robert Allen Group.Wotton is Senior Financial Analyst for theconsulting and brokerage groups at CBRE.The couple met at NYU Stern.

Lindsay Monihan (MBA ’07), of NewYork, NY, and Jeffrey Stein (MBA ’07),of Saddle River, NJ, were recently married.Monihan is an associate at JPMorganChase working in the municipal bond sales

group in the securities division. Stein is anassociate at Bank of America’s investmentbank, working in structured finance in thecapital markets strategies group. The cou-ple met at NYU Stern.

Craig A. Rudner (MBA ’07), ofOssining, NY, welcomed son, JustinMichael, on June 21, 2008.

Andrea M. Scribner (MBA ’07), of NewYork, NY, was recently married to AhsimKhan. They both work for Morgan Stanley.

Ellen E. Sheets (MBA ’07), of Concord,MA, has been appointed to the position ofChief Medical Officer with PredictiveBiosciences, a molecular diagnostics com-pany developing non-invasive diagnosticproducts for cancer management. Sheetsmost recently served as Chief MedicalOfficer and SVP at Hologic Inc., a women’shealth diagnostics company.

Philip Silverman (MBA ’07), of NewYork, NY, was recently married to AnneGreenberger. Silverman is a founder andthe Managing Partner of Kingsview Group,an investment management firm.

Russell J. Weiner (MBA ’07), of NewRochelle, NY, has joined Domino’s Pizza asExecutive Vice President and CMO; he willalso serve as a member of its leadership

council. Weiner was most recently VicePresident of Marketing, Colas, for Pepsi-Cola North America.

Kimberly L. Ballard (MBA ’08), ofWashington, DC, was recently married toHarley J. McKinley. Ballard is the OperationsManager at the Louis Vuitton store in ChevyChase, MD.

Ryan D. Fiftal (MBA ’08), of New York,NY, was recently married to Nicole Brady.Fiftal is a research associate at MorganStanley.

Benjamin R. Maisel (MBA ’08), of NewYork, NY, was recently married to Susan A.Rosenthal. Maisel is Vice President in thecredit department at Morgan Stanley in NewYork.

Emily Powers (MBA ’08), of New York,NY, has been appointed Manager, BusinessDevelopment, at NBC Universal. Previously,Powers was Associate Producer for NationalGeographic.

David A. Sherman (MBA ’08), of NewYork, NY, was recently married to WendySchwan. Sherman is Vice President ofOperations in the US asset management unitof Nomura, the Japanese brokerage firm.

Jack Ogulnick (BS ’31)

Elias Karmon (BS ’32)

Frederick O. Ferrara (BS ’37)

Monroe Seifer (BS ’37)

Joseph V. Zeccola (BS ’40)

Fred Hricewich (BS ’41)

Irving M. Wells (BS ’41)

William E. Morris (BS ’42)

William Harris (BS ’49)

Bernie Brillstein (BS ’53)

Francis X. Miller (MBA ’56)

Donald R. Levy (MBA ’64)

Caroll E. Pennell II (MBA ’73)

Douglas F. Meyer (BS ’85)

David Margolis (former member of NYU Stern Board of Overseers)

In Memoriam

52 Sternbusiness

By Marilyn Harris

The $35 million ConcourseProject at NYU Stern is well underway, marking another milestone inNYU Stern’s history. As the physicaland learning environments of keyareas of the School undergo theirtransformation, now is a good timeto look back at the rather plainertrappings of an earlier era. From1921 to 1960, the home of NYU’sGraduate School of BusinessAdministration (GBA), as it wascalled, was the former TrinityChurch School building at 90 TrinityPlace, close to Wall Street.

On a pure comfort level, thoseweren’t the good old days. DeanEmeritus Abraham L. Gitlow, in hisbook New York University’s SternSchool of Business: A CentennialRetrospective, reports how formerDean John T. Madden described thepremises at Trinity Place in 1937:“A visit to the Wall Street buildingon any evening from 4:30 to 9:00pm [classes were evenings only]would reveal the paucity of the facil-ities for the work accomplished. Infact, it may be said that if the stu-dents were not convinced of thevalue of the instruction which theyreceive, there would be no otherincentive to attend.”

Professor Emeritus ErnestKurnow, who at 96 still teaches threestatistics classes each year, beganteaching at Trinity Place in 1950. Herecalled recently that faculty officeswere in the basement, with three orfour professors sharing an office anda desk: one drawer per professor.The ventilation was so poor, in thesummer, large fans would bewhirring away in the back of each

The 10-story, fully air-conditionedstructure, complete with a two-storylibrary, bookstore, and administra-tive offices, was a vast improve-ment. The expansion facilitated theSchool’s adoption of a full-timeMBA program, as well as anenhanced doctoral program.

The move uptown, in 1992,affirmed the School’s status as afull-time undergraduate and gradu-ate institution. Most important, itcreated a unified campus that bothreflected and reinforced a long-sought sense of community that washindered by separate campuses and,earlier, by the original part-timenature of GBA.

The Concourse Project renova-tions – made possible by the gener-ous support of donors, alumni, cor-porate partners, and friends –promise to bring the Stern campusin line with a reputation for leader-ship and excellence that has far out-paced its physical plant. Kurnow,for one, who’s seen it all over hiscareer, put it this way: “There’s nocomparison with the old facilities.Now we’re in heaven.” ■

MARILYN HARRIS is editor of STERNbusiness.

classroom, forcing teachers tovirtually shout their lessons.The paper-thin walls gavenew meaning to the phrase“interdisciplinary,” and thebuilding shook regularly asthe BMT subway trainspassed underneath.

Still, the adversities – andthe School’s location nearWall Street – had advantages.For faculty, said Kurnow, theclose quarters created goodmorale and engendered fertile dis-cussions and the exchange of ideasleading to meaningful research.Denizens of the basement officesincluded, among others, such aca-demic giants as Marcus Nadler andJules Bogen in finance; PeterDrucker, the management guru; W.Edward Deming, whose work inquality control played a large partin the post-war emergence of Japanas a major economic power; andHerman Kroos, an outstanding eco-nomic historian.

For its students, according toGitlow, the School was a vital, pro-ductive, and important educationalenterprise. Thousands of part-timestudents, many of whom walkedover to Trinity Place after a day’swork on Wall Street, earned theirMBAs and went on to become lead-ers of American business.

By the mid-1950s, however, theSchool realized that its successmeant it was time to move on andprovide its citizens with an environ-ment more conducive to teachingand learning, and a fundraisingcampaign was launched. In 1960,nearby Nichols Hall was christened.

PastPerformance

The original home of NYU Stern (GBA, as it was then known) – from1921 to 1960 – was the former Trinity Church School building locat-ed on Trinity Place near Wall Street.

Humble Beginnings, Rich Heritage:A Tale of Trinity Place

CONCOURSE PROJECT

JOIN US IN “BUILDING”OUR COMMUNITY

W e a r e i n t h e m i d s t o f a h i s t o r i c t r a n s f o r m a t i o n o f o u r c a m p u s b e t w e e nn o w a n d J a n u a r y 2 0 1 0 . Yo u r s u p p o r t s i g n a l s t o o u r s t u d e n t s – t h e b u s i n e s sl e a d e r s o f t o m o r r o w – y o u r l i f e l o n g c o m m i t m e n t t o o u r c o m m u n i t y .

HELP US FILL THE TORCHMake a g i f t o f $5 ,000 , $10 ,000 , o r $25 ,000 ove r t h r ee y ea r s and

you r name w i l l b e pe rmanen t l y d i sp l a yed on a Concou rse dono r

r e c o g n i t i o n w a l l . C o n t a c t A m y L e i a t 2 1 2 - 9 9 8 - 4 1 6 1 t o l e a r n m o r e .

The future Tisch lobby will open in 2010.

Funds raised to date

$35,000,000

$24,000,000