O.T. - WSJ article about high tech company secretaries with stock options.
April 21, 1999
D'Anne Schjerning Becomes Rich
As an Internet Firm's Secretary
By JOSHUA HARRIS PRAGER
Staff Reporter of THE WALL STREET JOURNAL
SAN JOSE, Calif. -- As a secretary, D'Anne Schjerning became a millionaire.
In 1994, James Clark, her boss at Silicon Graphics Inc., told her he was
leaving to start a new company called Mosaic Communications. She asked
whether she might go with him.
Mr. Clark was delighted that she was willing to take a flier on the new
enterprise. And she was his first hire. There would be no raise in pay, he told
her, just the same $53,000 she was already making, but he would throw in
10,000 stock options that would allow her to buy Mosaic shares at
half-a-penny each.
To Ms. Schjerning, who now is 58 years old, it was a meaningless gesture. "I
didn't know what a stock option was," she says. But she admired Jim Clark,
who, she says, is a smart and generous guy, and she figured that her own
income would increase in the new job.
Little did she know. On Nov. 28, 1994, Mosaic
changed its name to Netscape Communications Inc.,
and on the day of the company's initial public
offering, Ms. Schjerning made 20 years' pay. She
thus joined the small but growing ranks of millionaire
secretaries of the Internet age. (Dozens of
companies, including UUNet in Fairfax, Va.; Ascend
Communications Inc., in Alameda, Calif.; and Cisco
Systems, in San Jose, boast millionaire secretaries.)
These days she is a retired secretary, free to spend
her days golfing, driving her Dodge Durango and
watching the financial news on CNBC.
"It used to boggle me when Jim talked about millions.
For me, a $100 bill was a huge thing," she says.
Things have changed for Ms. Schjerning and others, too. The Newport Beach,
Calif., chapter of the International Association of Administrative Professionals,
a secretaries group, has brought in an accountant, Simon Pearlman, to speak
on tax planning and stock options. Secretaries "are having discussions that are
very similar to the discussions executives have," says Mr. Pearlman, who runs
a CPA firm in Irvine.
At the same time, a Silicon Valley secretarial-help firm, Palo Alto Staffing
Services, in the past year began specializing in Internet start-ups. As a result,
70% of the firm's placements are in companies that offer stock options.
Secretaries are realizing that "if you're at a traditional company, you'll do better
by joining a start-up and getting stock options," says Cathy Searby, the
company's president.
Meanwhile, help-wanted ads for secretaries, like one that ran April 11 for a
receptionist at Homestead Technologies, in Menlo Park, Calif., mention
stock-option packages even before they tout vacation days.
All this excitement may be just what is needed today on Professional
Secretaries Day. According to the Bureau of Labor Statistics, the number of
secretaries in the U.S. has plummeted to 2.8 million in 1998 from four million
in 1986.
"There's been a shortage because of the image problem," says Rick Stroud, a
spokesman for the administrative professionals association in Kansas City, Mo.
(Last year the group changed its name from Professional Secretaries
International.)
Of course, most companies' stock options never do go through the roof. A
woman interviewing in Ms. Searby's office says that three times she has
received stock-option packages from computer-software companies and three
times they have fizzled.
Ms. Schjerning, one of the lucky ones, still doesn't want to be compared to a
lotto winner. "I earned every penny of it," says Ms. Schjerning. "Believe me."
Indeed, even before Ms. Schjerning understood what options were, she knew
that the job she took with Mosaic was a grind. She put in 14-hour and 16-hour
days, working alongside Mr. Clark, engineer Bill Foss and Netscape
co-founder Mark Andreessen. There was a decided lack of creature comforts.
For two months, before Netscape got its office, she had to work at Mr.
Clark's home using a TV tray as her desk.
Soon, Ms. Schjerning came to be known as "Netscape Mom" -- and she put
the title on her business card. It was apt. She did all the things secretaries do --
managing Mr. Clark's schedule, fending off people who wanted too much of
his time -- but she also bought dinners, straightened ties, brushed dandruff off
shoulders, scrubbed toilets and cleaned the office. "I'd find old pieces of
hamburger and pizza," she says. "They were like little kids, you know."
Says Mr. Clark: "She was kind of like a dorm mother in the early days. I think
she actually did their laundry occasionally."
A Mobile Home
When she started at Netscape, Ms. Schjerning's own home was in a trailer
park in San Jose where she had moved in order to care for her aging parents.
"I would go home from work and be absolutely exhausted and then go in and
check on them," she says. Despite the hardships, Ms. Schjerning made her
mark on the company. "Without D'Anne, there would be no Netscape," says
Mr. Foss.
On Aug. 8, 1995, the company's shares opened in New York Stock Exchange
trading at $28 and quickly jumped above $70. And despite a caution from
Netscape's then-CEO Jim Barksdale to ignore the stock price, employees were
riveted. As an executive secretary, "I had to act restrained," says Ms.
Schjerning. "But it was difficult." A fellow worker had come in with an
electronic stock ticker and had put it on her desk.
Netscape's stock closed its first trading day at $54. D'Anne Schjerning, still
living in the trailer park, was worth $1.08 million.
'The Nicest Car'
Ms. Schjerning started selling shares in December 1995 and over the next three
years, she sold all of her stock for a total of $1.2 million, to "better my life,"
she says. (The thrice-divorced Ms. Schjerning also gave 4,000 options -- 20%
of her holdings -- to her sons, now 36 and 38 years old.) With the proceeds,
she treated herself to frequent massages, trips to Mexico, season tickets to the
San Jose Sharks hockey team and a white Cadillac. "I had the nicest car in the
whole mobile park," she says.
After she retired in 1997, Ms. Schjerning paid $365,000 for a townhouse in a
wealthy retirement community outside San Jose. On a Monday morning early
this month, Ms. Schjerning's phone rings, interrupting her concentration on the
stock ticker running along the base of her television. "I know!" she squeals to
her friend on the other line, a secretary at America Online Inc., which had just
acquired Netscape. "AOL was at 170!" (Ms. Schjerning still has some AOL
stock she bought for what she calls her "play account.")
Does Ms. Schjerning know how to set up a charitable trust for tax purposes?
asks the secretary, Jane Hoelker. Ms. Schjerning urges her to talk to an
accountant.
As she hangs up the phone, Ms. Schjerning remarks: "I never thought I'd be
asked these questions. These are things I had never heard of before."
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