Once Flamboyant, Ex-RJR Boss Now a Low-Key Executive With BC-RJR Nabisco
Oct. 30, 1989
ATLANTA (AP) _ A year after starting and losing the fight over RJR Nabisco Inc., F. Ross Johnson has all but disappeared from public view. But he lacks neither money nor activity.
In the aftermath of the $24.53 billion battle for the food and tobacco giant, the Johnson era is a memory at RJR Nabisco. Acquaintances and associates say it's also history to the man who a year ago was president and chief executive of the company.
RJR Nabisco, now owned by the investment firm Kohlberg Kravis Roberts & Co., has moved its headquarters from suburban Atlanta to midtown Manhattan and is headed by former American Express Co. president Louis Gerstner.
The once flamboyant Johnson, 57, meanwhile, is the low-key chairman of RJM Group, an Atlanta-based international management advisory company organized in February when Johnson resigned from RJR Nabisco.
He took a fair amount of money with him when he left. Johnson, who earned a $1.8 million salary in his final year with RJR Nabisco, received $7.2 million in continued pay to see him through 1991, when he will be eligible for retirement benefits.
His ''golden parachute'' included nearly $2 million to help Johnson pay his taxes. He also received $19.2 million worth of RJR Nabisco stock.
Johnson would have been even wealthier had his bid for the company prevailed. He said during the height of the RJR Nabisco fight that, if successful, he could expect to make $100 million in seven or eight years.
''But making $100 million was not my motive by any stretch of the imagination,'' he said then.
Nonetheless, Johnson was seen as pursuing a buyout purely for his own greed. He was criticized for his initial low $17 billion bid and his own built-in rewards in the offer.
His plans to sell off all of the company's non-tobacco businesses and disregard of RJR Nabisco employees also rankled many people - including the firm's board of directors - and although his $25.2 billion final bid was higher than the Kohlberg Kravis offer, it wasn't enough to win.
The record size of the RJR Nabisco deal also brought unprecedented public attention to the phenomenon of leveraged buyouts, takeovers largely accomplished through the use of borrowed funds.
After Kohlberg Kravis' victory in early December, Johnson issued a statement wishing the new owners good luck and maintaining that his initiation of the takeover process benefited the company's stockholders. He has offered no further public post-mortems.
''I think he's put that in the past,'' said William Liss, an Atlanta consultant who was a senior vice president at RJR Nabisco under Johnson.
Liss said he understood that Johnson has discussed the takeover battle with several authors in an effort to ensure that books about the deal are accurate. Joel Koblentz, a partner at Egon Zehnder International Inc., an Atlanta executive search firm that has dealt with several former RJR Nabisco employees, said Johnson sits on eight or nine corporate boards and also has been exploring various investment opportunities.
Johnson has stepped out of the public spotlight by his own choice, Koblentz said.
''He's picking and choosing his activities,'' Koblentz said. ''He has a number of interests, both social and business, and a number of homes.''
Koblentz said Johnson's low-key nature is quite in contrast to the style he practiced as RJR Nabisco's CEO.
''We haven't seen him on the restaurant and party circuit as much as he used to be,'' Koblentz said. ''He used to be very visible.''
Adv for Sunday Oct. 29