Bid/ask: Cam­pari adds Grand Marnier to its mix; a bid from China threat­ens Mar­riott’s Star­wood deal

Cam­pari mixes with Grand Marnier.

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other forms of spend­ing. By us­ing the do­nated MLPS, the school was able to shift some of the risk of guar­an­teed com­pen­sa­tion onto the coaches, says Chad Chat­los, a prin­ci­pal in the sports prac­tice of ex­ec­u­tive search firm Korn Ferry. In ex­change, the coaches had a chance at a big­ger re­ward. “Un­for­tu­nately in this case, it hasn’t worked out for the coaches,” Chat­los says. Miller, Ro­driguez, and Byrne were un­avail­able to com­ment on the bonus struc­ture, ac­cord­ing to Ari­zona ath­let­ics spokesman Jeremy Sharpe.

In the­ory, the deal could have been a win­ner for both sides. Ari­zona was in a po­si­tion to keep the dis­tri­bu­tions the MLPS paid over the course of the coaches’ tenures and was also giv­ing them an in­cen­tive to re­main in Tuc­son. If they stayed, the coaches could look for­ward to a big pay­day at the end of their con­tracts. Ro­driguez’s name was floated for a num­ber of jobs last year, in­clud­ing some with higher salaries. He chose to stay put.

Sev­eral Divi­sion I ath­letic di­rec­tors say they had never heard of such a bonus struc­ture. Or if they had, they say they wouldn’t con­sider it for their own coaches. “In the world of higher education, many out­side-the-box ideas need very close scru­tiny,” said Bill Bat­tle, ath­letic di­rec­tor at the Univer­sity of Alabama, in an e-mail.

In the orig­i­nal Ari­zona deal, the MLP shares were set to be con­verted to cash and paid out only if the three men were still em­ployed by the univer­sity at the end of March 2022. One year into the agree­ment, they all signed new deals that, among other things, changed the pay­out sched­ule. Byrne and Miller will get their fi­nal pay­outs two years ear­lier, in 2020. Un­der his con­tract, Ro­driguez will re­ceive his bonus in frag­ments, start­ing with 25 per­cent this month.

The ul­ti­mate value of the bonuses will be de­ter­mined over the next four years. Should oil re­bound, there’s time for all three to make back the lost amount and then some. But there’s also the pos­si­bil­ity the pay­outs will be­come even smaller. �Eben NovyWil­liams and Bran­don Kochkodin

The bot­tom line Big-time col­lege coaches are ex­pen­sive, so Ari­zona got cre­ative by pay­ing them with do­nated en­ergy-com­pany shares.

Edited by Pat Regnier Bloomberg.com

Paypal co-founder Peter Thiel said MBAS are pre­dis­posed to “herd­like think­ing and be­hav­ior.” Ven­ture cap­i­tal­ist Marc An­dreessen dubbed them a con­trar­ian in­di­ca­tor, say­ing “if they want to go into tech, that means a bub­ble is form­ing.” In a post on the ques­tion-and-an­swer web­site Quora, Face­book Chief Op­er­at­ing Of­fi­cer Sh­eryl Sand­berg, who earned an MBA from Har­vard in 1995, said that while she got “great value” from her ex­pe­ri­ence, she wasn’t ready to rec­om­mend the de­gree to the coun­try’s fu­ture tech stars. “MBAS are not nec­es­sary at Face­book and I don’t be­lieve they are im­por­tant for work­ing in the tech in­dus­try,” Sand­berg wrote.

Sil­i­con Val­ley’s trash talk­ing of the MBA ob­scures the re­al­ity that U. S. tech com­pa­nies are hir­ing B-school grads in ever-larger num­bers. Busi­ness schools sent 16 per­cent of their 2015 grad­u­ates into tech­nol­ogy jobs, ac­cord­ing to a Bloomberg Busi­ness­week sur­vey of stu­dents who’d ac­cepted of­fers by that spring, mak­ing it the No. 3 in­dus­try for MBA grads af­ter fi­nance and con­sult­ing.

By one mea­sure, Sil­i­con Val­ley val­ues MBAS more than Wall Street does. In 2015 tech com­pa­nies paid busi­ness school grad­u­ates more than fi­nan­cial com­pa­nies did, ac­cord­ing to Busi­ness­week’s poll of more than 9,000 MBAS. “If I said all peo­ple with a law de­gree are worth­less, what would you say?” says Rich Lyons, dean at the Univer­sity of Cal­i­for­nia at Berke­ley’s Haas School of Busi­ness. Fortythree per­cent of its 2015 class went into tech, ac­cord­ing to the sur­vey. “It’s such an un­war­ranted gen­er­al­iza­tion. Firms wouldn’t keep com­ing back to hire our MBAS if it wasn’t a valu­able skill set.”

Ama­zon.com, Mi­crosoft, Google, and IBM were among the 15 com­pa­nies that hired the most MBAS in 2015, ac­cord­ing to data re­ported by 103 busi­ness schools schhools to Busi­ness­week, prroof proof that while the founders and chiefs of some of the top U. S. tech com­pa­nies may see them­selves as rene­gades, they’re not above hir­ing trained man­agers to carry out their vi­sion.

While a de­gree in com­puter sci­ence—or the lack of any de­gree at all—may con­fer a high mark of dis­tinc­tion, the Val­ley’s C-suites are packed with MBAS. Twenty-four of 67 com­pa­nies in the S&P 500’s In­for­ma­tion Tech­nol­ogy Sec­tor In­dex are led by chief ex­ec­u­tives with MBAS or equiv­a­lent de­grees. Among those CEOS are Ap­ple’s Tim Cook (Duke’s Fuqua School of Busi­ness) and Mi­crosoft’s Satya Nadella (Chicago’s Booth School of Busi­ness).

In the eyes of Keith Rabois, an in­vest­ment part­ner at the VC firm Khosla Ven­tures, the pres­ence of MBAS at a tech com­pany is a sign the busi­ness is ma­ture, maybe even over the hill. “They tend to get hired af­ter the com­pany is al­ready suc­cess­ful and it be­comes a very bu­reau­cratic or­ga­ni­za­tion,” says Rabois, an early em­ployee at Paypal who later founded the real es­tate startup Opendoor. “They will prob­a­bly keep you out of trou­ble, but they won’t cre­ate any value.”

The idea that MBAS don’t be­long at star­tups has be­come a Val­ley meme. Guy Kawasaki, a one­time Ap­ple em­ployee turned ven­ture cap­i­tal­ist, once quipped that in valu­ing a young com­pany, he adds $500,000 for ev­ery en­gi­neer on staff and sub­tracts $250,000 for ev­ery MBA. Kawasaki has an MBA from UCLA.

“I don’t buy into the ar­gu­ment that en­trepreneurs don’t need an MBA,” says Sri Za­heer, dean of the Univer­sity of Min­nesota’s Carl­son School of Man­age­ment. “If they were a lit­tle more clued up about how to make money in their busi­nesses, we wouldn’t see th­ese tech bub­bles and the crazi­ness that hap­pens ev­ery few years.”

Twenty-four per­cent of 157 star­tup­sups ups val­ued aatat $1 bil­lion or more— fre­quently re­ferred ree­ferred to as uni­corns—were foundedd by MBAS, ac­cord­ing to a re­centt study pub­lished by David Fairb Fair­bank,bank, a stu­dent at Har­vard Busin Busi­ness ness School. They in­clude eyeg eye­glass­glass re­tailer Warby Park­erPar rker (all four founders atte at­tend­e­dended the Whar­ton School), me med­i­cal ed­i­cal direc­tory Zoc­doc (Ccolumbia (Columbia Busi­ness School), an andnd health in­surer Os­car (HBS). “A uni­corn is not nec­es­sar­ily the end-all mea­sure of long-term suc­cess­ful com­pa­nies, but it’s a pretty good met­ric for think­ing big,” says Fair­bank.

Busi­ness schools worry the MBAbash­ing may dis­cour­age po­ten­tial ap­pli­cants. The de­gree ap­pears to be los­ing some of its pop­u­lar­ity, with en­roll­ment down 11 per­cent since 2009, ac­cord­ing to a sur­vey of 265 In­ter­na­tional,busi­ness b usi­ness school­san ac­cred­itby AACSB ing or­ga­ni­za­tion. “When you used to think about good busi­ness lead­ers, you would think about a Jack Welch. Now you think of Zucker­berg, and that’s a re­ally dif­fer­ent as­so­ci­a­tion with grad­u­ate schools of busi­ness,” says Amy Hill­man, the dean at Ari­zona State Univer­sity’s W.P. Carey School of Busi­ness, where 43 per­cent of 2015 grads went into tech­nol­ogy.

Hill­man says B-school grads will find even more op­por­tu­ni­ties at tech­nol­ogy com­pa­nies as in­vestors be­come more dis­cern­ing about the types of skills re­quired to turn a good idea into a thriv­ing busi­ness. “It used to be more risk-tak­ers,” she says. “To­day it’s a group of very so­phis­ti­cated fun­ders who are look­ing for very so­phis­ti­cated busi­ness ideas.” �Natalie Kitroeff and Pa­trick Clark

ur

MBA, Duke

MBA, Har­vard MBA, Univer­sity of Chicago

Al­most one-fifth of B-school grad­u­ates in 2015 went into tech jobs, mak­ing the in­dus­try the No. 3 em­ployer of MBAS.

ac­cord­ing to fig­ures com­piled by AACSB In­ter­na­tional, an or­ga­ni­za­tion that ac­cred­its B-schools world­wide. “There’s a frus­tra­tion on the part of a lot of women, and prob­a­bly men, too, that we haven’t made more progress,” says Amy Hill­man, the dean at Ari­zona State Univer­sity’s W.P. Carey School of Busi­ness.

In Au­gust the White House con­vened 150 lead­ers from top busi­ness schools and had them sign a pledge to take steps to boost fe­male en­roll­ment by cul­ti­vat­ing po­ten­tial ap­pli­cants early on in their education and by of­fer­ing more fi­nan­cial aid. “When busi­ness schools are miss­ing out on a large share of fe­male col­lege grad­u­ates, they are miss­ing out on an ex­tremely large share of the top qual­i­fied col­lege grad­u­ates,” says Bet­sey Steven­son, a Univer­sity of Michi­gan econ­o­mist who served on Pres­i­dent Obama’s Coun­cil of Eco­nomic Ad­vis­ers and helped lead the Au­gust sum­mit. “If they want to con­tinue to be a rel­e­vant part of the train­ing in the 21st cen­tury, they are go­ing to have to make changes that will make them more at­trac­tive to women.”

Deans say busi­ness schools suf­fer from a unique tim­ing prob­lem. Un­like law and med­i­cal schools, which tend to en­roll stu­dents soon af­ter they fin­ish col­lege, the full-time MBA pro­gram is de­signed for peo­ple who’ve al­ready proved them­selves pro­fes­sion­ally. Elite B-schools typ­i­cally pre­fer that ap­pli­cants have about five years of work ex­pe­ri­ence, which means the av­er­age MBA stu­dent is 30 years old at grad­u­a­tion, Bloomberg data show. Women in their late 20s who think they’ll want to have chil­dren at some point may feel they’d do bet­ter rack­ing up ca­reer ex­pe­ri­ence than tak­ing two years off for busi­ness school. “You’ve got some prime child­bear­ing years and prime ca­reer tra­jec­tory years, and I think we are see­ing women who are not will­ing to come out of [the work­force],” says Ari­zona State’s Hill­man.

There’s ev­i­dence that low­er­ing the work ex­pe­ri­ence re­quire­ment for ap­pli­cants helps make classes more fe­male. Ge­orge Wash­ing­ton Univer­sity School of Busi­ness man­dates a min­i­mum of two years, and 41 per­cent of its MBA stu­dents are women. Also, the same share of women and men en­roll in spe­cial­ized busi­ness mas­ter’s pro­grams, such as ac­count­ing and mar­ket­ing, which of­ten don’t re­quire any on-the-job ex­pe­ri­ence, ac­cord­ing to AACSB.

“If we de­cide to let women go straight through [to busi­ness school af­ter col­lege] and lower that bar, there’s no ques­tion that we would get more women in,” says Sarah Fisher Gar­dial, dean at the Univer­sity of Iowa’s Tip­pie Col­lege of Busi­ness. But at what cost? She and some other deans ar­gue that award­ing the de­gree to younger stu­dents would make it less valu­able. Stu­dents, they say, learn more when ev­ery­one in the class­room brings his or her work his­tory to bear. Says Fisher Gar­dial: “You re­ally are set­ting up a richer ed­u­ca­tional process, be­cause the par­tic­i­pants learn more from their fel­low class­mates.”

Women may also have trou­ble see­ing them­selves at busi­ness school be­cause the classes are over­whelm­ingly led by male pro­fes­sors. The pledge signed by the 47 schools in Au­gust also com­mit­ted them to try to boost the num­ber of women in­struc­tors. Bhagwan Chowdhry, a fi­nance pro­fes­sor at the Univer­sity of Cal­i­for­nia at Los An­ge­les’s An­der­son School of Busi­ness, has ar­gued that be­cause of the lim­ited num­ber of women Ph.d.s in eco­nom­ics fields, a man­date to hire more women pro­fes­sors at busi­ness schools could end up low­er­ing the cal­iber of fac­ulty. An­der­son’s dean, Judy Olian, who says she’s made hir­ing women pro­fes­sors a pri­or­ity, coun­ters: “If any­thing, our stan­dards have risen.”

To tempt women to take time out from their ca­reers to pur­sue an MBA,

Per­cent­age of women en­rolled, 2014-15

Law school The re­quired five

years of work ex­pe­ri­ence may de­ter women who want to ad­vance in their field be­fore hav­ing chil­dren

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