Roger’s back-to-the-future moment. It wasn’t just Marty McFly who made a career out of his back-to-the-future moment. Roger Corbett, the former CEO of Woolies and chair of Fairfax Media, is in the midst of a sequel himself right now. After running Woolies from 1999 to 2006 (and then chairing Fairfax from 2009 till this year), Corbett is returning to his alma mater for his second stint as a consultant. For five years from his retirement as CEO in 2006, Corbett was paid $600,000 a year by Woolies to be a consultant to the board. That was $3 million, after Corbett had departed Woolies with a package and shares that were worth around $50 million or more. The five-year deal was to prevent another retailer stealing him (Corbett’s predecessor, Reg Clairs, went off to join the David Jones board.
Corbett's return to Woolies was announced yesterday by new chair Gordon Cairns. During Corbett's consultancy, under CEO Michael Luscombe, the retailer pushed for profit over low prices. The board then chose Grant O’Brien to replace Luscombe and also decided to move the company into hardware with a joint venture with US giant Lowes Cos. That was called Masters. Several small takeovers built a presence in the trade side of the sector, and Masters proceeded to be an ever-growing black hole for Woolies and eventually claimed O’Brien, chair Ralph Waters and a couple of other directors and senior managers. At the same time management and board lost control of the company’s Big W department store chain as sales went backwards (and rival Kmart, owned by Coles, powered ahead by selling product at low prices). The hope is that Corbett can save Woolies from itself. -- Glenn Dyer
And speaking of back-to-the-future moments. Is there a drug for financial pain mismanagement? Novartis AG, the big Swiss drug maker, has just had a settlement with the US Justice Department concerning rebates it paid to specialty pharmacies that turned out to be very naughty indeed. The company has also had two other recent brushes with US regulators (and several with regulators in Europe over separate cases) that have cost it a lot of money. In October, the Basel-based company said it had agreed to pay US$390 million (more than A$540 million) as part of a settlement regarding claims that it paid kickbacks in the form of rebates to boost prescriptions for Novartis drugs. That settlement related to a June court filing by the Justice Department, based on earlier whistleblower allegations from a former sales manager involving a drug called Exjade, which is an iron-reduction treatment for patients undergoing blood transfusions, and a second called Myfortic, a drug used by kidney transplant patients. Novartis says it is still settling cases with various US state governments -- so more financial pain ahead?