We broke the news yesterday that Move, Inc. CEO, Steve Berkowitz would be replaced with a News Corp insider, Ryan O’Hara after ushering in a nearly $1B aquisition by a major media player. O’Hara takes the reigns on January 5, 2015, which Berkowitz says gives the industry time over the holidays to digest.
The biggest questions are about timing, what’s next for Berkowitz, and how big was the severance package?
Why name a new CEO before the holidays?
First, News Corp and Move, Inc. have barely been together for a month, and they’re already making changes at the top level, which Berkowitz said he “always knew was a possiblity,” and is a “natural event,” likening it to a new owner buying a baseball team and bringing in new blood. What is his next move? He says he doesn’t know, but he’d like to serve on some boards given his deep industry insight and the political situations he’s endured (our word, not his).
So why now? Berkowitz says “News Corp wants to run quickly, they want to make the company number one, and I agree with that,” later noting that “Speed is important. This gives everyone the holidays to get used to the idea.” All staff learned of the change of power the moment we did yesterday.
Has Zillow made him an offer after attracting some of his own top talent this year? He chuckled and said, “no, they have not.”
What’s next for Berkowitz?
This isn’t the first time Berkowitz has been in this spot, in fact, as a CEO, he took AskJeeves from a company with a $40M cap, and turned it around quickly to sell for $2B. He remained CEO for a year after the acquisition, but there was an eventual change of power. He’s done the same at Move, Inc. which had a $250M market cap, selling just short of one billion dollars.
With Move, he says he committed to a goal and has met his goals for Move, Inc. and from day one was “willing to do what News Corp. needed” of him. He calls this a “sad but proud” moment in his life, sad to leave behind his many employees, but proud to have accomplished so much.
Berkowitz notes he loves this industry but isn’t convinced he’ll stay in real estate. That said, he does have a unique perspective that others could benefit from, but he says it won’t be his competitors. “If anybody could gain the most from my perspective, it’s actually the industry itself. If you ask me who i could give the best counsel to, it wouldn’t be my competitors, it would be the brokers, MLSs, people in the industry.”
He’s one of those rare execs who wants to work for a board of directors and balance investors, constituencies, and team development.
What does Berkowitz’ severance package look like?
Many readers asked us about Berkowitz’ compensation, with many not aware that in publicly traded companies, severance packages are determined upon hire and made public.
According to a U.S. Securities and Exchange Commission filing, Berkowitz’ “Severance Agreement” is as follows:
- He shall receive all salary and benefits earned through the end of the transition period which will last 90 days.
- He shall receive an amount equal to the sum of (i) 12 months of his then current annual base salary and (ii) 100% of the target bonus that would otherwise be payable for the fiscal year in which his termination occurs (whether or not he has satisfied the applicable performance objectives), payable in 12 equal monthly installments.
- Effective January 5, 2015, 100% of all of his outstanding stock options, restricted stock and performance-based restricted stock units shall vest and all of the outstanding options shall remain exercisable for a period ending on the earlier of (i) three years following a transition period or three years following termination if the Company does not request a transition period or (ii) the normal expiration of the options.
- Move will pay all of the COBRA premiums for the same or reasonably similar medical coverage that Mr. Berkowitz and his dependents had, for a period not to exceed the earlier of 18 months or until he becomes eligible for coverage at a new employer.
The legacy Berkowitz leaves behind
There are three parts of any leader’s legacy – their perception of their legacy, others’ perception of their legacy, and history’s perception of their legacy.
Berkowitz is proud of his legacy and says that instead of “we’ll miss you” notes and calls, he’s getting “you’ve earned this” notes and “you’ve done great things” calls from staff and industry insiders, which makes him extremely “proud” of what he and his team have done. And in a very rare move, he got dozens of notes from investors thanking and congratulating him when Move was acquired.
He has consistently led from behind the scenes (“I don’t have a need to be center stage”), empowering his team to be out front, making decisions. His sweet spot is building, and he tells us, “I love building a company, I love building the culture.”
“When I look at myself and think about what I’ve accomplished, I try to be realistic about it and try to see what other see. For me, it’s always about putting the right people out there,” Berkowitz tells us, adding “I’m so proud of the culture I’ve built here.”
Berkowitz is not without critics, in fact, he’s earned a few enemies during his time at Move. Recently, Move lost some top talent in a controversial talent grab by Zillow, following a tough product launch and immediate death (AgentMatch) which was even more controversial. During his tenure, he has been referred to as tone deaf, and unwilling to change.
When asked about what we’re calling the “dark times,” Berkowitz said, “I believe everything works out for the best. I don’t consider them dark times. I consider them events that made the company better at the end of the day. The company today as a leadership team is more connected, sounder than it’s ever been. Our relationship with the industry has never been stronger.”
He says his top regret is that he needed to push the industry conversation earlier. “From internal execution and from an industry partnership perspective, we needed to move faster. It was a battle. The outcome is great, but if I could push back two years, I’d like this to be year five, not year six. We gave our competitors a little too much runway, but we had lots of things to clean up.”
During his tenure, he did work with NAR to loosen their operating agreement, so many hands that were once tied behind backs have been loosened, paving the path for a more successful realtor.com, even if under different leadership.
Berkowitz concluded, “Yesterday was an extremely positive day, not because of the announcement, but because of the feedback I got from the people (not ‘I wish you well,’ but heartfelt ‘thank yous’). I talked to over 30 people, meet with people down in the trenches, and that’s the feedback I got – ‘you understand what I did, made my job better, taught me,’ and that’s the role of the CEO.”