Guessing game continues on new USF&G chairman

November 16, 1990|By Peter H. Frank

The votes are in. The "First, Non-Annual (Hopefully!) -- Guess the Next USF&G CEO Contest" is over. The winner?

Well, no one knows for now. No one, that is, except the directors of USF&G Corp. and the next chairman and chief executive of the large Baltimore-based insurance company.

Smith Barney, Harris Upham & Co. analyst G. Alan Zimmermann in New York began the "Guess the Next USF&G CEO Contest." The prize for naming longtime leader Jack Moseley's successor is a dinner for two or "any other form of evening entertainment you can sell us on."

Mr. Zimmermann declined to comment on his contest, which ended yesterday, or to disclose the leading vote-getter.

Despite the tongue-in-cheek contest, no one fails to recognize the size of the stakes.

When USF&G announced cuts in its dividend and work force last week, it also said Mr. Moseley was stepping down. The company said it had selected Mr. Moseley's replacement and that the new leader was "an executive of national stature," but that his name would not be disclosed for a few weeks.

Analysts considered the delay in announcing the replacement somewhere between "unusual" and "baffling." USF&G spokeswoman Kerrie Burch-DeLuca said it had to do with "protocol," generally thought to mean that the new executive had to notify his company first.

"It leaves an uncertainty there," said W. Dolson Smith, an analyst with Firemark Insurance Research. "But then again, I guess they wantedto admit to the serious nature of the dividend cut and that there were steps in progress to correct things."

One analyst, who declined to be named for fear of harming his relationship with the company, said that just the name and resume of the replacement could swing the price of the stock up or down by 20 percent. That would come to nearly $2 a share based on USF&G's closing price of $10.375 a share yesterday, a 52-week low.

The rumored choices for a replacement seem virtually endless. In recent days, an unnamed financial-services executive from the Midwest who it was said would Dec. 15 -- despite it being a Saturday -- has been the leading candidate. But that's just the latest in a string of "favorites."

The early leader had been John J. Byrne, chairman and chief executive of Greenwich, Conn.-based Fire man's Fund Corp. That quickly fizzled, however, when, two days after the USF&G announcement, Fireman's said that Mr. Byrne "firmly denied he is the possible successor" and that "there is absolutely no truth to the rumor that Jack will succeed Mosely [sic]."

Another well-rumored candidate dropped off the list later when James J. Meenaghan, chairman, president and chief executive of VTC the Home Insurance Co., let it be known it wasn't him.

"We can deny that without reservation," said Robert L. Woodrum, senior vice president of AmBase Corp., Home Insurance's parent company. "It's one of those things that's kind of hard to knock down, but no, it's not us."

Still, the rumors continue -- apparently picking up at least two names for each one that drops off.

Though analysts and investors might be curious, few are likely to be more interested than the company's 11,800 employees -- 3,000 of whom work in the Baltimore area.

In announcing Mr. Moseley's retirement, USF&G also said it would be cutting its work force to save $75 million a year. The new chairman is expected to determine when the cuts will occur and who will be affected.

As a result, some of the more active rumors are occurring within the company's walls.

"We don't want rumors to speak for the company, and right now we don't have much information to share with them," said Ms. Burch-DeLuca, who has sent out two employee newsletters to help quell the stories. "It's of great concern to us -- and that's putting it mildly."

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