MANAGEMENT: The Montgomery Hour

When stockholders filed into R. H. Macy & Co.’s annual meeting in Manhattan last week, they spotted a new, but familiar face on the board: Actor Robert Montgomery, who was elected to Macy’s board last September. In no time at all, Bob Montgomery found himself playing a big scene in which he was cast as the villain. What, demanded heckling stockholders, was he doing there anyway?

Replied Montgomery: “I’ve been in the business and professional field for 30 years. Whatever my talents are, they are at Macy’s service.” To which a lady replied dryly from the floor: “Thank you, Mr. Montgomery. I see you still have the gift of gab.” Then, Lewis D. Gilbert, who owns stock in 600-odd corporations, including twelve shares in Macy’s, and makes an avocation of harassing corporate boards, threw a question at President Jack I. Straus: “What does Mr. Montgomery know about merchandising?” Straus tried to defend Montgomery’s qualifications as a director. After all, he said, several of the other directors had not known much about retailing when they had joined the board. Snorted Gilbert: “Maybe that’s what’s wrong with Macy’s.”

Galled by a cutback in their dividends from 50¢ to 40¢ a share, the stockholders turned on Straus. Macy’s sales had slipped 5-5% in the year just ended; earnings had tumbled from $2.51 a share to only 98¢. Except for the $2,800,000 realized on the sale of station WOR, Macy’s profits would have hit their lowest point since 1942. Jack Straus said that Macy’s showing was caused by unusual circumstances: 1) losses during the Macy-Gimbels price war last year, 2) the high cost of installing TV sets, and 3) big inventories held in expectation of shortages that hadn’t come. However, things were already getting better. In the last three months, Macy’s profits were “substantially greater,” and Macy’s hoped to get a refund of some $6,000,000 from the Government for overpaid taxes. Another stockholder complained that Macy’s real trouble was “Harvarditis—too many Harvard men.”* Straus might well look over his staff with an eye to “housecleaning.” Added Heckler Gilbert: “If there is another cut in the dividend, the stockholders have the right to ask that Macy’s executives take a cut in salaries themselves.”

*Of the twelve men on Macy’s board, seven are Harvard men; one is a graduate of Northwestern, one of Columbia, one of the College of the City of New York, and one of the Cutler School. Actor Montgomery was educated at the Pawling (N.Y.) School.