LI DALLIES AS PACIFIC PARTNERS GROW RESTIVE
2001-05-30
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NO MATTER how hard he tries, Richard Li can't get good press. His star has set and it will take a miracle better than the raising of Lazarus to restore his name to the firmament. That is why, as discussed on these pages last month, senior executives in his company Pacific Century CyberWorks (PCCW) want him to fade into the background.
Ten days ago, Li admitted that he is looking for a chief executive officer to take over daily running of the company while he retains the title of chairman. Unfortunately, the admission came with a caveat: he can't bring himself to specify when this person will start except to say that it is likely to be after the 2001 results are announced in the first quarter next year.
This is going to be the longest executive search in history, and he complicated the issue further last week by saying he'd prefer to promote from within. If he does, then the whole point of injecting professional talent unconnected with Richard Li is defeated.
What PCCW needs is someone like BA's Rod Eddington or that man who came in and turned around Alcan in the US. What's more, the job is big enough to attract the finest talent on offer as long as Richard and the Li family, headed by his father KS, stay at arm's length. Some would say there's not a snowball's chance in hell that that will happen.
At the annual general meeting of disgruntled shareholders on Friday, Richard Li talked about spending his own cash to attract the right talent. "If it is necessary, I will consider paying them out of my own pocket," he said. Don't doubt his sincerity because he did this three weeks ago when he gifted Fred Ma, a former banker with JP Morgan, HK$ 20m (GBP 1.8m) worth of his personal stash of PCCW shares to induce Ma to sign on as yet another executive director.
But this is flawed generosity. Li is better off taking the example of his cybermate Jerry Yang at Yahoo, who surprised the market when he employed Terry Semel as his new chief. Semel, the former Warner Bros boss and a very rich man, is receiving a salary of $ 300,000 a year and a whopping share option deal that only means something if the share price makes a big recovery. PCCW stock has plunged 85% from a high of HK$ 28 to HK$ 2.70 in just over a year, so there is plenty of room for improvement - but, unfortunately, not with Li as the boss.
Even his business partners are fed up with his "shoot-from-the-hip-and-think-later" approach. At the AGM, he announced that the regional mobile phone joint venture set up by PCCW and Telstra planned to bid for a stake in Singapore's MobileOne. Telstra had carefully avoided committing itself and stuck with no comment. Li's admission, however, was yesterday's headlines, to the horror of the unusually discreet Aussie telecom.
Within the executive director-heavy ranks of PCCW, there is also rumoured to be discontent. People who should know say Alex Arena, the regulatory boffin who has been at PCCW for two years, would like to go. So would David Prince, the former chief financial officer of C&W HKT, who was taken into the PCCW fold last year after the deal was done. It's worth noting that it's probably tough to work in this town again if you cross a Li. Anyway, neither wants to abandon Richard and the company, brutally. It's not either man's style and, after all, Richard had the vision thing about the internet when everyone else in Hong Kong thought it was only useful to find a date in some chat room.
Richard Li can talk about succession and the fact that the HKT takeover has made PCCW "a growth company, not a divided company" as much as he likes, but the real decision about what will happen may be taken across town on the top floor of the Cheung Kong Centre, where KS Li has his office. Many of Richard Li's minority shareholders would prefer this - they have been disappointed that the colt has not shown the form or staying power of his sire. Ironically, Richard's bankers might be thinking exactly the same thing.
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