S P R I N G / S U M M E R 2 0 1 0

Kevin Parker Invests in Clean Energy ■ Deloi t te Post-Recession ■ Remembering Marcus Nadler■ Federal ly Regulated Insurance? ■ Sl ic ing and Dic ing In ternet Data ■ The Renovated Concourse

t h e A l u m n i M a g a z i n e o f N Y U S t e r n

STERNbusinessMEETSTERN’SNEW DEANPeter Henry is ready to lead the School into the 21st century

a l e t t e r f r o m t h e deanIt is a pleasure to be a

part of the Stern communi-ty and to write to you in thealumni magazine for thefirst time as your new dean.

Our economy has gone along way toward rightingitself over the past severalmonths, and despite vestigi-

al sputtering in some sectors and lagging employ-ment, there is a sense that business is re-energizedand perhaps even ready to invest and grow. At NYUStern, we have never stopped investing and growing,the most visible sign of which is the ConcourseProject. Your support has resulted in the most sig-nificant transformation of our physical space sincethe School moved to Washington Square in 1988(page 16). In particular, we are grateful to JohnPaulson (BS ’78), whose leadership gift supports thisfacilities renovation, as well as two faculty chairsand scholarship aid for students (page 20). I hopeyou will make it a point to visit and see this wonder-ful space for yourself next time you are in New York– and consider attending or participating in one ofour many events, panels, and speaker series whileyou’re here.

Our growth isn’t just with bricks and mortar. Wecontinue with added fervor to build the strength anddiversity of our academic bench. Joining the facultyin September is Nobel Laureate A. Michael Spence,whose scholarship focuses on economics in emergingmarkets and the economics of information (page28). And while we’re known to be leaders in thefinance area, what is less well known is the depth ofour expertise in other fields. In just one of manyexamples, our information, operations, and manage-ment sciences department won three prestigiousNational Science Foundation grants and two highlyselective Google & WPP Marketing ResearchAwards. Take a look at the valuable new research onmining the Internet from the department’s informa-tion systems group and its head, Vasant Dhar, DanielP. Paduano Faculty Fellow and director of theCenter for Digital Economy Research (CeDER) atStern (page 30).

In the several months I’ve been getting to knowthe Stern community, I’ve been impressed by itsacademic vigor. The presence of exceptional real-world practitioners on campus generates addition-al vitality. Among those augmenting our facultythis year are Eric Dinallo, former superintendentof the New York Insurance Department, and JohnBiggs, former chairman, president, and CEO ofTIAA-CREF. With heft like this, it was a natural toask them to engage in a point-counterpoint discus-sion of the insurance industry in the context of“too big to fail” and the question of regulation.You can read an excerpt of their conversation onpage 22.

Meanwhile, Stern’s exceptional finance facultyhas doggedly kept within its sights the constantlyevolving dilemma of our nation’s economy. Theirhard-copy book of analysis and advice, pub-lished in March 2009 – Restoring FinancialStability: How to Repair a Failed System – morphedinto an e-book late last year, and that in turn will betransformed into a successor hard-copy book,Regulating Wall Street, due out from Wiley this fall.Do take a look at this impressive living document at:w4.stern.nyu.edu/blogs/regulatingwallstreet/.

You, our alumni, continue to contribute to theworld’s economy. In this issue, we interview KevinParker (BS ’81), who, as global head of DeutscheAsset Management, has made a sustainable, low-carbon economy a professional and personal goal(page 14).

This is an exciting time to reconnect with yourSchool. We are planning events that we hope willengage alumni worldwide, and, especially as a new-comer, I look forward to meeting as many of you aspossible. We are proud of your accomplishments andalways grateful for your continuing commitment.

Peter HenryDean

contents S P R I N G / S U M M E R 2 0 1 0

STERNbusinessA publication of New York UniversityStern School of Business

President, New York UniversityJohn E. Sexton

Dean, NYU Stern School of BusinessPeter Henry

Vice Dean and Dean of theUndergraduate CollegeSally Blount

Chairman, Board of OverseersWilliam R. Berkley

Chairman Emeritus, Board of Overseers Henry Kaufman

Chief Marketing OfficerBeth Murray

Associate Dean, Marketingand External RelationsJoanne Hvala

Editor, STERNbusinessMarilyn Harris

Managing Editors, STERNbusinessRika Nazem and Jenny Owen

Contributing WritersShana Carroll, Keith Layton,Jessica Neville, Angela Parks,Carolyn Ritter, and Joey Schmit

IllustrationsGordon StuderChristophe Vorlet

DesignAnne Sliwinski

Letters to the Editor may be sent to:NYU Stern School of BusinessOffice of Public Affairs44 West Fourth Street, Suite 10-160New York, NY 10012www.stern.nyu.edu/sternbusiness

sternbiz@stern.nyu.edu

2 Public OfferingsThe Sixth Marketing Dynamics Conference presents the latest marketing research;celebrating Thomas F. Cooley’s deanship; the first workshop on information in networks;the latest strategies for measuring social impact; debating the role of government in setting accounting standards; entrepreneurial approaches to ending homelessness

7 Cover Story – Meet Dean HenryHe’s ready to lead Stern into the 21st century

10 Stern in the City10 Nickelodeon’s Samantha Woodruff is on kids’ wavelength, By Jenny Owen 12 Michael Achenbaum leads Gansevoort Hotel Group with style, By Rika Nazem

14 Investing for a Low-Carbon Economy8 Questions for Deutsche Asset Management’s Kevin Parker

16 The Renovated Concourse Brilliant, light-infused, and designed to enhance community, the state-of-the-art renova-tion of Stern’s Concourse is giving a lift to learning and teaching at Washington Square

20 Going Long on SternFinancier John Paulson gives $20 million for faculty chairs, facilities renovation, and student scholarships

22 The Insurance Industry: Its Future and Recent Past John Biggs and Eric Dinallo engage in a dialogue on whether the insurance industryshould be regulated in the context of the financial crisis

26 Leading IndicatorsStern’s CEO Series: Barry Salzberg of Deloitte talks about developing talent, managing in a recession, and new directions for his company

28 ProspectusA new faculty appointment, noteworthy papers, and faculty awards and honors

Office Hours – Faculty Research

30 Brave New WorldExcerpts of four provocative papers, by faculty in NYU Stern’s information, operations, and management sciences department, that demonstrate new ways of utilizing the wealth of information provided by the Internet

32 Double-Click to Find Your AudienceBy Foster Provost, Brian Dalessandro, Rod Hook, Xiaohan Zhang, and Alan Murray

33 Reading Between the LinesBy Anindya Ghose, Panagiotis G. Ipeirotis, and Arun Sundararajan

35 Heard It Through the Grapevine?By Sinan Aral, Lev Muchnik, and Arun Sundararajan

36 Word GamesBy Vasant Dhar and Anindya Ghose

38 Peer to PeerStudent Life in Washington Square and Beyond: Luxury retailing and defining leadership

40 Alumni RelationsAlumni News and Events: Alumni celebrate the holiday season and the renovation of the Concourse at the annual Alumni Ball; Julie Lucas leads the Office of Developmentand Alumni Relations; and alumni establish a mentoring program for students

44 Class Notes

52 Past PerformanceMarcus Nadler, legendary teacher, mentor, and original Money Marketeer, By Marilyn Harris

trade-offs, stockpiling, consumer learning models,technology adoption, and how to estimate the dis-count factor. Switching the focus to business deci-sions, she pointed to two areas for future research:evaluation of the total effects of marketing invest-ments and understanding competition.

During a panel on dynamic learning models,Stern Professors Anindya Ghose and Sha Yangshared two pieces of recent research. In his jointstudy with Sang Pil Han of NYU, Ghose studiedhow consumers access social networking sites suchas Facebook and portal websites such as Googlevia their smartphones. They examined how users,who are learning via direct experience versusword-of-mouth input, are influenced by the quali-ty of content, the assimilation of content to theuser’s taste, and the fees associated with usage, aswell as uncertainty about these factors. Yang,along with her co-authors, looked into consumerdecision-making on the household level.

The Seventh Marketing Dynamics Conferencewill be held in June at Özyegin University inIstanbul, Turkey.

With scholars and practitioners in attendancefrom around the US and countries as far-flung asGermany, Turkey, and New Zealand, the SixthAnnual Marketing Dynamics Conference served asa forum to share some of the latest research inmarketing. Hosted in August at NYU Stern andorganized by Professor Russell Winer, chair ofStern’s marketing department, and Stern AssociateProfessor of Marketing Vishal Singh, the three-dayconference convened close to 100 attendees fromtop universities including Columbia, Dartmouth,Harvard, Stanford, Yale, and NYU.

Throughout the conference, participants heardfrom leading researchers on topics such as researchmethodology, e-commerce, advertising, new prod-ucts and their adoption, dynamic pricing, structur-al models, and market entry.

Stern Professor Tülin Erdem identified twoavenues for future development: the dynamics ofdecision-making (on the corporate and consumerlevels) and the dynamics of marketing effects.Describing several elements that affect forward-looking consumer decisions, Erdem touched onconcepts that warrant further research, including

Public Offerings

2 Sternbusiness

SIXTH MARKETING DYNAMICS CONFERENCE PRESENTS THE LATEST MARKETING RESEARCH

NYU STERN HONORS THOMAS F. COOLEY’SDEANSHIP AT A CELEBRATORY DINNER

Alumni, faculty, administrators, andfriends of the School joined together atthe St. Regis in New York City onDecember 14 to honor the seven-yeartenure of Thomas F. Cooley as RichardR. West Dean. The School has estab-lished a Chair in his name in recognitionof his inspired leadership and in appreci-ation for his unwavering commitment toresearch, scholarship, and knowledgedissemination.

Sternbusiness 3

NYU STERNHOSTS FIRSTWORKSHOP ONINFORMATION INNETWORKS

In September, Sternhosted WIN –Workshop onInformation inNetworks – the firstsummit to bringtogether scholarsand practitioners toaddress informationin networks – itsdistribution, diffu-sion, value, and influence on social and economic out-comes. Hosted by Stern’s Information Systems ProfessorsSinan Aral, Foster Provost, and Arun Sundararajan, theworkshop was attended by speakers and participantsfrom Google Research, HP Labs, IBM, Cambridge,Carnegie Mellon, Columbia, Harvard, MIT, Stanford,University of Pennsylvania, and NYU Stern.

The presentations and panel discussions centered onhow networks shape and influence the world, using suchexamples as stock markets, the spread of disease, war-fare, marketing, politics, and the modern enterprise.“The purpose of WIN is to bring together leadingresearchers studying information in networks in order tolay the foundation for ongoing relationships and to builda lasting multidisciplinary research community,” saidworkshop co-organizer Aral.

For more than five years, Aral and his Stern col-leagues have been studying networked data in businessand economics, integrating ideas from economics, gametheory, information retrieval, machine learning, sociolo-gy, and statistics. Their research focuses on the complexi-ty of social networks and how the information containedin these networks changes business outcomes.

At the workshop, Aral explained the study in whichhe developed a framework to distinguish influence andhomophily effects in dynamic networks in marketing andpublic health. Provost discussed his research on privacy-friendly social network-based audience selection foronline brand advertising and observed that 30 percent ofconsumers’ free time is spent online, while only 8 to 10percent of advertising dollars are spent online.Sundararajan talked about his study on the diffusion of

demand shocks initiated by Oprah Winfrey’s Book Cluband The New York Times Book Review in the recommen-dation networks of books sold on Amazon.com.

James Fowler, one of the “dynamic duo” of social net-works research, according to Science magazine, andauthor of Connected: The Surprising Power of SocialNetworks and How They Shape Our Lives, shared hisrecent experimental research findings on how cooperativebehavior cascades through human social networks.

In addition, Alex “Sandy” Pentland, a computer scien-tist and the author of Honest Signals: How They ShapeOur Lives, presented his research on using reality mining– the collection of machine-sensed environmental datapertaining to human social behavior – to study how thedynamics of social networks influence productivity, cre-ativity, happiness, and social health.

Jon Kleinberg, a 2005 MacArthur Fellow, discussed hisstudy in which he tracked pieces of text as they traveledthrough online networks, such as e-mails and blogs, inorder to analyze how information spreads among peopleon a global scale and how news stories evolve and com-pete for attention.

Duncan Watts, often credited with “co-birthing” mod-ern network science and author of Six Degrees: TheScience of a Connected Age, showed how the Internet hasenabled researchers to study interactions between peo-ple on a large scale over time, using Facebook, e-mailserver logs, Amazon’s Mechanical Turk, and custom-built websites.

The range of research topics and mix of academicsand practitioners yielded a fruitful discussion and oppor-tunities for further research and collaboration.

(Left) Jon Kleinberg presented his research on how information spreads among people worldwide. (Right) Alex Pentland shared his study on how the dynamics ofsocial networks affect productivity, happiness, and health.

about how a social stock exchange, such as IIX, can pro-vide capital-raising tools for social enterprises and mar-ket entry and exit mechanisms for investors.

Laura Callanan, a philanthropy expert in McKinsey& Company’s social sector office, and Larry McGill, vicepresident for research at the Foundation Center, intro-duced two soon-to-be released social impact assessment

efforts. Callanan presented McKinsey’s recent workgeared for foundations and other funders, includinga white paper on assessment best practices, a hand-

book to assist practitionersin designing a learning-driven assessment, and avariety of reference materi-als. McGill introduced anonline database of tools andresources that will be usefulfor assessing social impact.The database contains 150tools for measuring andanalyzing social impact andis aimed at programs andinvestments.

John MacIntosh of SeaChangeCapital Partners, a nonprofit firm thatseeks to arrange funding for high-per-forming organizations, delved into acase study about Uncommon Schools,an organization operating charterschools in Brooklyn, Newark, andupstate New York that seeks to preparelow-income students for college. BrianTrelstad, chief investment officer of theAcumen Fund, described the blendingof both traditional and social returns in“patient capital,” where investors arewilling to forgo returns for an extendedperiod of time.

During a networking reception andawards ceremony, the 2009 Satter Social Entrepreneurof the Year Award was presented to Scott Harrison,founder of charity:water, an organization that hasraised more than $10 million and provided more than700,000 people in 16 developing nations with safedrinking water.

To view videos of the conference, visit:http://w4.stern.nyu.edu/news/news.cfm?doc_id=101915.

“Great strides have been made in the field ofsocial entrepreneurship, but the ability to measureand communicate the impact of a venture’s effortsstill remains a significant challenge for most organi-zations,” said Stern Professor Jill Kickul, organizerof the School’s Sixth Annual Satter Conference ofSocial Entrepreneurs.

Tackling this issue head-on, some 220 worldwidepractitioners from the pub-lic, nonprofit, and for-profitfields, along with leadingscholars, convened for theSatter Conference inNovember. Hosted byStern’s Berkley Center forEntrepreneurship &Innovation, the event fol-lowed a two-day academicconference featuring someof the latest research in theareas of social enterprise andmeasuring an organization’ssocial impact.

Jed Emerson, managingdirector for integrated perform-ance at Uhuru Capital, kickedoff the event by sharing his per-sonal reflection on society’sshared progress in the field ofsocial enterprise and perform-ance metrics. He cited severalobstacles to the field’s contin-ued success, including theimplementation of social man-agement information systemsacross industries and theembedding of metrics in day-to-day business practices.

Richard Steele of Bridgespan Group moderated apanel discussion on impact investing with GeorgetteWong, president of Correlation Consulting; JoshCohen, managing partner of City Light Capital; SeanStannard-Stockton, CEO of Tactical PhilanthropyAdvisors; and Tris Lumley, head of strategy at NewPhilanthropy Capital.

Durreen Shahnaz, founder of the ImpactInvestment Exchange (IIX) in Asia, spoke to attendees

Public Offerings

4 Sternbusiness

SIXTH ANNUAL SATTER CONFERENCE OF SOCIAL ENTREPRENEURS EXPLORES LATESTSTRATEGIES FOR MEASURING SOCIAL IMPACT

(Top left) Jed Emerson cited the lack of metrics in the day-to-daybusiness practices of social enterprises as an obstacle to their suc-cess. (Top right) Durreen Shahnaz discussed the benefits of a socialstock exchange for social businesses. (Bottom) Conference organiz-er Jill Kickul presented the 2009 Satter Social Entrepreneurship ofthe Year Award to charity:water founder Scott Harrison.

Sternbusiness 5

In September, the NYU Stern Salomon Center for theStudy of Financial Institutions held a conference forindustry leaders, Stern faculty, and journalists on insur-ance industry regulation, touching on lessons from thefinancial crisis and options for regulatory improvement,including enacting an optional federal charter.

John Biggs, NYU SternExecutive-in-Residenceand former CEO of TIAA-CREF, explained that theinsurance industryaccounts for approxi-mately 10 percent ofGDP and is more sys-temic than peoplebelieve. He noted theconference was an out-growth of a new chapterof the Stern faculty’sresponses to the financialcrisis, added online to thee-book version ofRestoring Financial Stability: How to Repair a FailedSystem (Wiley, 2009). Co-authors of the chapter oninsurance were Stern Finance Professors Viral Acharyaand Matthew Richardson.

Keynote speaker Roger Ferguson, CEO of TIAA-CREF and former vice chairman of the Board ofGovernors of the Federal Reserve System, voiced his sup-port for an optional federal charter (OFC) and afterwarddiscussed the issue with Eric Dinallo, Henry KaufmanVisiting Professor of Finance at Stern and former super-intendent of the New York State Insurance Department.Ferguson said an OFC would “increase efficiency of themarketplace, provide for effective and ample consumerprotection and for prudential regulation, and increase theglobal competiveness of the US insurance industry.”Dinallo, while potentially supportive of an OFC for somebusinesses such as monolines and reinsurance, predictedthe “optional” aspect of the OFC would be a “disaster,”citing AIG as an example of a company that selected aregulator that couldn’t prevent actions that nearlybrought the company to ruin.

Acharya explained the need to quantify systemicrisk and regulate what is worrisome versus what ismeasurable, and, with Dinallo, discussed credit

default swaps and the role of credit rating agencies incontributing to the crisis.

Mark Parkin, managing director of Deloitte & Touche,explained the difference between GAAP accounting prin-ciples and statutory accounting principles (SAP), whichare accounting rules specific to the insurance industry.

Frank Keating, CEO ofthe American Council ofLife Insurers and formergovernor of Oklahoma,addressed the issue of pro-tecting American retirementsecurity. He advocated foran OFC for life insuranceand an Office of NationalInsurance at the TreasuryDepartment to provide afocus on solutions for theinsurance industry at thefederal level as well as atthe state level.

David Cummins ofTemple University discussed whether insurance compa-nies can be too big to fail, pointing out that banks have$14 trillion in assets, whereas insurance industry assetstotal about $6 trillion, and noting that insurance compa-nies lack the ability to trigger failures in the payment sys-tem or threats to the credit markets. William R. Berkley(BS ’66), CEO of W. R. Berkley Corp. and chairman ofthe Stern Board of Overseers, noted that annuities arehighly leveraged enterprises and said that insurers had anincentive to push investment risk to obtain the largestspread they could, precipitating what he called “the per-fect storm” in the annuity business.

Howard Mills of Deloitte & Touche, former superin-tendent of the New York State Insurance Department,argued that if the OFC doesn’t pass now, it should betaken off the table. When asked about achieving regu-latory consistency across all states, Dinallo assertedthat it is not possible, with Mills’ citing the lack of uni-formity of state resources as a reason. Furthermore,Mills added that the accreditation of agents sellingproducts to seniors was one of the “time bombs” that isremaining in the industry.

To view videos of the conference, visit:http://w4.stern.nyu.edu/news/news.cfm?doc_id=101839.

SALOMON CENTER ADDRESSES INSURANCE INDUSTRY REGULATION

Insurance industry luminaries (left to right) Eric Dinallo, Roger Ferguson, and John Biggs debatedthe options for regulatory improvement of the insurance sector.

Public Offerings

“No one com-plained when mark-to-market accountingprinciples meantmarking up,” com-mented SternAccounting ProfessorSeymour Jones, wholed a discussion aboutpolitical influence onaccounting standard set-ting last November atStern. In light of theincreased scrutiny onaccounting practices as aresult of the financialcrisis, he asked, “Towhat extent should gov-ernment control GAAP?”

Some 40 academics, practitioners, and policy makersgathered for a roundtable discussion, hosted by Stern’sVincent C. Ross Institute of Accounting, to debate whetheror not the Financial Accounting Standards Board (FASB)should be insulated from political pressure.

“The government is now reaching into the healthcaresector and auto industry,” explained Mark Lilling, CPA (BS’72), of the Audit Committee Consulting Team LLC and ofLilling & Company LLP. “So government involvement inaccounting standard setting seems almost natural.”

Raymond Beier of PricewaterhouseCoopers LLP arguedthat standard setting needs to be independent and freefrom government influence. NYU School of Law ProfessorStanley Siegel posed the idea of creating a principledprocess in which politicians openly share their objectiveswhen pushing for changes to accounting standards.

Karthik Ramanna of Harvard Business School dis-

cussed his joint researchentitled, “Are RepublicansConservative?” whichstudied auditor com-ments about accountingstandards over thecourse of several years.He found that as thenumber of Democratsserving on the FASBdecreased, the number offavorable views on stan-dards expressed by the“Big Eight” accountingfirms increased.

Pointing to the failureof conventional regula-tion, Robert Herz, chair-

man of the FASB, argued that incentives for business lead-ers to employ a “delay and pray” tactic in their financialreporting were significant culprits in the financial crisis andneed to be addressed.

Taking an opposing view, Stern Economics ProfessorLawrence White underlined the value of a “delay andpray” option for companies during an economic downturn,saying that when it works, it saves companies and investorsfrom unnecessary pain.

Citing a number of obstacles to obtaining high-qualityfinancial reports, Stern Accounting Professor Joshua Ronenoffered a possible solution: using management’s expectedvalue of cash flows alongside the disclosure of current exitvalues as a measure of downside risk.

“Individuals who care about accounting standard settingneed to get organized and foster more debate on these top-ics,” stressed Stern Accounting Professor Stephen Ryan.

ROSS ROUNDTABLE DEBATES THE ROLE OF GOVERNMENT IN SETTING ACCOUNTING STANDARDS

FOUNDER AND PRESIDENT OF COMMON GROUND, ROSANNEHAGGERTY, PRESENTS FIFTH ANNUAL HAITKIN LECTURE

At the Fifth Annual Haitkin Lecture, Rosanne Haggerty ofCommon Ground, a pioneer in research and housing developmentdedicated to helping individuals overcome homelessness, presented“Entrepreneurial Approaches to Ending Homelessness.” The annuallecture series, made possible through the generosity of Jeffrey M.Haitkin (BS ’68), is dedicated to supporting the continuing dis-course on significant emerging issues in business ethics.

(Bottom, left to right) Accounting experts Robert Herz, Seymour Jones, Mark Lilling, and Joshua Ronendiscussed the government’s role in setting accounting standards for the industry.

6 Sternbusiness

Sternbusiness 7

After his second month on campus, NYU Stern’snew dean, Peter Henry, sat down with STERNbusinessto share his initial impressions of and vision for the School.

Q: Help our alumni get to know you. Tell us a bitabout yourself. A: Let’s start from the very beginning. I was born inJamaica in 1969. In 1978, my parents decided to moveto the United States in search of a better future for ourfamily of six. I quickly learned two things from themove. First, January in Brooklyn is a lot colder thanJanuary in Kingston. Second, middle-class families inthe US have far more income than they do in Jamaica.Trying to understand why standards of living are lowerin some countries than others – and what we can doabout it – remains a personal mission for me some 30years later. In fact, it has been the driving inspirationbehind my research as an international economist,examining emerging markets and the forces that shapethe global economy.

Both of my parents are scientists, so I grew up in ahousehold where we constantly confronted theorieswith facts – we batted around a lot of ideas at the din-ner table, but you had to support your views with evi-dence. As a result, I learned to think big, as long as Ihad the facts to make my case. I’ve relied on thisapproach to decision-making throughout my career. Iguess you can say that I’m a pragmatic idealist.

On a more personal note, I was a varsity athlete in

college (football at The University of North Carolina,basketball at Oxford University) and now enjoy playingsports with my four boys, reading novels, and watchingMasterpiece Theater with my wife, Lisa.

Q: What attracted you to pursue the deanship at NYUStern?A: Last April, I was sitting in California, working onmy book and enjoying a much needed break after mywork for President Obama’s Transition Team (see lastquestion), when I got a call asking me to apply for thedeanship at NYU Stern. I was thrilled. The NYU Sterndeanship is the only one in the world that I would havetaken. The fit was just right. The story of NYU is oneof hope, energy, and dynamism – optimistic, creativepeople, working tirelessly in search of a better life.There are many variations on this story – night school,long commutes, international relocation, scholarships,part-time study, and the list goes on. Although I do nothave a degree from NYU, as an immigrant kid, I havean NYU story of my own. This is why I felt an immedi-ate connection to the NYU culture and community.

I was also compelled by the opportunity to take partin NYU President John Sexton’s mission to redefinewhat “international” means in higher education – tocreate the one-of-a-kind global network university thatis only possible at an institution like NYU. NYU’s globalvision is the way of the future. For the first time in his-tory, emerging markets are driving the world’s economicrecovery, and a number of these countries will ultimate-

He’s Ready toLead Stern

Into the 21stCentury

H e ’ s R e a d y t o L e a d S t e r n I n t o t h e 2 1 s t C e n t u r y

MeetDean

Henry

8 Sternbusiness

ly supplant some of today’s G10. The privilege of beingasked to help chart the course of one of the world’sleading business schools at a time of such a profoundreordering of the global economic landscape struck meas a once-in-a-lifetime opportunity.

Q: NYU Stern’s New York City location is a terrificasset for a business school. What are your thoughtsabout leveraging this location? A: New York is a strategic hub in both the globaleconomy and the global network university of NYU.Our location enables us to engage readily and regular-ly with alumni, business leaders, and policy makersfrom all over the world. Of course, a hub is by defini-tion a launching pad to other places as well as aninbound destination. We intend to venture out into theworld more than ever, engaging with alumni, fromScarsdale to Shanghai, Manhattan to the Middle East.We will use the breadth and depth of our facultyexcellence, coupled with Stern alumni in leadershippositions around the world, to convene, shape, anddrive the great conversation between business, govern-ment, and society. I hope that our alumni around thecountry and the globe will serve as active participantsin this endeavor.

Q: Can you share your plans for Stern? A: During my early days as dean I’ve been listeningto and sharing views with many different groupswithin the Stern community – students, alumni, andour boards. But I’ve also solicited views from outsideof our community to gain a broader sense of theissues on the minds of business and policy leadersand to assess possibilities for mutually beneficialpartnerships. As I listen to suggestions and evaluatechallenges and opportunities, I am keenly aware ofthe importance of articulating goals and holding our-selves accountable to measurable outcomes. We havea plan, and I want to share the three key strategicpriorities that will drive it. First, we want to deepenand diversify our excellence. We are stellar in finance,but we will strive for undisputed excellence in otherareas that are central to our mission. Global econom-ics is a major priority, for example, and I’m delightedto report that Nobel Laureate economist Mike Spence(page 28) will join the Stern faculty this September.Second, we need greater alumni engagement, whichmeans we need you to stay involved and to let us

know how we can better serve you. Together we have atremendous opportunity to deepen our engagement withcorporations around the world, extend our policy influ-ence, and continue to improve the student and alumniexperience. Third, we are going to take great advantageof and tap into the innovation, energy, and globalinterconnectivity that is at the very heart of NYU andthe global network university.

Q: What do you hope to bring to the School as thenew dean?A: An eye for the big picture. As we emerge from themost significant financial crisis since the 1930s, theglobal economy is at an inflection point. We don’tknow what the future holds, but we do have an oppor-tunity to develop leaders who will help shape it. Thecomplex, multifaceted problems of the 21st century –global imbalances, rapid urbanization, and environ-mental sustainability, to name a few – will requireleaders who bring a multidisciplinary, integrativeapproach to problem solving. We need leaders who willdeliver solutions to the greatest challenges of the daybecause they are comfortable with ambiguity, ask theright questions, and because they understand that busi-ness, policy, and society are inextricably linked. So,first and foremost, I bring a new, integrative mindset tothe learning experience we deliver. Second, having pro-fessional ties on the West Coast as well as inWashington, I plan to help broaden, deepen, and opendoors to new networks. Perhaps most important, Ibring optimism, energy, enthusiasm, and great passionto work with faculty, students, and alumni to propelStern to a place of undisputed excellence in research,teaching, and impact.

Q: What do you see as the major challenges and oppor-tunities facing business education today? A: As the world economy changes, we will need to benimble and adapt to a landscape that will likely bequite different in the future. Emerging markets repre-sent the future of growth. How do we prepare futuremanagers to function effectively in multiple countriesand cultures? How do we train a generation of CEOsand business leaders who will make it a corporateimperative to have their employees function as efficient-ly in the Middle East as they do in Manhattan? Withthese great challenges comes an incredible opportunityto meet them head on.

Sternbusiness 9

Q: What do you see as the function of business globally?A: Business is one of the most powerful institutions onearth for generating wealth, creating jobs, and help-ing to lift people out of poverty. We’re at a criticaltime in global business. Capitalism has come underquestion, economic policies are being reconsidered,and countries are groping to find the best way for-ward. We need to remind the world of the positiveimpact that business delivers when it behaves respon-sibly. Business schools need to be at the forefront ofthis discussion.

Q: What are your plans to raise the profile of Sternin the business community?A: I am already spending time talking to employers,encouraging them to invest in our students, whostand out from the pack because of how they effec-tively integrate emotional intelligence with intellect.But I also need your help. You are the leaders of busi-ness around the world. You have the opportunity tostrengthen your own mini-Stern network within yourfirm, which enhances our profile from the ground up.The next step is to take advantage of the many link-ages that exist, but that may currently be untapped,among these Stern networks and the business andpolicy communities at large. Participating at all levelsis what will make the difference for all of you.

Q: How will you work to strengthen the Sternalumni network? A: I am getting out and meeting with alumni – I’vetraveled as far as San Francisco, Los Angeles, andLondon. Closer to home, I have made stops inWashington, New Jersey, and Westchester in my firstfew months to get to know our community and inspirethem to take part in our future. But the point I want tostress is that the Stern network is YOUR network.Nurture it, leverage it, show your pride in it, and deep-en it. It is you who are the strength of the network andthe School.

Q: What role do you see alumni playing in advanc-ing your goals and vision for Stern?A: Your active involvement in the Stern community isparamount to our success. Hire our students, be amentor, support the next generation of Stern-educatedbusiness leaders, engage in the discourse of ideas withfellow alumni and faculty. And please give generously

to Stern. We need your financial support to providescholarships to talented students of limited means, hirethe best faculty, and upgrade our physical facilities.Most important, be an ambassador for your alma mater– as pride travels most effectively by word-of-mouth andmakes the most credible and powerful impact.

Q: You’re an economist who studies economic reformin emerging markets. Tell us about your research. A: Let me briefly share an example that hits close tohome for me. In spite of having virtually identicalinstitutions, the standards of living in Barbados andJamaica diverged widely in the 40-year period follow-ing their independence from Britain in the early1960s. Why did this happen? During the implosion ofthe Jamaican economy during the 1970s and ’80s, thegovernment ran large budget deficits, closed the coun-try to international trade, and intervened extensivelyin the economy. In contrast, Barbados maintained fis-cal temperance, kept state ownership to a minimum,and embraced open markets. The cumulative impactof this difference in decision-making is striking. In1960, real income was $3,400 per person in Barbadosversus $2,200 in Jamaica – a difference of $1,200.Today, the gap between incomes in the two countriesis five times as large, and the gap itself exceeds theentire average level of income in Jamaica. What canwe learn from this slice of Caribbean history? Simplyput, public policy is directly connected to economicoutcomes. Without good public policy, business suf-fers, and so do standards of living. Governments,large and small, would do well to remember the les-son of this Caribbean parable.

Q: You were on the Obama transition team. What was your role and what did you take awayfrom that experience?A: I led the Obama Transition Team’s review of theInternational Monetary Fund, World Bank, and otherinternational lending agencies. This was a high-octanelesson in what constitutes successful team dynamics.Team members who shared their ideas in the spirit ofadvancing the President’s goals – exhibiting transparen-cy and true team play – were the most credible andpersuasive. Those who chose to row in their own direc-tion were less effective. The take-away? One can wieldincredible influence as a team player if you simplyremember that you’re playing for the team. ■

10 Sternbusiness

by Jenny Owen

Ask any kid with a televisionabout Nickelodeon and he’ll likelybreak into the cheerful theme songto Nick’s much-loved nauticalshow, “SpongeBob SquarePants.”“Who lives in a pineapple underthe sea? SpongeBob SquarePants!Absorbent and yellow and porousis he. SpongeBob SquarePants! ... .”

Nickelodeon is an entertainmentpowerhouse for kids and their fam-ilies, and the most popular chil-dren’s TV network,best known for“SpongeBob” aswell as “Dora theExplorer” and theoldies but goodiessuch as “Rugrats”and “DoubleDare.” Leading thecompany’s strategyand businessdevelopment assenior vice presi-dent is SamanthaWoodruff (MBA ’04).

A self-pro-claimed TV junkiewho loved cartoonsas a child and con-tinues to watch alot of television, Woodruff is working her dream job.“I’m one of these people who wrote their businessschool essay saying they wanted to do the job thatthey’re in now,” she said.

She credits her business school experience for teach-ing her the basics. “Stern gave me a whole toolbox ofskills I didn’t have before. I was a history major inundergrad and then worked in market research and

didn’t have any grounding in the finan-cial discipline that I need to do my cur-rent job.” She also credits Stern withbringing her together with her husband,a classmate.

At Nickelodeon, Woodruff is respon-sible for internal strategy and businessdevelopment for the Kids & FamilyGroup of MTV Networks, whichincludes all Nickelodeon brands.Beyondbusiness reporting, she develops thestrategic financial underpinnings with

long-range finan-cial models andbudgets for most ofthe business units,including televisionchannels, onlineand digital busi-nesses, consumerproducts, andrecreation. She alsodevelops plans fornew businessopportunities andis in charge ofmergers and acqui-sitions and strate-gic partnerships,assessing potentialM&A transactions,and working with

the corporate M&A group and lawyers to negotiate andclose the deals.

Most recently, her group handled the purchase of theTeenage Mutant Ninja Turtles (TMNT). “They are an icon-ic cast of characters [that have been] around since the1980s, they resonate with a variety of different genera-tions, and they fit with the Nick comedic sensibility,”explained Woodruff. “We are the biggest TV platform to

sternInTheCity

TV Junkie Turned TV Executive

(Top) Samantha Woodruff is senior vice president of strategy and business development at Nickelodeon.(Bottom) Nickelodeon’s “SpongeBob SquarePants” is one of the network’s top shows on air today.

Sternbusiness 11

reinvent a propertyand bring it to anew audience andthe next genera-tion.”

In referring toNickelodeon as “thebiggest TV plat-form,” Woodruffisn’t exaggerating.After three decadesof operations,Nickelodeon is themost-watched tele-vision network bykids in the US andbasic cable’s num-ber one network overall, with more than 100 millionviewing households domestically and 471 million house-holds globally in 161 territories. It operates 29 channelsacross Africa, Asia, Europe, Latin America, and the US.

As it approaches middle age, the network is actuallygathering momentum. “The bestpart about 30 years in businessis that the first generation ofkids that grew up withNickelodeon are now parents, soit’s given us a brand that reallyresonates with the entire fami-ly,” said Woodruff. “This hasallowed us to expand our busi-ness to a variety of audiences that aren’t the core kid, 2to 11 demographic, with TeenNick for tweens and teens,Nick Jr for toddlers, and ParentsConnect for parents.”

What’s at the heart of Nickelodeon’s success? “Wedo a ton of research, so we feel really connected to ouraudiences. We have grown and evolved with them overtime,” explained Woodruff. “We have great product –best-in-class animation, great live-action shows, char-acters that resonate – and that’s a winning formula.We have the best talent in the industry. And we staytrue to our audience. Kids are our core, and we’llnever forget it.”

Nickelodeon programs that connect especially wellwith today’s kids are “iCarly,” “The Penguins ofMadagascar,” and one of Woodruff’s personal favorites,

“Ni Hao, Kai-lan.”And in the 10 yearssince Woodruffjoined the company,she has witnessed“SpongeBobSquarePants” and“Dora the Explorer”solidify their rankingas two of the topshows on air today.

Woodruff has alsoseen the explosion ofthe Internet andmultiple media plat-forms, making con-tent ubiquitous in a

way that it wasn’t a decade ago. “iCarly” – whose maincharacter, Carly, has a Web show on which she sharesreal fan videos – “has a different model that no onewould have envisioned 10 years ago,” said Woodruff.

Woodruff also underscored Nickelodeon’s presence inNew York City as a contributorto the company’s success.“New York is the number onemedia market and to be inNew York City, in TimesSquare, in the heart of half themedia industry – which has anequal presence in LA – it’scritical for us.”

Despite the fact that Nickelodeon is an ad-supportedbusiness in a down economy, Woodruff said the businessremains strong. “We’re doing really well, which speaks tothe power of Nickelodeon.”

Continued growth for Nickelodeon includes a part-nership with Sony to premier a show called “Big TimeRush,” which follows the making and breaking of aboy band. Plans are also in the works for a new TMNTCGI (computer-generated imagery) series and a moviewith Paramount.

Woodruff has also seen growth in her personal life,with the addition of baby daughter Lila, who gives heryet another reason to tune into kids’ television program-ming. Together, the two enjoy watching “TheBackyardigans” and “The Fresh Beat Band.” ■

“The best part about 30 years inbusiness is that the first genera-

tion of kids that grew up withNickelodeon are now parents, soit’s given us a brand that really

resonates with the entire family.”

Carly (center left), the main character of Nickelodeon’s popular “iCarly,” has her own Web show on which she sharesreal fan videos – “a model no one would have envisioned 10 years ago,” according to Woodruff.

12 Sternbusiness

Michael Achenbaum (center) leads theGansevoort Hotel Group. (From left toright) The new Gansevoort Park Avenueis scheduled to open this year.

When you think of theMeatpacking District in NewYork City, a few adjectivesmay come to mind: chic, hip, vibrant. TheGansevoort Hotel, an anchor in the once gritty area,is synonymous with the neighborhood’s image, large-ly because it contributed to its gentrification. Thehotel, rated among the best in the world, is the firstfive-star hotel in the neighborhood. MichaelAchenbaum (MBA/JD ’98) leads the GansevoortHotel Group (GHG) as its co-owner and president.

Achenbaum has always had a fascination withbuildings, dreaming when he was young of becomingan architect. “I grew up thinking I would design andbuild buildings,” he said. Instead, he pursued anMBA/JD dual degree from NYU and worked at

Nomura Securities andBear Stearns issuing loansfor securitized mortgages.“We’ve been hearing

about the trouble that these products have caused intoday’s markets, and, interestingly, at the time I wasworking with them (in the 1990s), they had their ownissues,” he said. During his time on Wall Street, “I wit-nessed a number of multimillion-dollar deals and got agreat deal of valuation experience very quickly.”However, the environments were not as entrepreneurialas he liked, and Achenbaum made the decision to go intothe family business – his father is the chairman of GHG.“The contacts and experience I honed while working atthose companies helped me a great deal when I made thetransition to GHG.”

The Gansevoort Hotel in the Meatpacking District,

Hotelierto theHip by Rika Nazem

sternInTheCity

built in 2004, was the first of the Gansevoort-brand-ed projects. Achenbaum was very involved in its con-struction, and he oversees the design and operationalaspects of GHG’s subsequent projects, which includehotels in Miami, South Beach, Turks and Caicos, and,this year, on Park Avenue in New York City. “I amconstantly traveling,” he said. “Whether it’s to viewfurniture samples in Asia or to meet and build rela-tionships with high-end restaurateurs, designers, and

club and retail operators for space in our hotels, Iam looking for that fresh angle that will enhancethe Gansevoort brand.” His law

and business skills constantlycome into play, too, since he’s

frequently reviewing agreementsand contracts.

Plans exist for the Gansevoort to expand into othermajor cities, including London, Los Angeles, and,further down the line, Las Vegas. “Our signature ele-ments are our bars and rooftop pools. The expecta-tion of the rooftop sets limits on where we canexpand,” Achenbaum explained. The economy hasalso limited expansion and forced GHG to examine itsbusiness. “We’re careful not to cut back – we strive tomaintain the same level of service, which we under-stand may net us less profit. If we cut back on serv-ice, we risk damage to the brand and to our customerloyalty – two things we don’t want to compromise.”

Working with family can add complexity, too.Achenbaum and his father are equal partners, but, “Ialways say there is nothing equal about being in busi-

Sternbusiness 13

ness with your father. He holds the ultimate trump card.Though, I have to appreciate that he has given me amaz-ing opportunities.”

Achenbaum has learned over the years to take down-time and dis-connect fromhis job, even ifit’s just shuttingoff his cellphone for a fewhours. “Whenyou’re involvedin a familybusiness that is

highly entrepre-neurial, youtake pride in

what you do and it’s hard to turn off.”On the personal side, Achenbaum is

deeply involved in children’s charities and mentoringyoung adults, a cause he has supported for a long while.“In college, I was involved in a big sibling program. Ibelieve that if you can help one child, that child maygrow up later in life with the same belief,” he noted.“It’s hugely rewarding to me to see how my time andeffort spent with a child or young adult yields positiveresults.”

In his downtime, Achenbaum can occasionally befound at hot spots in New York City, but he said heprefers spending time within a smaller circle. “I likesociable restaurants with a musical element to them, andI like to go out to a great dinner with some of my closestfriends.” Whether he’s putting his stamp on a new hotelor planning an evening out, this is a man who knowswhat he likes. ■

10 Sternbusiness

Kevin Parker joined Deutsche Bank (DB) in 1997.Before assuming his current role in 2004, he served asthe global head of institutional equities from 2000 to2004, and from 1997 to 2000 he was responsible forbuilding and developing DB’s equity derivatives andtrading, and prime brokerage businesses. Prior tojoining DB, he worked at Morgan Stanley in a varietyof positions. Parker, a member of DB’s group execu-tive committee, oversees some $700 billion of assetsacross a broad range of asset classes. One of thoseclasses – valued at about $6 billion and groupedunder a unit Parker formed, called Deutsche BankClimate Change Advisors (DBCCA) – focuses on busi-nesses and technologies aimed at mitigating the effectsof climate change, a megatrend he believes will driveinvestment markets over the coming decades. It is alsoa cause he has come to champion. He is increasinglytaking the campaign for a low-carbon economy public,most obviously in the form of the Carbon Counter, a70-foot-tall electronic billboard in New York City thatuses a counter to display the real-time accumulationof greenhouse gases in the atmosphere. In January,Parker spoke at the World Future Energy Summit inAbu Dhabi, a gathering of 3,000 world leaders,investors, and researchers.

1. How did you first become interested in environ-mental issues?I grew up in New Jersey, and driving up the parkwayto visit relatives I would see these billowing smoke-stacks by the highway. Many of my relatives eventual-ly developed diseases. To me, it was logical that tostay healthy you have to steer clear of chemicals. Andnow, 40 years later, it’s pretty clear that many of thediseases we have to contend with are the result ofsuch pollutants.

2. Not many people have the vision to go from grow-ing grapes organically to building a $4 billion assetmanagement business focused on climate change.

How did you go about it, and how did you getDeutsche Bank on board with the idea of investing inthese alternative assets?I became interested in wine in my early 20s, though Inever intended to own a vineyard. But when I was liv-ing in Tokyo, I was approached by a friend of a friendabout putting a little money into his vineyard. We bothagreed that growing organically was the way to do it.Fifteen years later, we’re happy we did, and we’re pro-ducing world-class wines. At the same time, living inJapan and thinking about its demographics – an agingpopulation, high savings rate, slowing economic growth– and how that was atypical of much of the world, Ibegan to think about population growth and how therewill be nine billion people on the planet by 2050. Thatled me to think about the sustainability of the atmos-phere and of energy. I made my first personal invest-ments in renewable energy at that time. And I started toask what it would take for the world to shift to a low-carbon economy. Getting Deutsche Bank on board was-n’t easy at first. I started the effort here in 2005, but itwasn’t until Al Gore spoke at my conference in 2007that a sea change began to take effect throughout differ-ent pockets of the bank and in different arenas, like sus-tainable building, interest in carbon trading, and solarenergy. People follow the bouncing ball of money. Plus,Deutsche Bank has always had a big commitment tobeing a sustainable and responsible global citizen.

3. What is your process for identifying megatrendssuch as climate change? When I was a senior at Stern in 1981 I wrote a paperpublished in a Stern magazine on scenario planning.So strategic planning has been with me since collegedays, and it works particularly well in asset manage-ment because the trends in asset management tend tobe very long-lived. And megatrends can have a long-term impact if you get them right – or wrong! In 2005we spent a lot of time mapping the megatrends. Weidentified six and I added the seventh: climate change.

8QuestionsKEVIN PARKER (BS ’81) global head, Deutsche Asset Management

14 Sternbusiness

4. You have said that the US Congress is thebiggest obstacle to a low-carbon economy in thiscountry. How so?Rather than recognizing the clear and present dan-ger we face from climate change, our leaders areputting political agendas first, debating on the basisof left-aisle and right-aisle issues. It’s insanity. Avery recent study by MIT predicted that a do-noth-ing scenario could result in the kind of temperatureelevation that could mean the extinction of thehuman race by the end of this century. That’s howfast change is happening. Every model of the effectof greenhouse gases has been wrong. We’re seeingchanges in the environment decades ahead of sched-ule. Lobbyists play a role in trying to block progress,but legislators are supposed to be leaders and see pastthat. The US is expected to be a leader in the world,but we have sat on the fence for a dozen years, whichgives the rest of the world a free pass to do nothing.Sadly, our legislators are failing miserably.

5. If you were a legislator, what would be the firstbill you would propose to put the US on the path toa low-carbon future?The cap-and-trade bill would be a good first step.Once the allowances are sorted out, as carbon emis-sions increase and move up to the cap, the price ofcarbon will start to increase and it becomes moreattractive to switch to alternatives. And there shouldbe follow-on regulations regarding feed-in tariffsand energy-efficiency standards that force us toreally reach. The automakers can just step over thecurrent standards.

6. Experts say it will take a $45 trillion investment,globally, over the next few decades to transition to amore sustainable energy model. How do we getthere from here?

We make it attractive. For capital formation, thereneeds to be TLC – transparency, longevity, and cer-tainty. We need a transparent regulatory environment,certainty for investors, no flip-flopping. I worry moreabout the resolve of legislators to foster this shift thanthe capital.

7. Did you ever envision yourself becoming an evangelist for any cause, and particularly this one? No, and I didn’t want to. I’ve had a policy of not talk-ing to the press for almost three decades on WallStreet. But that changed last spring. I took my olderson, who was eight at the time, to try out for a hockeyteam that was a reach for him. If he made it, great,but if not, he would learn a little about dealing withrejection. He didn’t make the team, and of course hewas very upset. After a while he turned to me andsaid, “Dad, it doesn’t really matter, because with glob-al warming there won’t be any ice on the planet in 10years, so I wouldn’t be able to play anyway.” I knowwhen he gets a little older he’s going to ask me why, ifI knew this was happening, I didn’t do somethingabout it. With all the resources we have at DeutscheBank, and the great research we’ve sponsored andbeen a part of, to not take the fight more broadlywould be a waste. The Carbon Counter we built inManhattan, at Seventh Avenue and 33rd Street, is asmall but effective part of that, and we’re consideringbids to build others in several other countries.

8. What influence has your experience at Stern hadon your career?The great quality of Stern is that the students are grit-ty, tough, street-smart, high-reality kids. It’s a world-class educational institution located in New York City,the most competitive place in the world. You can’t beatthat combination. ■

Sternbusiness 15

16 Sternbusiness

In a festive ribbon-cutting thatkicked off the 9th Annual NYUStern Alumni Ball, alumni cele-brated on campus inthe transformedConcourses of TischHall. The lobby’s newglass façade and sky-lights on Gould Plazainfuse spaces withlight. The centerpieceglass stairwell createsan ambience of open-ness and connection.Dynamism, energy,and color now floodhallways. Walk thenew halls of Stern inthe following pages toget a closer look.

Alumni Reconnectin Stern’s NewState-of-the-ArtSpace

The renovated Tisch Hall Lobby features a glass façade that now brings light into the space.

CONCOURSE PROJECT

Inaugurating the new space: (from left to right, back row) Mark Bean (MBA’06), chair, Alumni Ball Host Committee, Alumni Council; William Berkley(BS ’66), chairman, Board of Overseers; Thomas F. Cooley, dean emeritus;Leonard Stern (BS ’57, MBA ’59), Board of Overseers; John Paulson (BS’78), Board of Overseers; (front row) Stewart Satter (MBA ’82), Board ofOverseers; Sally Blount, vice dean and dean of the Undergraduate College

Sternbusiness 17

Being global iscentral to Sternand is reflected in its environment(Upper ConcourseLobby).

Gould Plaza begins to glow at night.The dynamism of the Stern community mirrorsthe dynamism of NYC (Upper Concourse Lobby).

18 Sternbusiness

Skylights on Gould Plaza filter light into the Upperand Lower Concourses.

Lounges and “touch-down” stations provide opportunities forstudents to socialize and study.

The Ernst & Young Learning Center (Lower Concourse)offers tutoring support to undergraduate students.

The energy ofStern flows upand down theinterconnect-ing stairwellbetweenTisch Lobbyand theConcourses.

Sternbusiness 19

Imagine what itwould feel like tosee your name on the walls of your

alma mater

Make a three-year commitment todayof $5,000, $10,000, or $25,000 to the

Stern Fund, in support of theConcourse Project, and have yourname on a donor recognition wall

in the newly renovated space.

To learn more, visit the website atwww.stern.nyu.edu/buildconcourse

or call (212) 998-4161.

The renovated lobby of the Henry KaufmanManagement Center has a clean, modern feel.

Modern, bright lounges with splashes of color offerwelcoming study spaces.

The small discussion classroom configurationenhances student learning.

20 Sternbusiness

Going Longon Stern

H e d g e f u n d f o u n d e r J o h n A . P a u l s o n g i v e s $ 2 0 m i l l i o n

to fund NYU Stern’s faculty research, scholarships, and renovation

John Paulson says he was inspired to begin a careerin finance in the halls of NYU’s College of BusinessAdministration (one of NYU Stern’s earlier incarna-tions), and he has given back to his alma mater inspades. Last winter, Paulson (BS ’78), founder andchairman of Paulson & Co., announced a gift of $20million to Stern. Paulson’s gift will endow two facultychairs – the Alan Greenspan Chair in Economics andthe John A. Paulson Professor of Finance andAlternative Investments – as well as provide significantsupport for the School’s Concourse Project, a majorfacilities renovation (see page 16), and scholarship aidfor undergraduate students.

“We are extremely grateful for John’s support,” saidPeter Henry, dean of NYU Stern. “His generous gift willfurther strengthen Stern’s research capability, particularlyin finance and economics, where we will continue todemonstrate the intellectual leadership that has propelledStern to the forefront of business education institutions.His gift will also provide much-needed scholarships forundergraduate business students. It’s already helped pro-vide our outstanding students with a modernized learningenvironment that matches the high-quality educationalexperience we deliver.”

Paulson founded New York-based Paulson & Co. in1994. A hedge fund management company focusing on

event-driven strategies, it is now one of the largest alter-native asset managers in the world. During the recentsubprime mortgage crisis, Paulson developed a contrarianstrategy that included shorting mortgage-backed securi-ties. It turned into one of the greatest trades in Wall Streethistory. One of his funds grew 590 percent in 2007, andthree others more than doubled their assets. Paulson &Co. now manages more than $30 billion in assets.

A career in high finance wasn’t always in the cards forPaulson. His interest crystal-lized while a student at Stern,when he took a course taughtby John Whitehead, thenchairman of Goldman Sachs.Whitehead invited otherGoldman partners as lectur-ers, including Steve Friedman(later chairman of Goldman) and Robert Rubin (laterchairman of Goldman and then US Treasury Secretary).“This course influenced my career in both M&A and riskarbitrage,” Paulson recalled. “I think M&A is the mostexciting part of investment banking, and risk arbitrage isthe most exciting part of money management.”

Paulson has been an active participant in Stern activi-ties for several years, speaking regularly to students andalumni. In 2006 he became a member of the School’sExecutive Board, then joined the Board of Overseers,which has enabled him to contribute input to theSchool’s curricular initiatives and operations. His insightsinto the School helped shape the objectives of his majorgift. Paulson said: “NYU Stern, like other schools, facesfinancial pressures in the current economic environmentand relies on the support of its alumni. I am grateful forthe education I received at Stern. My hope is that thisgift will advance the School’s mission as a global leaderin business education and economic research, as well asprovide scholarships to gifted students with financialneeds.”

The Stern School will apply $5 million of Paulson’sgift to support two endowed faculty chairs. The firstchair is named for alumnus Alan Greenspan (BS ’48, MA’50, PhD ’77), a leading economist and former chairman

of the Federal Reserve Board. It will be held by A.Michael Spence, nobel economist, who will join Stern inSeptember (page 28).

The second chair, named the John A. Paulson Professorof Finance and Alternative Investments, is held byProfessor of Finance Lasse H. Pedersen, who is the firstprofessor to hold this chair. Pedersen’s award-winningresearch, focusing on how liquidity risk affects securityprices, trading, funding, and risk management, has influ-

enced practitioners and regula-tors as well as academics.

Scholarships for undergrad-uate business students will befunded by $4 million of thegift. These high-merit, high-need students will be known asPaulson Scholars. The first

group of Paulson Scholars will enter Stern in Fall 2010.The remaining $11 million of the gift supports the

Concourse Project, the School’s most significant campusrenovation since consolidating the undergraduate andgraduate programs on Washington Square 22 years ago.The project has modernized classrooms and study spaces,created a more open learning environment, and connect-ed the School’s two primary buildings, the HenryKaufman Management Center and Tisch Hall. Inrecognition of Paulson’s generosity, the School hasnamed the first-floor lobby of Tisch Hall and theSchool’s auditorium in his honor. These spaces areprominent locations for hosting business and policyconferences and serve as central community hubs forstudents and returning alumni.

“John’s support for the Concourse Project and for stu-dent scholarships is particularly meaningful,” said SallyBlount, vice dean and dean of Stern’s UndergraduateCollege. “Our faculty and students deserve to teach andlearn in a physical environment that employs state-of-the-art design and technology that facilitates the net-worked nature of today’s learning community. John’s giftwill also enable more students with financial need topursue their education at Stern, a fundamental priorityfor the School.”

“My hope is that this gift will advance the School’s mission

as a global leader in business education and economic research.”

— John A. Paulson

Sternbusiness 21

Time for BigInsurors acquitted themselves fairly well during the financial crisis, but the

22 Sternbusiness

In March 2009, responding to the financial crisis, 33

professors from the NYU Stern and NYU faculties pub-

lished a collection of 18 policy papers called Restoring

Financial Stability: How to Repair a Failed System

(Wiley, 2009). The collection was subsequently updated

online and now includes a chapter on insurance industry

regulation that derives from a white paper prepared by

four faculty members last fall for a conference Stern

hosted on the subject. One of its authors was John

Biggs, Executive-in-Residence at NYU Stern, who for 10

years was chairman, CEO, and president of TIAA-CREF,

the major pension and investment firm serving higher

education. In November, Biggs met with Eric Dinallo,

Henry Kaufman Visiting Professor of Finance at Stern,

who, as the 39th superintendent of the New York State

Insurance Department, led the state’s role in the 2008

rescue of insurance giant American International Group

Inc (AIG). They discussed whether the recent financial

crisis and the AIG bailout indicate a need for federal

regulation of the insurance industry, such as an option-

al federal charter. Highlights of their discussion follow.

On Regulating the Insurance Industry

John Biggs: The banking model of letting banks be regu-lated by either the federal or state governments seems likea good model for the insurance industry. Most insurancecompanies would prefer state regulation, which they knowand it’s been a good system for them. The very large,national 50-state companies would seriously consider anoptional federal charter, but they ought to go into it care-fully, because you don’t know what you’re going to get witha federal regulator. But it should be optional. We mightmove to a mandatory system as we think through what “toobig to fail” or “too interconnected to fail” means. I also likethe FDIC model pre-collapse of the economy, assessing pre-miums, rather than the state guarantee system. You havestate and federal banks, but one FDIC system that coverseverybody. There may still be a role for the state in caseswhere it’s done a good job dealing with small failures butdoesn’t have the capacity to deal with big failures.

Eric Dinallo: Rationalization is important, but I’m funda-mentally against companies choosing their regulator. Thereshouldn’t be any optionality. It should be like a marriage,not dating. The financial crisis happened in part because ofthis “choose your regulator” approach. That’s what hurtAIG, because it was being regulated at the highest level byan authority that was really supposed to be regulating sav-ings and loans, and only a thousandth of AIG’s balancesheet was that kind of commercial bank. I still don’t seehow you’re going to regulate a company if you don’t under-stand what the dominant business is.

A deeper issue is that... as a society we’re accepting “toobig to fail” in that we’re permitting leverage to be createdin one part of the company off a base of deposits, whetherthey’re insurance policies or bank deposits, which should

Brother?AIG debacle has reenergized the argument for federal regulation

Sternbusiness 23

be separated. The people 70 years ago who came up withthe Glass-Steagall Act [which established the FDIC andprohibited bank holding companies from owning otherfinancial companies], which we abrogated just a few yearsago, had good reasons for not wanting the American publicto essentially be subsidizing an entity’s leveraged bankingactivity. We should be revisiting that.

JB: I absolutely agree with Eric that the AIG choice of itsfederal regulator was an outrageous and egregious exampleof what’s called “regulatory arbitrage.” But I don’t thinkoptionality between a competent state or federal insuranceregulator gives that kind of an arbitrage opportunity. Forinstance, TIAA-CREF found it very clumsy to operatenationally, since we had to get all of our representativeslicensed and products approved in all 50 states. It’simproved, but it’s still difficult. Also our business was pri-marily offering pension plans and annuities, and our princi-pal competitors weren’t other insurance companies butFidelity, Vanguard, T. Rowe Price, and Charles Schwab,which operate under a federal regulator in a very simplestructure. Federal regulators can be very intrusive. Theinsurance companies tried through 15 years of litigation toavoid the SEC’s intrusive role, but once they got there,they found it was livable, and so most major insurancecompanies have an SEC relationship for their products.

ED: This battle about federal versus state regulation ofinsurance has been going on since roughly the Civil War.Some of it is about bringing products to market too slowly.They’ve got to go through the 50-state system, and the factthat we don’t deal with agents in a holistic way, and that thesystem is clunky, are all true. But this crisis wasn’t aboutthat. It was Exhibit A for how well the regulatory system forinsurance performed – AIG’s failures were not on the insur-

ance side, they were on the investment banking side. Noother insurance company has had any serious problems. Infact, you could argue that of the three legs of the financialservices stool, the insurance leg was the only one that did-n’t break. Investment banking got crushed, and about 125commercial banks have been seized. People should under-stand that the capital behind insurance survived prettywell. The regulatory framework and the licensing processare very different questions.

JB: Treasury Secretary Tim Geithner recently referred tothe fact that insurance is a central feature of the wholesafety network for companies, whether it’s auto, commer-cial, or health insurance. I think that’s true but, if so,don’t we need someone in Washington who has actuallydone the difficult regulation of insurers and can stand ona comparable footing with the banking and securitiesregulators?

On AIG, Risk, and Centralized Oversight

ED: AIG was unique. Using their financial products divi-sion, they took their AA or AAA rating and sold it as a formof pseudo-insurance to outsiders. By doing that, they evad-ed the requirement to set up a separate insurance company,a monoline like MBIA or Ambac, whose sole purpose is toinsure municipal debt and structured debt products [andguarantee the timely repayment of bond principal andinterest when an issuer defaults, and provide services to onlyone industry]. You don’t want the contagion infecting aproperty/casualty company’s balance sheet. The predeces-sors in my agency and the New York State legislature weresmart in causing that to be a localized, separate activity, sothat if it did implode, you weren’t taking out the otherhealthy, insurance parts of a company. AIG evaded that by

24 Sternbusiness

setting up a kind of bolted-on bucket shop, where they hadno capital behind their commitments.

JB: I think that’s right but when it comes to the resolutionof a very large failing insurance entity and a source of bail-out funds for one, the state guarantee funds couldn’t cope.I think the state guarantee funds turned out to be totallyinadequate to deal with the troubles. Certainly the estimatefor the life insurance guarantee fund, which was set up toraise $8 billion in a year, was grossly inadequate – AIGrequired over $100 billion. Then a number of companiesrushed to buy home loan operations or a bank of any kindso that they could be eligible for TARP money. Some weresuccessful at becoming eligible and two actually did drawdown billions. I believe the state regulators should havechallenged The Hartford on the basic imprudence of believ-ing their statutory capital was adequate for them to becomeeffectively a guarantor of stock market returns on their vari-able annuity business. They guaranteed returns, death ben-efits; if the benefits were below a certain level, they actual-ly guaranteed levels of income. Unlike the banking system’sFDIC where the cost of a bailout has to be absorbed by thebanking business, the state guaranty funds reduce taxes onthe insurers to fund the losses, thereby passing the costdirectly back on the taxpayers.

ED: You should ask where that money went. I’m pretty sureit didn’t flow into their insurance operating companies. Thereal test is whether the insurance companies are solvent.What bothered me about the program with the insurers andTARP (no New York insurance companies took any TARPmoney) is that that money stayed at the holding companyand was going to be used for either stock price support,M&A, or to keep the rating up. I still say, overall, the insur-ance regulatory regime on capital requirements worked bet-ter than any other regulatory regime.

I’ll concede it’s weird how 50 states, somewhat inde-pendently, came out with a better result than a single regu-lator would have apparently come out. Maybe competition’sactually good. Fifty years ago the defense for having 50state regulators, called the theory of plurality, was that youwould get a constant refreshing of best practices. Now thestate regulators are more into consumer protection. So whyare we fixing a system that didn’t break during the mostrecent crisis, that survived on capital regime measurements?We should just stop and ask why the insurance industry andthe regulatory apparatus did so well.

JB: At least we should look at an FDIC type of structure.

ED: I agree that the guarantee fund mechanism for insur-ance needs to be updated. In a true crisis, you probablycouldn’t collect enough money fast enough to do what youwould need to do. You should be paying in up front.

JB: It ends up that the state citizens pay for the problemrather than the insurance industry.

ED: The National Association of Insurance Commissioners(NAIC) has some issues. But it is a fairly robust umbrellaorganization and it could theoretically become like a Self-regulatory Organization (SRO). You could grow the NAICinto something that could be responsive to Congress andtheoretically be a part of the Treasury. The NAIC keptthe capital requirements pretty much right, and they’vedone consumer protection very well, which the federalgovernment hasn’t.

JB: Consumer protection is a major issue between the bankstotally regulated by the Fed and the state-regulated banks.Many states feel that the federally regulated banks aren’tdoing an adequate job. Getting that right is hard for any ofthese systems, but I think it’s a real strength of the system.If we didn’t have the NAIC, I don’t think there’s any chancethat the state system could survive. They do a good job onindividual asset classification decisions, but there are frus-trations, especially if you’re running a company like TIAA-CREF. Our marketing, advertising, and sales force, about2,000 out of 6,500 employees, has to be licensed in all 50states in order to talk about insurance products to callersfrom around the country. I could never see why the NAICcould not be authorized to provide national producerlicenses and uniform simple product approvals. Now weend up with lots of individual variations on a simple prod-uct design.

ED: The problem is that there are politics over who’s goingto ultimately set the standard. Which state standard isgoing to be the right one? When I first came to the NewYork State Insurance Department, there was a snarkyphrase, 49-1 [the other 49 states vs NY], which was basi-cally code for “the New York State Insurance Department isdifficult.” But a lot of New York’s capital standards and itsapproach ended up being right. In your analysis, it couldmean a race to the bottom. Which state becomes the stan-dard for this product approval, or that license, or that cap-ital requirement? You arguably end up with different prod-ucts and a very lengthy licensing process, which in moderncapital markets is odd, especially for something like lifeinsurance. You could argue about car and home insurance,because what happens in Florida might be different fromwhat happens in Nebraska. But people die the same wayeverywhere, so life insurance should be totally portable.

On Being Too Big to Fail

JB: If you had a life insurance company with $200 billionin assets that failed to meet its commitments, the damage tothe country would be extraordinary. I was on the lifeinsurance committee working on an appeal of Glass-Steagall, and the one thing we insisted on was that no

“I talk about standing on top of AIG and looking down. My view is weneed somebody who does that all across our financial landscape.”-Eric Dinallo

Sternbusiness 25

bank could ever own a life insurance company. What theydid, which I thought was better than nothing, was to saythat it has to be in a holding company and the FederalReserve has to oversee that. My own hunch is that theFederal Reserve will save the banks before they’ll save theinsurance companies.

ED: My definition of “too big to fail” relates to any institu-tion that sells a product for which we expect a rock-solidunderstanding that there will be payment upon obligation.That’s commercial banking and insurance. The state systemon insurance and the federal system on banking offer thatguarantee. The government entities will step in and makegood on those obligations. That’s what “too big to fail” endsup becoming. I can see that they could be too big to fail,even on a state level. But that’s not systemic risk.

JB: Don’t forget, the state guarantee system is also used asa resolution authority, like the FDIC, and it does an ade-quate job. The FDIC already handled 180 companies byNovember, which would be an extraordinary number for thelife insurance industry, which never has more than three orfour a year.

ED: There is a distinction between resolution authority andguaranteed funds. Guaranteed funds are the money to bailthings out, basically, or the ability to pull the money, whichis one of our problems. The resolution authority can comein, seize the company, and unwind it. The resolution mech-anism is adequate, though it’s never really been tested. Butagain, remember that a normal insurance company diesslowly, unless it has a huge property exposure, for example,where suddenly a hurricane wipes everything out. In gener-al, it’s about writing risk too inexpensively, and then sud-denly the numbers start coming in, and you realize it’s goingto be a very close call. Generally, the authorities order youto stop writing new business, seize the company, and put itinto runoff – where you’re paying out claims but no money’scoming in. At a bank, you know immediately what yourobligations are, but with an insurance company, it’s still sta-tistically based, so it’s a bit of an art form.

JB: With property and casualty, especially, you get the pre-miums now, and you don’t pay the claims for five or sixyears. You can manage earnings very well, particularly witha big property/casualty business. In the life insurance busi-ness, take, for example, companies that have a huge book oflong-term-care insurance. I think in terms of actuarial judg-ment, you’ve got to guess what molecular biology’s going todo to life 30 years from now. You could end up with somehuge claims. At TIAA-CREF, we had a book of long-term-care business and we assumed long lives and many years innursing homes.

ED: So they didn’t sell it too cheap, like other companies.This is a classic issue and an example of why you need bet-

ter national standards. Some states way underpriced it, andthey have real problems now, because people are livinglonger and no one let the stuff lapse. Many insurance com-panies sold long-term-care insurance that was not wellpriced. State to state, provider to provider, should they havebeen permitted to price that insurance so differently?

On Credit Default Swaps and Regulation

ED: If other companies participated in credit default swaps(CDSs), it wasn’t nearly to the same extent as AIG. Therewas a time that unit was producing huge profits. BuyingCDSs for hedging purposes in a portfolio is very differentthan selling CDSs as a form of insurance, which is what wasgoing on at AIG. You can’t overstate the extent to whichthey accomplished this with almost no capital. They had nomoney to back up their bets. When the company got down-graded, they had to put up tons of collateral, which theydidn’t have. They thought the collateral was going to comefrom the insurance subsidiaries – not a good assumption.With infinite capital they would have done okay. But wedon’t let insurance companies operate that way.

We preempted all the laws that would have made it ille-gal. We said, “You can sell this kind of insurance, and youcan do what used to require capital if you do it as a deriv-ative in an unregulated entity.” One thing we have to decideas a country is, are we going to go back and fix that, or arewe just going to let people continue to do derivatives busi-ness, not as a hedge, but as a primary replication of an obli-gation? Arguably, we have not changed that. We’re going tohave these exchanges and clearing houses, but I’m not surethey are going to be at the right capital level.

JB: I’ve always thought we needed a responsible federalofficial, and you’ll only get that if you have some regulato-ry mechanism there. The proposal the administration hasmade to Congress includes an Office of National Insurance,which will be an information-gathering group. But thedirector is not approved by Congress and would not haveregulatory authority. Regulatory authority is different frominformation-gathering, and the government acknowledgesthat. They’re going to have a group [the Financial ServicesOversight Council] making decisions on systemic risk andtoo-big-to-fail situations. It will consist of eight of the topfederal officials, the SEC chairman, the Federal Reservechairman, and so forth. But there is nobody on that boardwho will know anything about insurance.

ED: I talk about standing on top of AIG and lookingdown. My view is we need somebody who does that allacross our financial landscape. You could argue whether itshould be a single regulator, or this council, but it’s allabout insurance presence. Bottom line: There’s nobody atthe table who knows anything about insurance. That’s nota good thing. ■

“If you had a life insurance company with $200 billion in assets that failed tomeet its commitments, the damage to the country would be extraordinary.”

-John Biggs

26 Sternbusiness

Nanette Byrnes: You did your grad-uate law degree at NYU while youwere simultaneously working full timefor Deloitte. Tell us about your educa-tional background, and your connec-tion to NYU.Barry Salzberg: In 1977 I went toHaskins & Sells, a predecessor toDeloitte, and I started in the tax practiceimmediately even though I really didn’thave any tax background. In 1978,knowing that tax was really what I want-ed to practice, I was accepted here to getmy master’s of law and tax. I earned mydegree while working full-time at H&S,which subsequently became DH&S.Early in my career, I worked back andforth between audit and tax so I couldget the experience necessary to becomea CPA in New York in addition to beinga lawyer. I was combining theaccounting degree, the law degree,and the LLM just to practice tax in theprofessional services profession.

NB: Were there formative experiencesearly on in your career that gave you theidea that perhaps someday you could beheading up the firm?BS: Maybe even well into being a part-ner at Deloitte, being CEO of Deloittewas the farthest thing from my mind. Iwas most interested in serving clients,developing my technical skills, andenjoying the day-to-day practice of tax.It took many years of working within thefirm, understanding what I could con-tribute, and being received well by thepartnership for what I contributed beforeI even had an idea that perhaps I couldbecome CEO.

NB: Was there a mentoring relation-ship that was important to yourdevelopment?BS: Fortunately, I was able to have oneor two mentors. One in particular figuredout that I needed to broaden my experi-ence base within Deloitte in order tocreate a credible résumé for future lead-ership positions. He masterminded a lit-

tle bit of deployment for me to movefrom one part of the organization toanother, all to allow me to gain experi-ence, exposure, and breadth of com-petency so that I’d be well positionedto assume a leadership position. Hewas instrumental in giving me theconfidence and the desire to say,“You know what? I think I could doit.” My advice to everyone is youneed a mentor.

NB: How would you advise peoplewho are still building their careers toseek out mentors?BS: Number one, it can’t be a forcedfit. There has to be a rapport, a rela-tionship that is built up through inter-action. Often both parties benefit.

Number two would be to speak up andseek the person out. My advice wouldbe to be appropriately aggressiveabout seeking that mentor relation-ship. Often it’s the person you workwith because they know you the bestand have the best sense for whereyou can go.

NB: What career development pro-grams does Deloitte have in place? BS: Our focus on career/life fit, calledMCC, for Mass Career Customization,is working extremely well for us. It’s amentoring, career-counseling relation-ship where an employee’s supervisorhas a career-counseling conversationwith him or her, focused on theemployee’s personal situation anddesired career trajectory, and cus-tomizes a plan. We’ve rolled it out

across the entire organization andeven advised clients on it. MCC reallydeals with the heart of retention. Wewill have a program where you cantake time off to pursue personal inter-ests, remain connected to Deloitte,and then come back. We have manyindividuals who create their ownassignment or their own approach tohow they deliver service to our clients.

NB: One of the fairly unique thingsabout Deloitte is that when manyaccounting firms chose to spin offconsulting, you kept those two com-petencies together.BS: Around 2002, all our competitorswere separating their consulting busi-ness from the rest of their firm. The

theory was a reduced addressablemarket because of the Sarbanes-Oxley legislation, and the require-ment that most of the consultingservices that were then providedcouldn’t be provided to attest clientswhile you were doing the audit forthem. We decided that rather thansegment our firm, we would segmentour client base and do a completeflip in terms of where consultingserved its market, from a high per-centage of revenue from attest clientsto revenue almost exclusively fromnon-attest clients, which is where weare today. It has given us tremendousmarket presence and breadth of com-petencies. Because the market todayis buying holistically, all of thattogether, we’ve got a unique competi-tive advantage. It makes us the

Barry Salzberg is CEO of DeloitteLLP, the US member firm ofDeloitte Touche Tohmatsu. DeloitteLLP is a nearly $11 billion firmserving more than 80 percent of theworld’s largest companies withaudit, consulting, financial adviso-ry, risk management, and tax serv-ices. It was ranked the #1 BestPlace to Launch a Career byBusinessWeek in 2009.

A Brooklyn native, Salzberg startedhis career at Deloitte in 1977. Hebecame a partner in 1985 and in2000 assumed full leadership ofthe Deloitte Tax LLP practice,which, during his three-yeartenure, increased its market sharefrom fourth place to first. Salzbergwas appointed CEO of Deloitte LLPin June 2007. He received anundergraduate degree in account-ing from Brooklyn College,a JDfrom Brooklyn Law School, and anLLM in taxation from the NYUSchool of Law.

Barry Salzberg was interviewed onOctober 12 by Nanette Byrnes, asenior writer for BusinessWeek,specializing in corporate financeand management. She also con-tributes to businessweek.com’s“Management IQ” blog, and herwork has appeared in SmartMoney and Financial World and onNational Public Radio.

Barry Salzbergchief executive officer

Deloitte LLP

“Around 2002, all our competitors were separating their consulting business from the rest

of their firm. ... We decided that rather than segment our firm, we would segment our

client base. ... It has given us tremendous marketpresence and breadth of competencies.”

LeadingIndicators

Sternbusiness 27

ket will be different, both in terms ofvolume and the mix of services pro-vided, from assisting in the creationof the product to compliance andoverall consulting.

AUDIENCE QUESTIONSQ: Do you feel that either youraccounting or law background gaveyou the skills you need to succeed as asenior manager or do you feel that youhad to pick those skills up on the job?BS: There is zero doubt that on-the-jobexperiences over a protracted periodgive you the real formula to lead anorganization as complex as mine. Youneed the educational foundation, butthen you need practical experience. Weneed to deal with advancing practicalexperience into the education arenaand getting more of the hands-onlearning that positions individuals bet-ter for their first day on the job.

Q: Are consulting companies movingtoward flat-rate billing or alternatives?And do you see that as somethingthat’s an answer to the recession, orsomething that’s here to stay?BS: We create fee arrangements otherthan hourly rates in circumstanceswhere it makes sense, and we will con-tinue to do so. In a difficult economy,it’s an incentive for the buyer becausethey don’t have to literally budget for it.But to me, it’s a one-off. We don’t havea long-term strategy for it, and we’renot moving in that direction simplybecause of the recession. ■

biggest firm in the country, soon tobe the biggest worldwide.

NB: How do you ensure that you don’thave conflicts?BS: It’s really straightforward, becausewe simply can’t provide consultingservices to the attest space. The rest ofthe market is open for consulting, soas long as there are no prohibited rela-tionships between consulting and theattest function, we can serve them. Thegreater issue is business conflict:Because we now serve 80 percent ofthe market between attest and non-attest, there’s inevitably some kind ofbusiness conflict. But we manage thosevery, very carefully.

NB: Where will your growth comefrom?BS: Within the US, first, it will comefrom new services, such as risk servic-es, M&A, and tax-advantaged ERP[enterprise resource planning – anintegrated software solution used tomanage a company’s resources], andwhen different products require a con-fluence of multiple businesses that wecan bring together to provide one serv-ice to the client. Also, certain sectorsare hot – the public sector, healthcare,energy, natural resources – and pres-ent great opportunities. Globally,emerging markets are the fastest-grow-ing – India, China, Brazil, the MiddleEast, Vietnam, and Russia – when itcomes back. We’re figuring out theirgrowth plans and how they couldabsorb huge growth given their sizetoday. For us in the US, if those mar-kets don’t grow, our clients won’t bewell served. We need to invest in thosemarkets in order to be well prepared toserve our existing client base.

NB: Speaking of the economy, are youseeing some increase in demand?BS: Definitely. Our consulting pipeline,a good measurement for us of a recov-ering economy, is better than it was a

year ago and even a year beforethat. We’re also seeing increasedspending by clients. The utiliza-tion our people have in servingclients is pretty good. The issue ismore in pricing, given the envi-ronment and the difficulty ourclients are experiencing, but wesee reasonably good signs of sta-bility. I fear that that will be misin-terpreted as robust recovery,which we don’t see occurring quiteyet. We are forecasting high single-digit growth two years out. In this yearand next, we’re not likely to see thatacross our whole business.

NB: During this period of somewhatslower business, how have you man-aged the talent?BS: Securitization pretty much driedup, so most of our securitization peo-ple were redeployed to our capital mar-kets consulting group and retrained.M&A slowed up, and a number of ourM&A individuals were redeployed torestructuring, which picked up.International tax became a very hotarea for us, so we redeployed other taxprofessionals to take advantage of that.We did align head count to match thereduced demand, but our strategy iswhat I call “hug the keepers,” tomake sure that all the people withus today remain gainfully engagedand motivated.

NB: What is the biggest challenge forthe firm besides the economy? BS: The supply side is an issue as weforecast out a few years. We’re con-cerned there won’t be enough gradu-ates wanting jobs with us. We have todeal with how we get the very bestpeople to join us.

NB: How far along do you think we arein coming to global standards of doingbusiness in these professions? BS: We are far away from it becominga reality.

NB: Do your customers ask for that?BS: Some. A number of clients fileunder multiple systems. There is a lackof comparability between financialstatements of companies within thesame industry sector based on wherethey’re located in the world. But get-ting to a global standard is costly andtime consuming, and a number offolks don’t want it. But I suspect wewill get there.

NB: Part of the fallout of Sarbanes-Oxley was the creation of the PCAOB.What is it like to deal with an inde-pendent regulator for the first time inthe profession’s history?BS: We believe it’s a good thing forthe profession and the capital mar-kets. We totally support being regu-lated in that regard. But it’s intense –a daily challenge.

NB: Do you think that financial state-ments have been improved by theprocess?BS: Absolutely. The number of restate-ments that occurred pre-Sarbanes-Oxley and PCAOB formation versustoday is dramatically down.

NB: How do you feel the securitizationmarket is going to evolve?BS: The volume will be dramaticallydifferent. I sense securitization will notbe eliminated as a process or product,but I do think it will be materially dif-ferent. Consequently, the nature ofwhat a firm like ours does in that mar-

BusinessWeek Senior Writer Nanette Byrnes questioned Deloitte’s Barry Salzberg about hiscompany’s strategy at a CEO Series event held at NYU Stern in October.

28 Sternbusiness

Prospectus

Nobel Laureate A.Michael Spence will join thefaculty of NYU Stern as theAlan Greenspan Professor ofEconomics in September.Spence is a senior fellow atthe Hoover Institution andthe Philip H. KnightProfessor Emeritus ofManagement in theGraduate School of Businessat Stanford University.

“Mike, through his broadportfolio of activities, all performed at the highestlevel, and fundamentally propelled by deep aca-demic expertise, embodies the kind of integrativethinking that NYU Stern continues to bring tobear on the complex problems of business in the21st century,” said Dean Peter Henry.

Spence, whose scholarship focuses on economicpolicy in emerging markets, the economics ofinformation, and the impact of leadership on eco-nomic growth, is chairman of the independentCommission on Growth and Development, a globalpolicy group focused on strategies for producingrapid and sustainable economic growth, and reduc-ing poverty. He also serves as a consultant toPIMCO, as a senior adviser at Oak Hill InvestmentManagement, and as a member of the board of theStanford Management Company as well as a num-ber of public and private companies.

A Rhodes Scholar and the recipient of manyhonors and awards, Spence was awarded theNobel Memorial Prize in Economic Sciences in2001 and the John Bates Clark Medal from theAmerican Economics Association in 1981. He isthe author of three books and 50 articles, and isa member of the American Economic Associationand a fellow of the American Academy of Artsand Sciences and the Econometric Society.

Spence served as Philip H. Knight Professor anddean of the Stanford Business School from 1990 to1999. Before that, he was a professor of economicsand business administration at Harvard University,chairman of its economics department, and dean ofits Faculty of Arts and Sciences.

Glucksman Inst i tute AwardsResearch Prizes to Stern Facul ty

When NYU Stern’s Glucksman Institute for Research in Securities Marketsawarded its annual prizes for excellence in financial research in February, thefirst-place prize of $5,000 went to Professor of Finance Viral Acharya for hisco-authored paper, “Rollover Risk and Market Freezes.” The paper presents amodel that can explain why the market for short-term, secured borrowingagainst finitely lived assets can collapse suddenly even when there is only asmall change in credit risk, as witnessed during the crisis of 2007-2009.

Professor of Finance Jeffrey Wurgler took second place and $2,500 forhis co-authored paper, “A Reference Point Theory of Mergers andAcquisitions.” The study shows that the use of judgmental anchors or refer-ence points in valuing corporations affects several basic aspects of mergerand acquisition activity including offer prices, deal success, market reaction,and merger waves.

Honorable mention and $1,000 went to David Backus, Heinz RiehlProfessor of Finance and Economics, for his co-authored paper, “DisastersImplied by Equity Index Options.” The paper uses prices of equity indexoptions to quantify the impact of extreme events on asset returns.

Citi Leadership and Ethics ProgramSelects Women’s World Banking CEOIskenderian as Distinguished Fellow

Tackling the world’s most intractable socialproblems through market-based approaches is thetype of study NYU Stern’s Citi Leadership andEthics Program, managed by the School’s Markets,Ethics and Law Program, was created to explore.Marking its seventh year with funding from the CitiFoundation, the program appointed Mary EllenIskenderian, president and CEO of Women’s World

Banking (WWB), the world’s largest network of microfinance institutions andbanks, as this year’s Distinguished Citi Fellow in Leadership and Ethics.

Iskenderian is considered a leading voice for women’s leadership and par-ticipation in microfinance and is a strong advocate for the role of capital mar-kets in the sector. She joined WWB in 2006, bringing more than 20 years ofexperience, largely from the private sector arm of the World Bank, in buildingglobal financial systems throughout the developing world. New York-based,she heads a global team that provides hands-on technical services and strate-gic support to 40 top-performing microfinance institutions and banks in 28countries in Africa, Asia, Eastern Europe, Latin America, and the Middle East.The WWB network reaches more than 20 million clients, of who 74 percent arepoor women entrepreneurs. Iskenderian recently keynoted the Citi Program’sannual spring conference for Stern students and alumni.

A. Michael Spence, NobelEconomist, to Join NYU Stern

Sternbusiness 29

and developed since the 1930s and whatthe future holds for Wall Street. A formerpartner at Goldman Sachs for more than20 years, Smith provides an insider’slook at the people who have shaped theUS market economy for the last 60years, from the Goldmans, Sachses, andLehmans through to Richard Fuld, HenryPaulson, and Tim Geithner.

Lawrence White, Arthur E.Imperatore Professor of Economics, tes-tified late last summer in both the USSenate and House of Representativesabout credit rating agencies. Before theSenate Committee on Banking, Housing,and Urban Affairs, he proposed that law-makers eliminate regulatory reliance onratings and urged more competition.Before the House Committee onOversight and Government Reform, hetestified about the role of credit ratingagencies in the recent financial crisis,their danger to investors, and whetherthe agencies should be regulated. Healso testified before the HouseCommittee on Financial Services regard-

ing the Community Reinvestment Act,describing the act’s shortcomings andoutlining a more effective way toachieve its goals.

At the Federal Reserve Bank of NewYork in August, Finance ProfessorsViral Acharya, Lasse Pedersen,Thomas Philippon, and MatthewRichardson presented their work,“Regulating Systemic Risk.”Additionally, Acharya delivered an

address titled,“Too Big to Fail,Too Big toManage, or JustToo Big?” dur-ing a CentralBankingSeminar at theNew York

Federal Reserve in October. He thenpresented his co-authored book,Restoring Financial Stability: How toRepair a Failed System (Wiley, 2009), atthe Swiss Finance Institute annualmeetings in Zurich, Switzerland, in

Dolly Chugh, assistant professorof management and organizations, was

announced as afinalist of the2009 FacultyPioneer Awardsby The Centerfor BusinessEducation at theAspen Institute.

This annualrecognition program honors businessschool instructors who have demon-strated leadership in integrating ethical,environmental, and social issues intothe MBA curriculum.

Kenneth Langone Professor ofFinance Roy Smith published a newbook, Paper Fortunes: Modern WallStreet; Where It’s Been and Where It’sGoing (St. Martin’s Press, January2010), that offers investors and averagereaders alike a better understanding ofhow the financial industry has grown

November. He presented his researchpaper, “Precautionary Hoarding ofLiquidity and Inter-Bank Markets:Evidence from the Sub-Prime Crisis,”at the European Central Bank confer-ence on Monetary Policy in Frankfurt,Germany, in December.

In August, Clinical Professor ofEconomics andDirector of theCenter forJapan-USBusiness andEconomicStudiesEdwardLincoln was

part of a group briefing Ambassador-designate to Japan John Roos. Lincolnprovided background on Japan’s eco-nomic situation and the economicissues that the Ambassador-designatewould likely face as the governmentregime changed in Japan.

s h o r t t a k e s

Dolly Chugh

Edward Lincoln

Viral Acharya

Ghose’s research proposal, “Modelingthe Dynamics of Consumer Behaviorin Mobile Advertising and MobileSocial Networks,” aims to examinehow firms can measure and managethe economic value created by mobilephone-based user-generated content.Sundararajan’s proposal, “The Breadthof Contagion of the Oprah Effect:Measuring the Impact of Offline MediaEvents on Online Sales,” authoredwith alumna Gal Oestreicher-Singer (PhD ’08), a professor atTel-Aviv University, studies the conta-gion that offline media events inducein online networks and the ensuingchanges in patterns of productdemand, media consumption, andsocial interaction.

Also, two ofGhose’s researchpapers on spon-sored searchadvertising, co-authored withSha Yang,associate pro-fessor of mar-

keting, were selected as two of the“Top Search Marketing and SocialMedia Research Projects of 2009”

Anindya Ghose, assistant pro-fessor of information, operations, andmanagement sciences, and a team offour professors from NYU and NYU-

Poly wereawarded a$2.124 million,three-year grantfrom theNational ScienceFoundation(NSF) to supportan inter-discipli-

nary program, “ASPIRE: An SFSProgram for Interdisciplinary Researchand Education.” The NYU-wide collabora-tive program focuses on identifying andproviding practical, cost-effective solu-tions to security and privacy problems onthe Internet and other critical informationinfrastructure from technical, ethical, poli-cy, and business perspectives.

In addition, Ghose and ArunSundararajan, associate professor ofinformation, operations, and manage-ment sciences and NEC Faculty Fellow,were both granted Google & WPPMarketing Research Awards. As part ofthese prestigious awards, they willreceive $75,000 and $65,000, respec-tively, to support their latest research.

r e s e a r c h r o u n d u p Acharya and his co-authors received a 10,000 euro grant from the BNPParibas Hedge Fund Centre at HECParis for their paper, “Seeking Alpha:Excess Risk Taking and Competition forManagerial Talent.”

Assistant Professor of FinanceMarcin Kacperczyk, AssociateProfessor of Finance Stijn VanNieuwerburgh, and Associate Professor

of EconomicsLaura Veldkampwere awarded a Q-Group ResearchAward of $10,000for their project,“Attention AllocationOver the BusinessCycle.”

The Accounting Foundation of theUniversity of Sydney presented Professorof Accounting Joshua Ronen with the2008 Abacus: A Journal of Accounting,Finance and Business StudiesManuscript Award of $10,000 for hispaper, “To Fair Value or Not Fair Value: ABroader Perspective,” at the AmericanAccounting Association Conference.

Professor Alexander Ljungqvistwas appointed the Ira Rennert Professorof Finance and Entrepreneurship in 2009,and received the 2009 NYU TeachingExcellence Award.

by WordStream, which conducted a sur-vey of publications that can have amajor industry impact.

Sinan Aral, assistant professor ofinformation, operations, and manage-ment sciences, has been recognized bythe NSF with its Faculty Early CareerDevelopment Award (CAREER). As partof this prestigious award, he will receive$475,000 to support his latest research,which will utilize data on online socialnetworks to assess peer influence inproduct adoption and demand, and willdetermine how best to target peer-to-peer distribution by developing andapplying new statistical techniques thatdetect where there is peer influence ver-sus self-selection, homophily, and con-founding factors in the distribution. Hisresearch will also develop network-based models of the diffusion of behav-ior change in social networks, and vali-date these models using empirical dataon social relationships and health-relat-ed behaviors from five massive net-worked datasets.

Professor of Finance ViralAcharya and Nobel Laureate FinanceProfessor Robert Engle received a$10,000 grant from Q Group ResearchCommittee for their proposal, “Anatomyof Trading and Liquidity in the CreditDefault Swaps Market.” Additionally,

Sha Yang

Laura Veldkamp

Anindya Ghose

30 Sternbusiness

BRAVE NEW

WORLD

Sternbusiness 31

T h e I n t e r n e t i s y i e l d i n g

va s t t r e a s u r e s o f d ata f o r

c o m pa n i e s a s t h e y e x p l o r e

n e w way s t o r e a c h c o n s u m e r s ,

s h a p e t h e i r m a r k e t s , a n d

o p t i m i z e t h e i r way s o f

d o i n g b u s i n e s s

By Marilyn Harris

In just one short decade, the Internet has caused major disruptions in a numberof industries and continues to transform our lives in radical ways. If our age is allabout communication, the Internet is both its 24/7, omni-directional switchboardand collective memory bank, where individuals can “talk” to friends and giant cor-porate entities, review products and services, complain, offer praise, or get virtuallyany question answered at any time. The Internet is a powerful new platform on whichthousands of new businesses are being enabled, and ordinary people are becomingempowered in unprecedented ways.

Methodologies from academic research are beginning to emerge that demon-strate how to think about the enabling potential of the Internet from a business per-spective. The four provocative papers excerpted here – written by information sys-tems faculty in NYU Stern’s information, operations, and management sciencesdepartment – demonstrate several of these new ways of utilizing the wealth of infor-mation provided by the Internet. Assessing how companies and consumers com-municate with each other and, in the case of consumers, with one another, is oneaspect; how to make sense of market forces in the online space is another. As muchas businesses will be interested in this research, its implications, in some instances,reach beyond the commercial realm. Understanding how people form networks,influence each other, disseminate news and information, handle finances, and makepurchases is also invaluable to governments, social service agencies, the military,and intelligence agencies, to name a few.

32 Sternbusiness

to contain true social networks,where the members actually knowone another, at least online –which, taking into account theexisting body of knowledge about

consumer behavior, wouldlikely explain their sharingan interest in the samebrands. “The notion oftargeting social networkneighbors resonates withbrand advertisers becausethey believe that the per-sonal networks of thosealready exhibiting brandaffinity should be good tar-gets for brand advertising,”says Provost.

Like-Minded ConsumersTo conduct their research,

the authors used data on vis-its to social networking sites.A basic tenet they relied onto identify subsets of userswas the notion of homophily– that social relationshipstend to be made betweenpeople with similar charac-teristics – which can beleveraged to improve target-ed direct marketing. Usingthis theory, they evaluatedbrand-affinity data for morethan a dozen well-knownnational and internationalbrands. Using cookies thatadvertisers collect to chartthe visits of people browsingpages of “user-generatedmicro-content,” such asFacebook, non-professionalblogs, and the like, theresearchers were able to

identify what they called quasi-social networks. Within those net-works they tested two sets ofbrands, one advertised and one not,and observed the resulting actiontaken by the audiences within the

pple Computer madeadvertising history in1984 with its bold, tele-

vised Super Bowl commercial show-ing an unnamed heroine smashing agiant screen, the symbol ofan Orwellian “Big Brother”authority figure. Tomorrow’sbrash newcomer mightdecide to get its brand mes-sage out in a more targeted,cost-effective – and measur-able – fashion: by floodingnetworks of like-mindedWeb users with branded dis-play advertising. The tech-nology exists to accomplishthis targeting strategywhile still safeguardingconsumer privacy, accord-ing to new research byNYU Stern ProfessorFoster Provost and his co-authors Brian Dalessandro,Rod Hook, Xiaohan Zhang,and Alan Murray. “Onlinebrand advertising has ahuge opportunity forgrowth,” says Provost.

The research, publishedas “Audience Selection forOnline Brand Advertising:Privacy-Friendly SocialNetwork Targeting,” is oneof the first papers on datamining for online brandadvertising, according tothe authors . I t showsunambiguously that adver-tisers can extract anony-mous information aboutconsumers’ Web-brows-ing habits, and from thatinformation build a groupthat is likely to be interested in andmotivated by specific brand adver-tising – without compromisingthese individuals’ privacy.

The paper makes several impor-tant contributions. It provides a

framework for evaluating whichaudiences would be viable targetgroups for brand advertising; intro-duces methods for identifying theseaudiences without collecting any

personal information about them;shows that people who exhibit cer-tain online interests in common alsoshare an affinity for the samebrands; and provides evidence thatthese target audiences often turn out

DOUBLE-CLICK TO FIND YOUR

AUDIENCEADVERTISERS CAN MINE ANONYMOUS

INTERNET DATA TO IDENTIFY AUDIENCES

FOR TARGETED BRAND ADVERTISING

A

Sternbusiness 33

seems finally to have been realized– which makes the privacy-friendlytechniques described by this paperso totally compelling.

FOSTER PROVOST is professor of infor-mation systems and Daniel P. PaduanoFaculty Fellow (Emeritus) at NYU Stern,and NEC Faculty Fellow. BRIANDALESSANDRO (MBA ’08) is director ofdata mining and statistical analysis atMedia6˚. ROD HOOK is chief technolo-gy officer at Media6˚. XIAOHAN ZHANGis a PhD candidate at NYU Stern.ALAN MURRAY is a partner at CoriolisVentures. This research project wonthe 2009 INFORMS (Institute forOperations Research and theManagement Sciences) Design ScienceAward, which is given to promote andrecognize research efforts centered onthe design and realization of innovativeinformation technology artifacts.

identified networks. The resultsshowed that the quasi-social net-works exhibited markedly higherbrand affinity.

Both advertisers and consumerswould benefit from better designedonline brand advertising, theauthors argue. Spending advertisingdollars on display ads with the aimof getting people to click through toa purchase, for instance, may not beespecially efficient, because con-sumers aren’t looking at display adswith an immediate transaction inmind; the display format is bettersuited for brand advertising. Theauthors also cite studies that chart aclear correlation between con-sumers’ viewing of online brandadvertising and an increase in boththeir subsequent online and offline

purchases, well into the future. Oneof the practical implications of thispaper: If advertisers can use anony-mous Web data to identify the righttarget audiences, they will get thekind of measurable return on theirinvestment they seek. In addition,says Provost, designing better dis-play ads and selecting more appro-priate audiences “may have a sub-stantial impact on social welfare: theaccess to a large amount of free con-tent online is due largely to (thehope for) sponsorship by displayadvertising.”

With the extensive, apparentlyconstant mining of data that hasbeen made possible by the Internet,the Big Brother image that was sopresciently borrowed a quarter ofa century ago by Apple Computer

READING BETWEEN THE LINESCUSTOMER REVIEWS OF INTERNET SELLERS REVEAL A WEALTH OF INFORMATION THAT CAN

IMPROVE THE ONLINE RETAIL EXPERIENCE ON BOTH SIDES OF THE TRANSACTION

nline consumers haveit good: a seeminglyinfinite array of choic-

es and helpful user reviewsthat rate not just the productsthemselves but the reliabilityof the seller. Yet the advan-tages of the electronic mar-ketplace aren’t all to thebuyer. Abundant, real-timecustomer feedback helpsbusinesses refine their prod-ucts and services. More thanthat, according to a newpaper by three NYU Sternprofessors, a sophisticatedanalysis of consumer reviewscan help sellers adjust theirprices and boost revenue.

Anindya Ghose, Panagiotis G.Ipeirotis, and Arun Sundararajan,of Stern’s department of informa-tion, operations, and managementsciences, analyzed how differentaspects of a seller’s reputationaffect pricing power in “TheDimensions of Reputation inElectronic Markets.” The motiva-tion for this study, the authorswrite in their paper, is that whenbuyers purchase products in anelectronic market, they assess andpay not only for the product theywish to purchase but for a set offulfillment characteristics as well:packaging, timeliness of delivery,the extent to which the productdescription matches the actual

O

34 Sternbusiness

product, and the reliability of settle-ment. Unlike in traditional bricks-and-mortar stores where buyer andseller are both physically presentand the buyer has cues that helphim determine the retailer’s fulfill-ment characteristics more easily, inelectronic transactions reputation isof paramount importance – to bothsides. The data unearthed by thisresearch can lead to animproved, more efficientexperience for all concerned.

The professors devised atext mining technique toidentify and structure thedifferent dimensions thatcomprise a seller’s reputa-tion – those aspects of theonline buying experiencethat customers considerwhen they contemplate apurchase. Their universewas the feedback regarding the rep-utation of each seller who partici-pated in at least one of about 9,500transactions for the sale of pack-aged consumer software onAmazon.com. Next, these dimen-sions are used to estimate a series ofeconometric models that link rep-utation to the premium a sellercan reasonably charge. “We findthat different dimensions doindeed affect pricing power dif-ferentially, and that a negativereputation hurts more than apositive one helps on somedimensions but not on others,”says Ghose. Ultimately, theauthors explain how sellerscould use a version of this analy-sis to explore whether they havepriced their products correctly,based on how much consumersvalue their particular distin-guishing strength – e.g., rapid,

The tools for sellers would enablethem to assess the value of their ownreputations along each dimension,potentially comparing their reputa-tions with those of competitors. Thetactical goal would be to enable sell-ers to price their products at a levelthat incorporates the value of theirreputation relative to competitors.The system could also increase the

seller’s confidence that she ismaking a sale at the rightprice point, without leavingmoney on the table. Theexample the professors useshows a Canon Powershotx300 sold by six onlineretailers at different prices,with each seller’s reputationquotient computed. Itreveals that the seller inquestion, based on his higherreputational score, could

charge an additional 5 percent.The broader strategic purpose of a

marketplace system for sellers is thatif they can understand the specificcharacteristics that customers valueabout them – and others – they willbe able to sharpen their performanceon their best dimensions and developother areas that customers value. Theinterdisciplinary methods used in thisresearch to find the economic value ofuser-generated content have wide-ranging applications in diverse indus-tries such as healthcare, travel, andfinancial services.

ANINDYA GHOSE is assistant professor ofinformation, operations, and managementsciences at NYU Stern. PANAGIOTIS G.IPEIROTIS is assistant professor of infor-mation, operations, and management sci-ences at NYU Stern. ARUN SUNDARARAJANis associate professor of information, oper-ations, and management sciences at NYUStern and NEC Faculty Fellow.

free shipping – versus competi-tors’ offerings.

Putting Theory into PracticeThe implication of the authors’

work is that it is possible with theirinsights to enhance both buyer trustand seller efficiency in an onlineenvironment. Practically speaking,to accomplish this, they describe

how to construct analytic tools forboth buyers and sellers. The buy-ers’ tool would enable buyers toemploy drop-down menus to effi-ciently search the electronic marketfor sellers that satisfy particular cri-teria on each fulfillment dimension.For example, a buyer shopping foran expensive digital camera wouldbe able to select for sellers whoexcel on the packaging dimension,even if the seller doesn’t featurerapid shipping. A more sophisticat-ed tool would enable users to sortsellers on more than one dimension.Such a system, write the authors,“can enhance buyers’ trust by mak-ing them aware that their feedbackis important and is taken intoaccount by other customers in amore nuanced way [and] will makereputation systems that enhancetrust a more prominent part of thecurrent electronic marketplace.”

“The broader strategic purpose of a marketplace system for sellers is that

if they can understand the specific characteristics that customers value

about them – and others – they will be able to sharpen their performance on

their best dimensions and develop otherareas that customers value.”

Sternbusiness 35

ver notice that sud-denly it seems as ifeveryone in a partic-

ular peer group has acquireda particular cool, new item?A Ping putter, an iPhone,Birkenstocks, a Prius. How isthat possible? And why did-n’t you get the memo?Recent research, by SinanAral, Lev Muchnik, andArun Sundararajan of NYUStern’s information, opera-tions, and management sci-ences department, came to acounterintuitive conclusion:There wasn’t any memo.

While it’s true that youmay pick up a new golf clubor a fun new smartphonebecause your friends are rav-ing about them, the researchers foundthat the interests and characteristicsyou share with those friends – alongwith millions of strangers – may bet-ter predict your next purchase. Infact, according to the paper,“Distinguishing Influence BasedContagion from HomophilyDriven Diffusion in DynamicNetworks,” such commoncharacteristics and behaviors,known as homophily, explainmore than 50 percent ofproduct adoption decisions.

This information isimportant most obviously for com-mercial reasons: How do you influ-ence people to buy your product? Asmuch as these insights will helpmarketers, they will be invaluablein noncommercial applications.Whether the issue is disease, obesity,

smoking, delinquency, or poverty,the networks of interactions amongindividuals provide the primarypathways along which viral conta-gions spread. Aral points out,“Understanding the mechanismsthat drive contagions in networks,

and our knowledge of how to prop-agate or combat them, has utility indomains as diverse as epidemiology,development economics, and publichealth.”

The Internet with its social net-works supplies an unprecedented

abundance of data forresearchers. In this case, theauthors studied the adoptionover a period of five months of anew Yahoo! mobile service appli-cation called Yahoo! Go. Theiruniverse consisted of the 27.4million users of Yahoo.com’sinstant messaging service andincluded more than 14 billionpage views, with 3.9 billion mes-sages sent among 89.3 milliondistinct relationships.

Great Minds Think AlikeThe problem the authors

faced was how to distinguishbetween product adoption deci-sions made as a direct result ofpeer influence – i.e., friendstelling friends to sign up for the

service – versus such decisions beingindicative of homophily – the demo-graphic, technological, behavioral,and biological similarities of peopleon the network. Homophily wouldimply that like-minded people grav-itated toward the same product.

The solution was toestablish a methodologythat controlled for peerinfluence and random “con-founding factors.” Theresults showed that previousinvestigations overestimatedpeer influence by 300 per-

cent to 700 percent and that, morethan 50 percent of the time,homophily is the reason peoplechose to sign up for the Go service.“These findings demonstrate thathomophily can account for a greatdeal of what appears at first to be a

HEARD IT THROUGH THEGRAPEVINE?

DISCOVERING HOW INFORMATION SPREADS THROUGHOUT ONLINE NETWORKS

E

“These findings demonstrate thathomophily can account for a great

deal of what appears at first to be acontagious process.”

36 Sternbusiness

contagious process,” says Aral.Naturally, the authors write, there

are limitations to their research,largely having to do with unobservedfactors, such as exposure to advertis-ing among friends or informationfrom common unobserved friends.They also suggest that futureresearch could examine the effects ofpeer influence versus homophilywhen the product being adopted has

what is called a direct networkexternality, in that the more peoplehave it, the more value it has – suchas the telephone.

Still, the implications forresearch and policy arising from thisstudy are far-reaching. Discovery ofthe mechanisms that drive conta-gions is critical for estimating theeffectiveness of viral marketing,promoting health-related behavior

change in large populations, andmanaging contagions in networks.

SINAN ARAL is assistant professor ofinformation, operations, and manage-ment sciences at NYU Stern. LEV MUCH-NIK is senior research scientist of infor-mation, operations, and managementsciences at NYU Stern. ARUN SUN-DARARAJAN is associate professor ofinformation, operations, and manage-ment sciences at NYU Stern and NECFaculty Fellow.

so-far-fetched scenarioin their recent paper,“Sponsored Search andMarket Efficiency.”The paper argues thatsponsored search mar-kets are akin to finan-cial markets in theirearly days, where newinformation made itsway into prices rela-tively slowly and par-ties with early access toinformation enjoyedsignificant advantages.Dhar and Ghose arguethat the same is cur-rently true for spon-sored search marketsin that keywords areoften mispriced rela-tive to their true mar-ket value.

The Holy Grail ofon l i n e sponso redsearches is determiningwhich keywords will

attract consumers. As the Internetcontinues to evolve into a majorvenue for commerce, the science ofthe sponsored search – the mecha-

f you were a hugeonline supplier oftennis gear, would

you buy futures on asearch engine so thatyour ad would pop upfirst when tennis fanssearch “US Open” inSeptember 2010? In the-ory, that kind of futuresmarket could very wellemerge, just as it did forcommodity products ofwide interest to investors.The conditions necessaryfor such a sponsored-search futures marketwould be identical tothose in financial mar-kets: liquidity, and trustthat market makerswould indeed deliver ontheir obligations. And ifthe counterparty in sucha transaction is highlytrustworthy, an insurancemarket could alsoemerge, allowing institu-tions to “sell insurance” to advertis-ers, guaranteeing them future pricesfor keywords and allowing for the

same type of hedging made possibleby futures and options markets.Stern professors Vasant Dhar andAnindya Ghose described this not-

I

WORD GAMESCOMPANIES THAT SPONSOR ONLINE SEARCHES CAN FIND GUIDANCE ON PRICING

AND MARKET BEHAVIOR IN THE FINANCIAL MARKETPLACE

Sternbusiness 37

nism whereby advertisers pay a fee toInternet search engines to be dis-played alongside organic (non-spon-sored) Web search results – continuesto evolve as well. Dhar and Ghoserealized that the sponsored searchmarketplace could be compared tothe financial marketplace and pre-dicted that the former can be expect-ed to evolve in similarways – with practicalimplications for advertis-ers. “Our central thesis isthat the increasing avail-ability of informationthrough IT-enabled plat-forms that promote user-generated content willmake sponsored searchmarkets more efficient inthe same way thatgreater access to infor-mation through IT made financialmarkets more efficient over time,”the professors state in their paper.

The authors point out that finan-cial exchanges and sponsored searchmarkets share several common char-acteristics. Both are auctions withsimilar business models. Bothrequire membership, through whichan exchange controls risk, such asthe ability of members to make goodon their obligations in a transaction.A central objective of financialexchanges is to provide deep liquidi-ty, typically measured in terms ofvolume transacted. Indeed, theirprofitability is driven by volumesince they earn commissions basedon the number and size of transac-tions. Like financial exchanges,sponsored search markets – current-ly provided by the search engines –are also interested in increasing vol-umes and profitable transactions.They try to accomplish this goal bymaking searches more relevant totheir visitors. Advertisers are inter-ested in reaching the right segmentof buyers while minimizing theirbidding costs.

The two types of marketplacesaren’t fully alike, however. Whereasshares on a financial exchange arecommodities, in that different unitsare the same and therefore of equalvalue, the value of a given keywordcan be expected to vary to eachadvertiser. Also, in sponsored searchmarkets, the sellers bid for rank, not

just to “win” the auction by beingthe highest bidder. Transparencyexists in financial markets, but,because of the labile nature of key-words, it is virtually nonexistent inthe ranking algorithm for searches(which is why the emerging indus-try of search engine optimization isprimarily dedicated to inferringthe ranking criteria in sponsoredsearch advertising).

An Evolving MarketThe market efficiency for spon-

sored searches, similar to financialmarkets, is defined as the time lagbetween the dissemination of infor-mation – in this case, primarilythrough the Web – and its impact onbid prices and advertising costs.Dhar and Ghose predict that pricespreads in the sponsored searchmarket will emulate the evolutionof bid/ask prices on financialexchanges over the past twodecades, as technology like faxesand the Internet facilitated the dis-semination of information. Priceadjustments in response to newinformation have only become

faster: Reaction times in the currentworld of rapid and ubiquitous infor-mation access and algorithmic trad-ing are often measurable in secondsor less. The sponsored search market,however, is still in the phase wherepricing adjusts slowly and liquidity isthin, if increasing. Just as IT facili-tated information access in financial

markets, so it should withsponsored search key-words, especially with theincreasing ubiquity ofWeb 2.0 and the easewith which informationcan currently be createdand accessed.

Modern-day searchengines are already quitegood at determining userintent and are likely toget even better over time,

the professors write. Because of this,the Internet will continue to expandas a marketing channel where adver-tisers can be confident of displayingtheir offerings only when they arelikely to match user intent and lead todesired outcomes. Because behaviorcan be tracked, it makes measurablethe impact of an advertising cam-paign or strategy. This fact has trans-formed sponsored search into a con-tinuous auction market, much likefinancial markets, where sellers arebidding for “space” on the channel.By drawing a parallel between finan-cial and sponsored search markets,accounting for any differences, theauthors show that financial marketsprovide a stable and well-understoodset of concepts useful in the analysisof sponsored search markets. ■

VASANT DHAR is professor and head ofthe information systems group, Daniel P.Paduano Faculty Fellow, and director of theCenter for Digital Economy Research(CeDER) at NYU Stern. ANINDYA GHOSEis assistant professor of information, oper-ations, and management sciences atNYU Stern.

“The increasing availability of information through IT-enabled platforms that promote

user-generated content will make sponsoredsearch markets more efficient in the same

way that greater access to informationthrough IT made financial markets more

efficient over time.”

38 Sternbusiness

To stay ahead of the curve, successfulcompanies have to innovate – think Appleor BMW. With this in mind, Stern’s MBALuxury and Retail Club (LuxRet), in part-nership with Clinical Professor ofMarketing Scott Galloway, co-hosted“Innovation Forum 2009,” an unprece-dented event featuring 17 thought leadersfrom industry and academia whoaddressed the challenges facing luxurybrands today. The forum attracted students, alumni,industry insiders, and press.

Some of the biggest names in the luxury and retailindustries – including Group President of Estée LauderJohn Demsey (MBA ’82), Bart Sayer from the con-sumer media and digital group at Booz & Co., andThe New York Times perfume critic Chandler Burr –offered varied presentations on topics such as celebritymarketing, opportunities in the luxury market, and“The Scent of Innovation,” respectively.

Shimul Shah (MBA ’10), LuxRet co-president,explained how partnering with Galloway was crucialbecause of his industry contacts and his desire toexpose Stern students to industry executives. The pro-fessor had recently launched his Digital IQ study,which ranks 109 brands in 11 categories on the effec-tiveness of their digital competence. Said Shah: “Ourgoal in holding the event was to educate students onthe fast-changing luxury goods industry by hearing abroad, diverse set of perspectives, and to provide net-working opportunities with these professionals.Students were able to interact with executives from anumber of luxury retailers including Chanel, ChristianDior, and Tiffany. Professor Galloway is so well knownin the industry and was a huge factor in helping usbring it all together.”

Tory Diamond (MBA ’10), LuxRet co-president,echoed Shah’s excitement about the event. “I learned

Peer to Peer Student Life in Washington Square and Beyond

The Future of Luxury By Rika Nazem

so much and found the talksincredibly inspiring. The bestpart for me was being able tomeet so many leaders in theindustry and develop rela-tionships with the speakersduring the planning leadingup to the event.”

Both women credit theStern community and theSchool’s commitment to luxury and retail marketing astheir reasons for choosing Stern. Shah said: “I knewthat the supportive environment here was one where Icould thrive and best reach my potential. I also knewthat I wanted to stay in the fashion industry, and itwas important to me to join an MBA program thatsupported that goal. I saw that the club was highly intouch and connected with the industry, as it has hadexecutive speakers from companies such as Saks FifthAvenue and Gap.”

The women now have something new to be excitedabout: a recently approved Luxury Marketing special-ization. Said Diamond, “We worked hard to establishthe specialization and are thrilled that Stern has offi-cially embraced the student body’s growing interest inthe luxury industry.”

To view the video of Innovation Forum 2009, visit:www.luxurylab.org/ ■

NYU Stern LuxRet Co-presidentsShimul Shah (left) and Tory Diamond(right) with former LuxRet Co-presi-dent Daria Burke (MBA ’08);(below) Professor Scott Gallowayspeaks at the Innovation Forum 2009.

Sternbusiness 39

NYU Stern studentsaren’t typically associatedwith film, but this yearevery Stern freshman wastasked with creating avideo as part of theSchool’s Cohort LeadershipProject, and the resultswere impressive. The stu-dents were charged withanswering the question:What is a leader at NYU? The responses were variedand creative. One team used love as a metaphor, anoth-er incorporated inspirational quotes with iconic NewYork City images, and another paid homage to popularfilms such as “The Matrix” and “300.”

The Cohort Leadership Project, a freshman require-ment, focuses on helping students develop foundationleadership skills while acclimating to college life andNew York City. Hands-on experiences such as improvi-sation and personal integrity workshops are typicalactivities. “The video project is our latest initiative toleverage our students’ creativity, help them learn tomanage group dynamics, and bring to life their visionof leadership through action and film,” said SusanGreenbaum, associate dean of Stern’s UndergraduateCollege. “It encourages group problem-solving and at

the same time helps bring the community together in ashared experience.”

Each of the 120 student teams was provided with aFlip mini camcorder. For editing, the teams collaborat-ed with undergraduate film students from NYU TischSchool of the Arts. Upon completion, students voted onthe best videos, which were presented to the entireStern freshman class at the Skirball Center inNovember. The winning video is posted on the College’sYouTube page at www.youtube.com/sternuc.

“Once my group sat down and started brainstorm-ing, it turned into a great creative outlet for me,” saidStern freshman Michael Cafarelli. “We were able toblend a mix of our different interests that, in our par-ticular case, ranged from Miley Cyrus to TheEconomist.”

Many students said they viewed the meaning ofleadership differently as a result of working on thevideo project. “The collaboration was difficult at first,”said Sean Monga, whose team’s video was voted best ofthe freshman class. “But, we learned that leadershipisn’t all about directing, managing, and controlling.”

“It was definitely an experience,” said Leslie Fan,who was also part of the winning team. “We all havepretty different strengths, so coming together as agroup allowed us to create something together thatnone of us could have done individually. Staring up at500 or so people from the stage in Skirball isn’t a badfeeling either.” Next stop: Tribeca Film Festival? ■

If De Nirowere a Freshman…By Joey Schmit

(Top photo) Stern freshmen are organized into Cohorts. (Bottom photo) As part of their Cohort Leadership Project, freshmen wererequired to create videos on the meaning of leadership.

Alumni News & Events

2 3

1

ALUMNI RELATIONS

On December 5, 2009, more than 500 alumni and guests celebrated theholiday season and reconnected with each other and the School duringa festive evening in NYU Stern’s renovated Concourse space.

NINTH ANNUAL NYU STERN ALUMNI BALL& CO N C O U R S E PR OJ E C TRIBBON-CUTTING CEREMONY

(All photos from left to right)1. Mark Bean (MBA ’06), Chair, Alumni Ball Host Committee, AlumniCouncil; Stewart Satter (MBA ’82), Board of Overseers; WilliamBerkley (BS ’66), Chairman, Board of Overseers; Thomas F. Cooley,Dean Emeritus; Sally Blount, Vice Dean and Dean, UndergraduateCollege; Leonard Stern (BS ’57, MBA ’59), Board of Overseers; andJohn Paulson (BS ’78), Board of Overseers

2. Andrea Puglisi; Steven Bensinger (BS ’76), Board of Overseers;John Paulson (BS ’78), Board of Overseers; and Carol Stabb

3. Allison Stern; Thomas F. Cooley, Dean Emeritus; and Leonard Stern(BS ’57, MBA ’59), Board of Overseers

4. Mark Bean (MBA ’06), Chair, Alumni Ball Host Committee,Alumni Council; Samantha Bean; Molly Meek, Alumni Council; and Trevor Schneider

5. Classmates toasted Stern’s newly renovated Concourse space.

6. Julia Hoagland (MBA ’95), Alumni Council, and Eduardo Aguayo(MBA ’97)

7. Alumni danced and mingled at the annual holiday celebration.

8. Meredith and David Little (MBA ’01) with David Dunn (MBA ’99)and Liz Dunn Cohen (MBA ’99)

9. Jane Sadaka (MBA ’80), Board of Overseers, and Ned Sadaka

10. Mary Tanaskovic Bitting (BS ’68, MBA ’71) and Joan Martens(MBA ’75)

11. Janelle and Alan Boomer (MBA ’04), Chair, Alumni Council

12. Marie and Mel Stein (BS ’53), Alumni Council

13. Generations of graduates came together to celebrate their alma mater.

14. Terrence Greene (MBA ’97), Alumni Council; Adam Lilling (MBA’07), Alumni Council; and Reginald Ferguson (BS ’90), AHBBS AlumniChair, Alumni Council

15. John (BS ’84, MBA ’86) and Effie Thomopoulos

16. Emil Chynn (MBA ’04); Daniel Ang (MBA ’01), Chair, RegionalLeadership, Alumni Council; and Dale Louie

17. Susan Greenbaum (BS ’71, MBA ’78), Associate Dean of theUndergraduate College, and Sally Blount, Vice Dean and Dean of theUndergraduate College

18. John Catsimatidis (Parent ’12) (center) and family

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Sternbusiness 41

In an effort to be more environmentally friendlyand fiscally responsible, many of the School’scommunications continue to be sent exclusively viae-mail. Don’t miss out on important information fromyour alma mater. Update your contact information bycalling (212) 998-4040, visiting the website atwww.stern.nyu.edu/alumni, or sending an e-mail toalumni@stern.nyu.edu.

Stay tuned for NYU Stern Connect,your enhanced and exclusive onlinealumni community, coming soon!

Join NYU Stern Alumni Online In this highly competitive marketplace, your network is more important than ever. From

job opportunities to potential clients or business partners, it’s all about who you know.Now is the time to join more than 11,000 fellow alumni on Stern’s official LinkedIn

group. Alumni across all degree programs, affinities, and industries have signed up to sharetheir connections and network with you, so don’t miss out on this exclusive opportunity.

Be sure to check out the official Stern alumni Facebook page, offering you access to theglobal alumni community and a direct link to staying in touch with friends. With nearly2,500 fans and growing, Stern’s presence on Facebook provides a platform for you to learnabout classmates’ professional connections, share news links and videos with fellow mem-bers, and upload favorite Stern photos. You can also view pictures from alumni and theSchool on the dedicated Stern alumni Flickr photo stream.

And for everything Stern, visit NYU Stern Connect at www.sternalumni.nyu.edu, to keepyour contact information current with the School, stay apprised of exclusive careerresources, and view a comprehensive event calendar.

Julie Lucas, a seasoned devel-opment and alumni relationsprofessional, joined the School asAssociate Dean for Developmentand Alumni Relations on March16, 2010. In her role, she over-sees the School’s efforts toincrease philanthropic giving tothe School and to build andstrengthen the global alumninetwork – 80,000 strong in over

100 countries worldwide.Lucas came to NYU Stern from Fordham Law School,

where she served as Assistant Vice President of ExternalAffairs and Assistant Dean of Institutional Advancement.In this position she was responsible for development,alumni relations, and communications. During her fiveyears at Fordham, Lucas oversaw a nearly 500 percentgrowth in annual donations to the School, launched andled a $100 million capital campaign that reached 90 per-cent of its goal in just 14 months, and substantiallyincreased the number of people giving at the $100,000level, as well as legacy gifts and student giving. As aresult of her leadership, scholarships increased nearlyfour-fold, and the school added eight new faculty chairsand five academic centers.

“Through her innovative and energetic leadership,Julie will propel the School to new levels of alumniengagement and support,” said Dean Peter Henry.

“She brings stellar experience and credentials to thispivotal position.”

Adept at planning and implementing alumni anddonor events, Lucas travels extensively to build alumninetworks around the world. Recently, she accompaniedDean Henry and President John Sexton to London,where NYU hosted a University-wide reception fornearly 300 alumni, friends, and key international part-ners. Lucas is also an outstanding manager, as demon-strated through her creation of a strong developmentand alumni relations operation at Fordham. Recognizedfor her strong work ethic, her ability to set ambitiousgoals and reach them, and her leadership, drive, andexperience, she was profiled in Crain’s New YorkBusiness 2010 “Forty Under 40,” an annual list of 40professionals who have achieved success in businessbefore turning 40 years of age.

Prior to her experience at Fordham, Lucas servedin senior development roles at both NYU Law Schooland the University, where she gained invaluableexperience on NYU’s fund-raising team and devel-oped key relationships with alumni and donors, aswell as with development officers and deans through-out the University.

Lucas holds a BA in political science and Spanishfrom Western Maryland College and an MS in educa-tional administration from Hofstra University. She alsoearned a certificate in philanthropy and fundraisingfrom NYU.

Julie Lucas Joins NYU Stern to Lead Development and Alumni Relations

Update Your Contact Information

42 Sternbusiness

The strength of a community can be meas-ured by the willingness of its members to sup-port one another and to give to those in need.In today’s economy, the strength of the Sternalumni network can be a life-changing force ina student’s academic career. To help nurturethis connection, the NYU Stern Alumni CouncilStudent Affairs Committee, chaired byMatthew Lipton (BS ’03, MBA ’10), workedover the fall semester to establish more formalchannels for connecting current students with estab-lished alumni professionals. The new programs com-pliment the current online Career Advisory Program(CAP), the mentoring program available throughStern’s online alumni community.

Students will benefit from classic mentoring,which will extend over the course of an academicyear; coaching, which can be used for career adviceand direction; and special recruiting season mentor-ing for the two months that students are interview-ing and exploring job opportunities. Additionally,specific committees and networks have establishedbest practices for their constituents.

Because of the efforts of the Student AffairsCommittee, student affinity networks and profes-sional groups have been paired with their correspon-

ding alumni community. These new pairings arestructured in a uniquely flexible way that allows foreach relationship to flourish through in-personmeetings, conference calls, e-mails, and attendanceat student and alumni events.

The Recent Undergraduate Committee developedthe Stern “Salon” Series, where seven undergradu-ate students are given the opportunity to meet withan experienced alumnus/a. Additionally, the SternWomen in Business Alumnae Network (SWIB) con-tinued its second year of collaboration with theSWIB graduate student committee and held a men-toring dinner in the fall.

If you would like to learn more about alumni-to-student and alumni-to-alumni mentoring, pleasevisit www.stern.nyu.edu/alumni or call (212) 998-4040.

Mentoring Takes a Front Seat

Over the past year, the Stern Women in Business(SWIB) Alumnae group – a committee that pro-motes the personal and professional development ofStern’s female students’ and alumni – dedicated itstime and outreach to support one of the School’smost important fundraising initiatives, theConcourse Project. Since early 2009, alumnaearound the world have pledged a combined gift of$100,000 over the next three years to Stern’s mosttransformative facilities renovation since 1988.

“We felt it was important to be a part of thismilestone in our alma mater’s history,” saidChristine Schneider (MBA ’94), Chair of SWIBAlumnae. “Stern’s students need a space that isrepresentative of the School’s academic standards.”

Their gift will help to support the education ofwomen in the business industry through state-of-the-art technology and newly created classroomsdesigned to foster collaborative learning. The reno-vation, which encourages research, communitybuilding, and networking, is drastically changingthe experience of students and alumni. As recogni-tion for their outstanding support of Stern’s future,

SWIB Alumnae will have a community loungespace dedicated in their name.

“When our group’s name is on the wall, cur-rent female students will know that they can tapinto a huge network of successful alumnae,”shared Schneider.

While the Concourse levels are now open, thefundraising campaign continues. There’s stilltime to be a part of this milestone in NYUStern’s history – donors who are able to make apledge of at least $5,000 over a three-year peri-od will have their name listed on a recognitionwall in a prominent Concourse community space.These donor walls will be a lasting legacy ofcamaraderie to all those who pass by, remindingfuture generations of the strength of the alumnicommunity during this major transformation.

If you would like to learn more informationabout the Concourse Project, have your namelisted on the donor wall, or become involvedwith SWIB Alumnae’s campaign, please visitwww.stern.nyu.edu/buildconcourse or call (212)998-4040.

Stern Alumnae Support Stern’s Renovation

Justin Pollack (BS ’98) spoke with recent undergraduate alumni at a Stern “Salon” Series event as part ofthe NYU Stern Alumni Council Recent Undergraduate Committee’s mentoring initiative.

Sternbusiness 43

1940sMurray Nichter (BS ’40), of Plainview,NY, retired Partner of Spicer & Oppenheim,CPAs, welcomed great grandchild GabriellaSoleil on October 20, 2009.

1950sWilliam Heath (BS ’50), of SilverSpring, MD, has authored a book titled,Some Kind of Plant: Learning WhileTeaching in Taiwan and Hong Kong2003-2009, a memoir of his time teach-ing in Asia.

1960sHarvey Golub (BS ’61), of Saddle River,NJ, is Chairman of AIG. Golub wasChairman and CEO of American Expressfrom 1993 to 2001.

Joseph Tovey (MBA ’61, PhD ’69), ofBrooklyn, NY, has been named contractconsulting CEO and CFO of Glen RosePetroleum Corporation. Previously, Toveywas CEO of Tovey & Company, LLC, aninvestment banking firm specializing inenergy.

Ned McCormack (MBA ’63), ofOrangevale, CA, has been named Directorof Westchester County Executive RobAstorino’s communications team. He iscurrently an executive at Bank of AmericaMerrill Lynch.

Lawrence Zimmerman (BS ’65), ofStamford, CT, has been named to theBoard of Managers of Delphi AutomotiveLLP. Zimmerman is Vice Chairman andCFO of Xerox Corporation.

Joan E. Bloom (MBA ’66), of NewYork, NY, has joined The DilenschneiderGroup, a strategic counseling and commu-nications firm, as Principal and Co-directorof its Travel & Lifestyle Division. Bloomwas previously Senior Vice President at MBooth & Associates. She served as ex-offi-

cio member of the NYU Stern AlumniCouncil from 2008 to 2009 and Liaisonto the Committee for the Global AlumniConference in Barcelona.

James Elkins (BS ’66), of Scottsdale,AZ, has been named a consultant to thePlan Sponsor businesses of ConvergEx.Before retiring in 2004, Elkins wasfounder and President of ElkinsMcSherry.

M. Medhat A. Hassanein (MBA’66), of Cairo, Egypt, has been named anon-executive member of the Board ofCommercial International Bank. Dr.Hassanein, who served as Egypt’sMinister of Finance from 1999 to 2004, iscurrently Professor of Finance andBanking at the School of Business,Economics & Communication at theAmerican University in Cairo.

Irving W. Bailey, II (MBA ’68), ofLouisville, KY, has been named presidingLead Independent Director of ComputerSciences Corporation. Bailey is SeniorAdvisor at Chrysalis Ventures Inc.

Elliott Singer (MBA ’68), of Naples,FL, has joined the Board of Directors ofAmeritrans Capital Corporation. Singer isManaging Director of FairView Advisors,a financial services firm that he foundedin September 2001.

1970sJack Hayflick (MBA ’72), ofRidgewood, NJ, has been namedExecutive Vice President of StrategicPlanning at Mark Asset Management.Previously, Hayflick spent 29 years atGoldman Sachs, & Co.’s private wealthmanagement division.

Donald Kurz (MBA ’73), of BrynMawr, PA, received a United Seamen’sService 40th Annual Admiral of theOcean Sea award on November 13,

2009. Kurz is President and CEO ofKeystone Shipping Co.

Jacob Worenklein (MBA ’73), of NewYork, NY, has been named to Ember’sBoard of Directors. Worenklein previouslyserved as Chairman and CEO of US PowerGenerating Company.

Shishir K. Bajaj (MBA ’74), ofMumbai, India, has been named Directorof Kotak Mahindra Bank, a Mumbai-basedglobal financial organization. Bajaj is theChairman and Managing Director of BajajHindusthan Ltd., India’s largest sugar andethanol manufacturing company.

Mel Washington (MBA ’75), of NewYork, NY, has been named ExecutiveDirector of Project Enterprise. Previously,Washington held executive level positionsin finance, operations, and strategy andplanning for organizations includingAT&T, Salomon Brothers, Morgan Stanley,JPMorgan Chase & Co., Citibank, HumanRights First, and most recently EastWestInstitute.

Joel Yarmak (MBA ’75), of Lawrence,NY, has been named Chief AdministrativeOfficer of Cedar Shopping Centers, Inc.Previously, Yarmak was the President ofFinancial Operations at Kimco RealtyCorporation.

Ameerah Haq (MBA ’76), of Timor-Leste, has been appointed as Head of theUN Integrated Mission in Timor-Leste.Haq most recently served as UNSecretary-General Bank Ki-Moon’s DeputySpecial Representative for Sudan andAfghanistan. Previously, she served asDeputy Assistant Administrator andDeputy Director at the UN DevelopmentProgram (UNDP) Bureau for CrisisPrevention and Recovery, AssociateDirector of the UN Development GroupOffice, and UN Resident Coordinator andUNDP Resident Representative in bothMalaysia and Laos.

Reginald Jones (MBA ’76), of SilverSpring, MD, has joined the USGovernment Accountability Office asManaging Director of its Office ofOpportunity and Inclusiveness. Since2008, Jones has headed his own law andconsulting practice.

Jeremy A. Spector (MBA ’76), ofPrinceton, NJ, has been named a memberof the Fellows of the American BarFoundation (ABF). The Fellows of the ABFis an honorary organization of attorneys,judges, and law professors whose profes-sional, public, and private careers havedemonstrated outstanding dedication tothe welfare of their communities and to thehighest principles of the legal profession.

Joseph Fitzgerald (MBA ’77), of NewYork, NY, has been named Director ofNeoMagic Corporation. Fitzgerald alsoserves as a senior financial counselor forFinancial Profiles.

Cathy Minehan (MBA ’77), of Boston,MA, has been named to the Board ofDirectors of Massachusetts Mutual LifeInsurance Company. Previously, Minehanwas President and CEO of the FederalReserve Bank of Boston.

John Paulson (BS ’78), of New York,NY, founder and Chairman of Paulson & Co., Inc., has given a $20 million gift to NYU Stern. Paulson is a member of the NYU Stern Board of Overseers (seepage 20).

Emily Sanders (MBA ’78), of Norcross,GA, has received the World of Differenceaward from the International Alliance forWomen. Sanders is President and CEO ofmetro Atlanta-based Sanders FinancialManagement.

Edward Miu (MBA ’79), of Sydney,Australia, has been named CFO ofEldorado Gold. Miu was previously CFO ofSino Gold Mining Limited.

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44 Sternbusiness

Send us your news, update your contact information, and access the contact information of your fellow alumni throughStern Connect, Stern’s online alumni community, at www.sternalumni.nyu.edu.

Terese M. Wilkinson (MBA ’79), ofMidland, TX, has been appointed to theTexas Health and Human ServicesCouncil. Wilkinson is a registerednurse and Partner at Ben-Mar Partners.

1980sKevin Booth (MBA ’80), ofPrinceton, NJ, has been named Co-portfolio Manager of the RS HighYield Bond Fund with RS Investments.Prior to this, Booth was ManagingDirector at BlackRock/Merrill LynchInvestment Managers and was Co-head of BlackRock’s leveraged financebusiness.

Roger Kramer (MBA ’81), of NewYork, NY, has been named to the Boardof Directors of Leap WirelessInternational, Inc. Kramer is CEO ofGriffon Corporation.

Yoko Otani (MBA ’81), of New York,NY, has been named Special Adviser toPromontory Financial Group.Previously, Otani was ManagingDirector at Citigroup’s Global Corporateand Investment Bank.

Stefano Russo (MBA ’81), ofLondon, UK, has been appointed as anindependent member of Kairos Funds’Board of Directors. Russo is a memberof the NYU Stern Executive Board andhas worked for RenaissanceInstitutional Management UK as CEOand Head of Sales for Europe,Middle East, and Asia Pacific regionssince 2006.

Louis Weltman (MBA ’81), of BocaRaton, FL, has been named CEO ofViStra. Weltman’s experience includesconsulting or ownership of public andprivate companies, and management ofa variety of businesses including homefurnishings and printing companies,and he has founded or was CEO of arange of companies.

Jeffrey Brodsky (MBA ’82), of EastMeadow, NY, received the Greater NewYork Chapter of the Institute of PropertyManagement’s Certified PropertyManager of the Year award. He isPresident of Related Management,Executive Vice President of RelatedAffordable, a member of the ResidentialCommittee of the Real Estate Board ofNew York, and the recipient of its 2006George M. Brooker ManagementExecutive of the Year award.

Thomas P. Burke (BS ’82, MBA’83), of Scarsdale, NY, has joinedScholastic Corporation as Senior VicePresident of E-commerce. He was previ-ously Executive Vice President of E-commerce at BN.com, the e-commercedivision of Barnes & Noble, Inc.

Eileen Decker (BS ’82, JD ’90), ofLos Angeles, CA, has been namedDeputy Mayor for Homeland Securityand Public Safety of Los Angeles.Previously, Decker served as the Headof National Security in the US Attorney’sOffice for the Central District ofCalifornia.

John Kruglinksi (MBA ’82), ofMacungie, PA, has been hired asAssistant Professor of Accounting atAlbright College in Reading, PA.Previously, he served as AssistantProfessor of Accounting and Finance atKutztown University.

Carol LaPunzina (BS ’82), ofDemarest, NJ, has been named SeniorVice President, Human Resources, of W. R. Berkley Corporation. LaPunzinahad served as Senior Vice President,General Counsel, and Secretary ofBerkley Insurance Company.

Steven J. Morris (MBA ’82), of SanDiego, CA, has been named CEO of theUnited Jewish Federation of San DiegoCounty.

When Scott DeGhetto decidedthat he wanted to go back to schooland earn his MBA, he searched fora program that would allow him tofully immerse himself in the cur-riculum. “I was working as an engi-neer for PSE&G Co. in NewJersey,” he said. “I was looking tolearn more about the finance Iwas starting to gain exposure toand to move forward in mycareer.” DeGhetto made a beelineto the full-time MBA program atNYU Stern.

Once here, he was able to attend classes taught by industryleaders with fellow students who were passionate about thebusiness school experience. “I chose to go to Stern because ofits strong finance curriculum, its location in the center of thebusiness community, and its incredible alumni network,”explained DeGhetto. “I came from an engineering backgroundand wanted to learn as much as I could while I was here.” Now,as the Managing Director and Co-head of Power & Renewablesin the Americas at Credit Suisse, he leads a team of 50 invest-ment banking professionals, one of the largest such groups inthat sector in the US.

DeGhetto was recruited to his current position in October2008 from JPMorgan Chase, where he was Managing Directorin the Power and Pipeline group. He has also held positions atUBS, Bear Stearns, and Citigroup. “I attribute my currentposition to my very first internship,” he said. “I would neverhave received that internship in 1991 without the Stern alum-ni network – I went through the alumni directory name byname searching for a contact. The market was in a slump.”

Now, DeGhetto is responsible for providing a full array ofinvestment banking services to traditional gas and electricityclients, as well as to the renewable energy sector, includingwind and solar companies. “We provide a range of services,from raising capital to providing advice on capital structure,dividend policy, and M&A,” he said.

When DeGhetto is away from work, he makes a point oftaking family vacations with his wife of 16 years and his son,13, and daughter, 11. He also enjoys racing cars, playing ten-nis, and attending sporting events. He has also had the fortuneto travel extensively – to England, Germany, France, Spain,Italy, Turkey, Argentina, Brazil, Australia, New Zealand,Indonesia, China, and Thailand. “I’ve even been to 49 of the50 states,” he said. Now, at the age of 47, he is teaching him-self to play the guitar. His philosophy? “The day you stoplearning is the day you stop living.”

T h e E n e r g y t o S u c c e e d

Scott DeGhetto (MBA ’92)

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46 Sternbusiness

William A. Houlihan (MBA ’83), ofAllendale, NJ, has been elected to theBoard of Directors of First PhysiciansCapital Group, formerly Tri-IsthmusGroup. Houlihan previously served asCFO at Sixth Gear, Sedgwick ClaimManagement, Metris Companies, andHudson United Bancorp.

Janet L. Pegg (MBA ’82), ofMaywood, NJ, has joined US EquitiesResearch as Managing Director and sheis responsible for the Strategy &Valuation Group as Accounting Analyst.Pegg joins UBS from Encima Globalwhere she was Accounting and TaxAnalyst.

Jerry Treppel (MBA ’83), of Edison,NJ, has been named CEO of ElitePharmaceuticals, Inc. Previously,Treppel served as the ManagingMember of Wheaten CapitalManagement LLC and ManagingDirector of Ledgemont Capital GroupLLC.

Susan M. Baer (MBA ’84), of UpperMontclair, NJ, has been appointed Directorof Aviation for the Port Authority of NewYork and New Jersey, overseeing John F.Kennedy, Newark Liberty, and LaGuardiaAirports. Most recently, Baer was theagency’s Deputy Director and COO.

Jeffrey M. Gaspin (MBA ’84), ofCalabasas, CA, has been named Chairmanof NBC Universal Television Entertainment.Gaspin was previously President and COOof NBC Universal TV Group.

David W. Unger (MBA ’84), of NewYork, NY, has been hired as ManagingDirector at Knight Libertas LLC, a sub-sidiary of Knight Capital Group, Inc. Mostrecently, Unger was Founding Partner atAvalon Equity Partners.

Khaled T. Haram (BS ’85, MBA ’88),of Rochester, MI, has joined LightingScience Group Corporation as Presidentand COO. Haram joins LSG from PegasusCapital Advisors, LP, a private equity fund,where he served as an operating advisor.

Chris Policinski (MBA ’85), ofShorewood, MN, has joined Xcel EnergyInc’s Board. Policinski is also President andCEO of Land O’Lakes, Inc.

Robert F. Schott (MBA ’85), of NewCanaan, CT, has joined CPEX as AssociateDirector for the Multi-Family InvestmentSales Division. Previously, Schott wasManaging Partner of QUAD Properties LLC,a New Jersey-based real estate holdingcompany.

John T. Gaffney (MBA ’86), of WestOrange, NJ, joined the Board of SafeBulkers, Inc., an international provider ofmarine dry bulk transportation services.Since January 2008, he has been ExecutiveVice President and Corporate Secretary atFirst Solar.

c l a s s n o t e s

Mai Nozoe never dreamed she would be the Creative ServicesDirector at Michael Kors, Inc. before she turned 30. “I just knewthat I wanted to work on the business side of a creative industry,”she said. When she enrolled in the undergraduate program, Nozoedecided to focus on international business and marketing. “Abusiness degree is pragmatic for all career paths,” she declared.“It’s not just for those who have a desire to work in finance.”

While still a student, Nozoe kicked off her career in advertis-ing through internships in various industries. At 19, she accepteda summer internship at Sony Music’s in-house advertising agencyand then worked in the retail branch of Coach on 57th Street in

New York City. Nozoe also spent time working at companies such as Nars Cosmetics andthe global advertising agency Foote Cone & Belding, now DRAFTFCB. “Stern opened a lotof doors for me,” she said. “It’s the type of school where you can sit next to the future headof marketing at a company like Prada.”

Nozoe’s experience as a retail salesperson shaped her interest in branding. “I was ableto interact with consumers and see firsthand how the shopper responded to the marketingmessages being created,” she said. Given Stern’s access to leading industries in New YorkCity, she felt that she was offered a seamless transition into her career. “Students at Sternare able to work in fashion and other nonconventional careers,” Nozoe said. “They can pur-sue a non-traditional business role and be confident that they will be successful.”

In her current position, Nozoe is responsible for all in-house creative advertising andbranding for Michael Kors, ranging from print magazines, billboards, and other outdoormedia, to invitations to charity and retail store events. She explained that at Michael Kors theoverall brand strategy is to use advertising imagery to convey a jet-set lifestyle. Over the nextthree years, the company will strengthen its position throughout Europe, the Middle East, andAsia. “It’s an exciting time, and I’m looking forward to the opportunities and challenges thatwe will face as we introduce our brand to international markets,” Nozoe said.

Finding a profession that suits one’s talents and interests is a very personal quest, sheobserved. Before graduation, “I had no personal ties to the industry but I just knew that Iwanted to work in fashion,” she remembered. “It’s incredibly important to re-evaluate thetraditional role of a career and what your passions are, because if you follow your heart,you’ll end up where you want to be without regrets. It’s important to take the time as a stu-dent to make sure what you want ‘fits.’”

F a s h i o n i n g a S t y l i s h C a r e e r

Mai Nozoe (BS ’02)

Sternbusiness 47

Daniel H. Schulman (MBA ’86), ofWarren, NJ, leads Sprint Nextel’s prepaidcellular business, and recently received the2009 Ernst & Young Entrepreneur of theYear award.

Scott Garabedian (MBA ’87), of Salem,MA, has been appointed a director of theLynch-van Otterloo YMCA in Marblehead,MA, a branch of the YMCA of the NorthShore. Garabedian is Partner and SeniorVice President at the Wakefield-basedaccounting firm Tonneson and Co.

Roger Kahn (MBA ’87), of Scarsdale,NY, received the 2009 Long Island Way’sCause Champion award, which is present-ed to an individual who demonstratesexceptional promotion, connection, andsupport in the non-profit and businesscommunities. In addition, he is the ownerof Intelligent Office, a business that pro-vides a cost-effective alternative to tradi-tional office space.

Art Oswald (MBA ’87), of Cohasset, MA,has joined Susquehanna Financial Group asHead of Research Sales, Regional SalesManager, and Head of SusquehannaFinancial Group’s Boston office. Previously,Oswald served as Managing Director atMerrill Lynch.

George Barrett (MBA ’88), of Rydal, PA,has been elected to the Board of Directorsof Cardinal Health and will serve asChairman and CEO of Cardinal Health.Previously, Barrett was Vice Chairman andCEO of Cardinal Health’s Healthcare SupplyChain Services division.

1990sBrian P. Lancaster (MBA ’90), of NewYork, NY, has joined the Global Banking &Markets, Americas division of the RoyalBank of Scotland (RBS) as Head of MBS,CMBS, and ABS Strategies. He joins RBSfrom Wachovia Capital Markets LLC,where he served as Chief Investment

Officer in its real estate division,responsible for capital allocation, busi-ness, and lending strategies.

Erik Prusch (MBA ’90), of Austin, TX,has been named CFO of ClearwireCommunications, LLC. He was mostrecently President and CEO of BorlandSoftware, where he also previouslyserved as CFO.

Mitchell S. Stern (MBA ’90), of NewYork, NY, has been appointed toManaging Director in Morgan Joseph &Co.’s Healthcare Investment Bankinggroup. Previously, Stern was SeniorAccountant at Ernst & Whinney.

Eamon Tubridy (BS ’90), of GardenCity, NY, has been named Director ofEmerging Markets Sales for KnightLibertas. Previously, Tubridy worked atRBS in emerging market sales.

William Bila (BS ’91), of Toronto,ON, was elected to the Board ofDirectors of the Toronto RomaCommunity and Advocacy Centre (RCC),and now holds the position of Co-chair.This nonprofit organization providessupport to refugees through social set-tlement services as well as arts and cul-ture programs.

David C. Kahn (MBA ’91), of PacificPalisades, CA, has joined ConvergentWealth Advisors as Director in the firm’sLos Angeles office. Kahn joinsConvergent from Wilmington TrustCompany, where he was ManagingDirector and Private Client Advisor.

David Kimm (MBA ’91), of St. Louis,MO, has been named Chief Risk Officerof TD AMERITRADE HoldingCorporation. Kimm most recently servedas the Senior Vice President and CROfor Wells Fargo Advisors.

Lee C. Lloyd (BS ’91), of Derwood,MD, has been named President of CrumpGroup, Inc’s programs unit within thecompany’s property & casualty division.Lloyd comes to Crump from UnitedEducators Insurance, where he held seniorleadership roles over the past 10 years,most recently serving as Vice President ofUnderwriting and Chief Actuary.

David Goodall (MBA ’92), of ShakerHeights, OH, has been named ExecutiveVice President of Commercial Bankingwith FirstMerit Corporation. He joinedFirstMerit in April 2009 as ExecutiveVice President of Specialty Lending,and became Acting Leader ofCommercial Banking in September.Prior to joining FirstMerit, Goodall wasPresident and CEO of National CityBusiness Credit, Inc.

Suzanna Sullivan Keith (MBA ’92),of Rye, NY, has been elected to the RyeCity Council. In addition, she wasappointed Deputy Mayor.

Steven A. Mermelstein (MBA ’92),of Irvington, NY, has joined the healthcareteam of Covington Associates asManaging Director. Most recently,Mermelstein was a managing director atFerghana Partners, where he was respon-sible for corporate partnering, M&A, andequity private placements.

Gerald V. Messina (MBA ’92), ofWyckoff, NJ, has been appointed toAmerican Standard Brands’ marketing andsales team, where he is Director ofCustomer Development Retail Faucets.Prior to coming to ASB, Messina servedas Director of Product Management atBenjamin Moore Paints and Director ofMarketing at Reckitt Benckiser.

Frank A. Napolitano (MBA ’92), ofWestfield, NJ, has been namedPresident and Director of LakesideEnergy. Napolitano was most recently

Managing Director and Global Head ofCommodities Sales & Origination atLehman Brothers.

Joyce A. Phillips (MBA ’92), of NewYork, NY, has been named GroupManaging Director of Strategy, M&A,Marketing, and Innovation at Australia &New Zealand Banking Group Ltd.Phillips will also join ANZ’sManagement Board. Previously, Phillipswas President and COO at American LifeInsurance Company.

Alexis D. Lasser (MBA ’93), of NewYork, NY, has been hired as ManagingDirector and Head of Private and IlliquidPlacement with Standard Charter’s DCMgroup. Previously, Lasser was ManagingDirector with Barclays Capital.

Gregory A. Loprete (MBA ’93), ofShort Hills, NJ, has joined Keefe, Bruyette& Woods, Inc. as a convertible and pre-ferred trader. Previously, Loprete worked atRamius LLC, where he was Director of theConvertible Arbitrage group.

Glen Perillo (MBA ’93, MS ’93), ofFar Hills, NJ, has joined Citadel as Head ofSecuritized Products Research. Previously,Perillo served as Head of MortgageResearch and Co-head of FinancialModeling at BlackRock Solutions.

Michael D. Schreiber (MBA ’93), ofWoodmere, NY, has been named Partnerwith First New York Securities, a diversifiedglobal proprietary trading firm.

Jeffrey Abt (MBA ’94), of Rye, NY, hasjoined Raymond James & Associates,where he will lead its debt origination anddebt advisory services for corporateclients. Previously, Abt worked forGoldman Sachs, & Co. and LehmanBrothers.

James R. Brennan (MBA ’95), ofSouth Setauket, NY, has been appointed

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48 Sternbusiness

Sally Rowley-Williams has a personality that makes build-ing relationships and networking appear effortless. “My wholecareer has been shaped around motivating people,” she said,“either to reach for what they want or to manage others to pro-vide the best level of service that they can.”

In 2009, Rowley-Williams left behind a distinguished careerin the financial services industries of both New York andLondon to focus on her entrepreneurial idea – career counsel-ing. “I loved working for large organizations,” she explained,“but I wanted to focus on my own interests: providing talentmanagement to companies and also helping people findemployment.” Now, as founder and CEO of Career Doctor,based in London, she helps build leadership teams in companies through executive searchand talent management, and she helps individuals develop their own careers throughassessments and strategic planning. She has also served as Non-Executive Directorof Greenspan Realty Corp. since 2005.

After graduating from NYU Stern in 1984, Rowley-Williams held positions at manywell-known firms, including Chemical Bank and First Chicago – both ultimately acquiredby what is now JPMorgan Chase. In 1987, she transitioned to Citigroup, where she servedas Vice President, Head of Debt Capital Markets Origination for French and British finan-cial institutions, and Global Relationship Manager. In 1994, she joined Korn/FerryInternational, the world’s second-largest executive search firm, as Senior Client Partner Co-Head of the European Financial Services Practice, and served on the UK ManagementCommittee and lead the largest global relationship in the firm. Rowley-William’s hard workand relationship-building paid off. “I stayed with Korn/Ferry for 13 years until I wasrecruited by my client, Arbuthnot Latham, to work for them in 2007,” she said.

At Arbuthnot Latham, Rowley-Williams was given the opportunity to create and leada private client team that focused on one of her biggest interests, horseracing. “As headof the horseracing team, I was able to introduce private clients from the horseracingcommunity to the bank through a sport with which I was actively and passionatelyinvolved, beginning in 2004 when I joined the Board of the Racehorse OwnersAssociation,” she stated.

While she no longer works directly with Arbuthnot Latham, Rowley-Williams remainsactive in the racing community as Non-Executive Director and Executive Committeemember of the Racehorse Owners Association, Trustee of the Pony Club, and as founderand Chair of the Women in Racing network. “Horseracing has the second-largest eco-nomic impact of any sport on the UK’s economy after soccer,” she explained. “When Imoved to the UK, I became interested in the sport and its importance in the economy,and I knew that I had to be a part of it.”

Rowley-Williams attributes much of her success to her education. “I’m happy that Ichose the [Langone] Part-time MBA program at Stern because the finance program wasincomparable and taught by iconic instructors from both Wall Street and academia,”she said. The sine qua non, she added, is the ability to network with peers in thebusiness community. “The relationships that you build with the people around youmake the biggest impact.”

A Q u i n t e s s e n t i a l P e o p l e P e r s o n

Sally Rowley-Williams (MBA ’84)

Managing Director of DeSilva + Phillips’Healthcare IT M&A practice. Previously,Brennan was CEO of VirtualCDO.

Alok Gupta (MPhil ’95, PhD ’97), of NewYork, NY, has joined Diamond Management &Technology Consultants, Inc. as Partner inthe firm’s Mumbai, India, office. Previously,Gupta worked for Novantas.

Stephen Hrynkiewicz (MBA ’95), ofKenilworth, NJ, was recently hired asController of Ohaus Corporation, a division ofMettler-Toledo, Inc. Previously, Hrynkiewiczwas Senior Finance Manager at Pfizer, Inc.

Anatoly Nakum (BS ’95), of New York,NY, has been named Head of InvestmentGrade Trading with UBS. Previously, Nakumwas Managing Director at Barclays Capital.

I-Chi Shih (BS ’95), of New York, NY, hasbeen named CFO of China ValvesTechnology, Inc. Previously, Shih was VicePresident of Brean Murray, Carret AsiaInvestment Banking Group.

John J. Trizzino (MBA ’95), ofDarnestown, MD, has been named SeniorVice President of International andGovernment Alliances with Novavax, Inc., aclinical-stage biotechnology company thatcreates vaccines to address a broad range ofinfectious diseases worldwide.

Eric Bass (MBA ’96), of Westfield, NJ, hasjoined Rothstein Kass, a CPA and businessadvisory firm, as Principal in its BusinessAdvisory Services practice. Prior to joiningRothstein Kass, Bass was Senior ManagingDirector with Smart Business Advisory andConsulting, LLC.

Jonathan I. Lieber (MBA ’96), ofNewton, MA, has been named CFO atXcellerex, Inc. Lieber joins Xcellerex fromAltus Pharmaceuticals, where he was SeniorVice President, CFO, and Treasurer.

Theresa M. Lyons (MBA ’96), of SantaMonica, CA, has joined the MarriottFoundation as Director of the Los Angelesoffice and leader of the “Bridges… fromSchool to Work” initiative that assists youthages 17 to 22 with developmental or physi-cal disabilities in their search for job oppor-tunities with local employers.

Franklin M. Tokioka II (MBA ’96), ofHonolulu, HI, has recently been promoted toPresident from Vice President of theNational Mortgage & Finance Company.

Arthur C. Chang (MBA ’97), ofBrooklyn, NY, was appointed by MayorBloomberg to the New York City CampaignFinance Board. He is the first Korean-American to serve on the Board. Chang isthe founder and CEO of the venture capitalfirm Tipping Point Partners.

Eric F. Letts (MBA ’97), ofHillsbourough, NJ, has been namedSolution Lead for HighPoint Solutions’Master Data Management Practice. Mostrecently, he was Partner at ComputerScience Corporation, where he devel-oped and led their Master DataManagement Practice.

Christopher Shaw (MBA ’97), of NewYork, NY, has been appointed to cover thechemical and agricultural industries withinTiconderoga Securities’ expanded Equity-Research Group. Shaw is Senior Analystwithin equity research and previously cov-ered the chemicals, agriculture, and biofuelsindustries at UBS.

Lawrence M. Clark, Jr. (MBA ’98), ofNew York, NY, has been appointed to theBoard of Directors of Zapata Corporation.Clark is Managing Director and Directorof Investments of Harbinger CapitalPartners LLC.

Daniel Isidori (MBA ’98), of BuenosAires, Argentina, has been appointedInvestment Manager of the Baring LatinAmerica Equity Fund. Previously, he was

Portfolio Manager at HSBC AssetManagement in Argentina.

Theresa Chillianis (MBA ’99), ofFloral Park, NY, has been appointedGeneral Manager of MSG Varsity,Cablevision’s new suite of television,online, and interactive services dedicat-ed to high school sports and activities.Previously, Chillianis served as SeniorVice President of Strategy andBusiness Operations for Fuse, anational music and entertainmentcable television network.

Graham Conran (MBA ’99), ofChappaqua, NY, has joined Nomura asHead of Debt Origination. He spent 10years with JPMorgan Chase & Co. priorto joining Nomura, most recently asHead of Debt Capital MarketsOrigination Emerging Asia, based inHong Kong.

Richard Gnolfo (BS ’99), ofWantagh, NY, recently released his film“The Dog Who Saved Christmas,” whichpremiered on ABC Family in November2009. Gnolfo co-wrote the film with hislongtime friend, Michael Ciminera.

Christine Jurinich (MBA ’99), ofWatchung, NJ, has been named Partnerof Offit Capital Advisors LLC.Previously, Jurinich worked asManaging Director at BlackRock.

George J. Pagano (BS ’99), ofStaten Island, NY, is now an associate inthe Bankruptcy and Creditors’ RightsPractice at the law firm of Katten MuchinRosenman LLP. Pagano is a member ofthe American Bankruptcy Institute, NewYork State Bar Association, and theTurnaround Management Association.

2000sJonathan Lowenberg (MBA ’00), ofNew York, NY, has been namedManaging Director and Co-head of

Structured Finance and PrivatePlacements at Merriman Curhan FordGroup, Inc. Lowenberg most recentlyworked at Kaufman Brothers asManaging Director and Head of PrivatePlacements.

Shabnam Rezaei (MBA ’01), of NewYork, NY, recently placed sixth in theannual film industry trade show MipJunior for her animated television series“1001 Nights.”

Kenneth S. Avalos (MBA ’02), of St.Petersburg, FL, has joined First PotomacRealty Trust as Director of Finance andCapital Markets. Prior to joining FirstPotomac, Avalos was Senior VicePresident at Integrated CorporateRelations, where he covered the realestate and healthcare sectors.

Kimberly A. Hendricks (MBA ’02),of Mohegan Lake, NY, was appointedVice President, Corporate Controller,and Chief Accounting Officer at HexcelCorporation. Previously, Hendricksserved as Vice President andCorporate Controller of InternationalFlavors and Fragrances.

David Lawrence (MBA ’02), of NewYork, NY, has been promoted to the posi-tion of Executive Vice President ofFinance and Administration with MarquisJet. Lawrence has been with Marquis Jetsince February 2002 and previouslyserved as a financial analyst at TheFederal Reserve Bank of New York.

Kelly Kennedy Mack (MBA ’02), ofNew York, NY, was honored by NYU asthe first recipient of the DistinguishedYoung Alumna Award. The award goesto distinguished NYU alumni age 35and under. Mack is President ofCorcoran Sunshine.

Denise B. Schmedes (MBA ’02), ofMiddletown, NJ, has been promoted toVice President in The Federal Reserve

Bank of New York’s Wholesale ProductOffice. Schmedes had been Assistant VicePresident since January 2007.

Steven J. Siwinski (MBA ’02), ofMontclair, NJ, has been appointedManaging Director at FIT Consulting Inc.Siwinski was previously Partner at Ernst &Young.

Raymond Tsai (BS ’02, MBA ’06), ofPort Washington, NY, was recently marriedto Zena Lee Park. Tsai is President of JoyMark Inc., a wholesale women’s clothingcompany.

Gloria W. Chan (BS ’03), of New York,NY, was recently married to Davin JoeChew. Chan is Senior Media Strategist atthe Media Kitchen unit of KirshenbaumBond + Partners.

Jennifer Matulewicz Darby (MBA’03), of Marshfield, MA, has been hiredas Senior Accountant with Damon,Topham & Company, LLC.

Joseph P. Discepola, Esq. (BS ’03),of Fort Lauderdale, FL, has joined Marc A.Kaufman & Associates as Associate.Discepola worked for the firm while pursu-ing his MBA from the University of MiamiSchool of Business.

Alia Jones (MBA ’03), of New York, NY,has been recognized in the The Root’s“100 List,” which celebrates emerging andestablished African-American leaders.Jones was recognized for her work in theater producing.

Ana Paula Menezes (MBA ’03), of Jersey City, NJ, and her husband,Michael, welcomed their second set oftwins Carolina and Daniel on October22, 2009.

Gary Schmidt (MBA ’03), ofHightstown, NJ, has been named SeniorTalent Management Consultant for theNortheast region of Right Management. He

Sternbusiness 49

Norman Himelberg never had to catch the entrepreneurialbug. He came by it naturally, watching his parents run awomen’s speciality and clothing store, Campo Sport Company,located in Manhattan and the Bronx for nearly 20 years. “Myfather never wanted to work for someone else,” said Himelberg.“He always had a great business sense about him.” Businessschool was an obvious next step. “I wanted to get my degreeand work in real estate,” he said.

After graduating from NYU Stern in 1958, Himelberg gothis feet wet at the Wall Street brokerage firm Hornblower &Weeks, a company that then maintained eight offices through-

out the US, and at Al Stamm & Co., working three years in their accounting division. Hethen transitioned to real estate, accepting a position at Berley & Co. as a commercialleasing broker in Manhattan. In his nearly two years there, his passion for the real estatemarket grew, and in November of 1963, he purchased his first brownstone in New York.“I renovated the entire building, and rather than selling it, I used it as a rental proper-ty,” he said. Following the renovation, Himelberg purchased two additional brown-stones, which he also kept as rental properties. “I mostly rented to recently relocatedbusiness professionals,” he recalled.

In 2000, Himelberg shifted his career again, this time to the financial services indus-try, specifically the stock market. He formed Himcor Group, a private investment firm. “Iwanted to have more of a role in managing my personal finances,” he said. ThroughHimcor Group, Himelberg began to purchase stocks in consumer product companies suchas Kraft and Kellogg’s, and used his connections within the Stern alumni network toenhance his business. “Stern was great because it not only allowed me to learn from fac-ulty stars like [former Dean and Professor] Abe Gitlow, Frank Angell, and Jules Backman,but also connected me with a large network,” he explained.

As a successful entrepreneur, Himelberg devotes a large amount of his time support-ing the next generation of his alma mater’s entrepreneurs. He has founded both theHimelberg Lecture Series and the Entrepreneur-in-Residence program at Stern’sBerkley Center for Entrepreneurship and Innovation, established in 1987 to developand foster entrepreneurship in the business and social sectors. “Owning a small businessis like being an artist,” he shared. “The business teaches you more about yourself themore you create. If you’re smart, you’ll observe the small changes and nuances aroundyou.” It is his hope that through the two initiatives he founded, future business lead-ers will gain real-world experience and examine their future goals during their timeat Stern. “The entrepreneurial mentality is different,” he observed, “and those whopossess it need to know that it’s okay to take risks – the rewards of owning your ownsmall business are great.”

Today, Himelberg continues to manage one rental property at another firm he found-ed, Reisel Management LLC, and remains active managing his own portfolio. He has twochildren: Rachael Sara Brooks, a marine biologist in Easton, Maryland, and RobertSamuel, a software programmer in Los Angeles, California.

A l l t h e R i g h t M o v e s

Norman Himelberg (BS ’58)

was previously with Saville ConsultingGroup as the Head of the AmericasRegion, Executive Director of GlobalTalent Management for NovartisPharmaceuticals, and Vice President ofConsulting Services for SHL USA, Inc.

Jonathan L. Gerber (BS ’04), of Los Angeles, CA, was recently marriedto Natalie Katzin.

Adam Scheer (MBA ’04), ofPrinceton, NJ, was named Chairman ofthe International HologramManufacturers Association. Scheer isMarketing Director of AuthenticationSolutions at JDSU.

Nicole Bohorad (MBA ’05), of NorthBergen, NJ, has launchedParentville.com, a give-and-get recom-mendation site for parents.

Jeffrey M. Galak (BS ’05, MPhil’08, PhD ’09), of New York, NY, hasrecently joined Carnegie MellonUniversity’s Tepper School of Businessas Assistant Professor of Marketing.

Simon Samaha (MBA ’05), ofHaddenfield, NJ, has been named to theOverlook Hospital Foundation’s Board ofTrustees. He is President and CEO ofSummit Medical Group.

Austin Smith (MBA ’05), of NewYork, NY, has been named ExecutiveDirector of the Sports Foundation, aSouth Bronx-based nonprofit communityorganization that works to promote thesocial development of at-risk youththrough their participation in communityevents, activities, and programs. Smithwas previously an associate with BIO-IB.

Alexander von Perfall (MBA ’05), ofNew York, NY, has joined RoyaltyPharma as Vice President of InvestorRelations. Previously, von Perfalladvised the International FinanceCorporation/World Bank Group on thesyndication of media sector private equi-ty investments.

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50 Sternbusiness

Sternbusiness 51

Adi Blum (MBA ’06), of New York, NY,has been promoted to Vice President ofHigh Road Capital Partners. Previously,Blum was employed by Citigroup GlobalMarkets.

Elijah Kaplan (MBA ’06), of Teaneck,NJ, has been named Vice President ofCapital Markets with Hudson CapitalPartners, LLC. Previously, Kaplan servedas Vice President at Albion.

Ian M. MacGregor (MBA ’06), of NewYork, NY, was recently married to Erica K.Almquist. MacGregor is the owner andPresident of the Lobster Place, a seafooddistributor in New York.

Rakesh Mani (BS ’06), of Mumbai,India, has joined Teach for India, where hewill educate low-income, third grade stu-dents. Previously, Mani worked forJPMorgan Chase & Co.’s fixed incomepractice in New York.

Timothy R. McDermott (BS ’06), ofWilmington, NC, has joined Hodes Weill &Associates as Associate. Previously,McDermott was an analyst with the RealEstate Investment Group.

Narendra D. Chokshi (MBA ’07), ofNew York, NY, and his wife, Anu Kapur, arehappy to announce the birth of their son,Akshay Chokshi, born on July 1, 2009.

Terry Kim (MBA ’07), of Derby, CT, wasrecently married to Elizabeth Edmonson.

Jared Kushner (MBA ’07), ofLivingston, NJ, recently married IvankaTrump. Kushner is the Publisher of theNew York Observer. He is also Principal inthe Kushner Companies.

Sorush S. Abboud (MBA ’08), of NewYork, NY, has joined APS FinancialCorporation, the financial services sub-sidiary of American Physicians ServicesGroup, Inc., as Executive Director.

Megan Morse Barbour (MBA ’08), ofNew York, NY, and her husband, Wes, wel-

comed their first child, Tessa, onNovember 23, 2009.

Kyusik Chung (MBA ’08), of SanFrancisco, CA, was recently married toAmanda Chen Marr. Chung is the CEOand founder of Discoverreads.com, awebsite that analyzes people’s readingpreferences and recommends booksbased on their statistics.

Ross B. Freedman (MBA ’08), ofNew York, NY, was recently married toDr. Beth Rachel Cutler. Freedman isPortfolio Manager at BAM Capital, ahedge fund in New York.

Noreen Haider (MBA ’08), of NewYork, NY, was recently married toEdward J. Jones. Haider currently worksat BNP Paribas, where she analyzescredit on the syndicated loan desk.

David Kull (MBA ’08), of New York,NY, was recently married to MichelleMulbauer. Kull is the Director ofBusiness Insights at American Express.

Michael Gorman (MBA ’09), of NewYork, NY, has been appointed to CowenGroup’s REIT research team. Gormanwas most recently Senior Financial andReal Estate Analyst in the REIT practiceat Gerson Lehrman.

Adam Storch (MBA ’09), of NewYork, NY, has been named ManagingExcutive of the Securities and ExchangeCommission’s Enforcement Division.Storch most recently worked as VicePresident in the Business IntelligenceGroup at Goldman Sachs, & Co.

Mark Warren (MBA ’09), ofMiddlesex, NJ, has been namedDirector of Candidate Services at theDemocratic Congressional CampaignCommittee (DCCC). The DCCCCandidate Services Department pro-vides support and guidance for thecampaign programs of DemocraticCongressional candidates, Red to Bluecandidates, and Frontline Members.

Edward Chapman (BS ’28)

George Henkle (MS ’34)

Professor Frank J. Angell (BS ’41)

Alexander W. Gallo (MBA ’42)

John H. Leonard (BS ’42, MBA ’51)

Saul Weinberger (BS ’46)

George R. Olsen (BS ’47)

Vincent A. Cortese (BS ’49)

Robert M. Sandelman (BS ’49)

Professor Ely Kushel (BS ’50, MBA ’51)

Kwok-Choy Leung (MBA ’50)

John J. Simpson (BS ’50, MBA ’53)

Emanuel Weinrod (BS ’50)

Clement V. Mannella (BS ’51, MBA ’52)

Jack I. Sloane (BS ’51)

Vivian Patton (MBA ’52)

John O. Chamberlain, Jr. (MS ’57)

Leon Vestyck (BS ’57)

Colonel Carl J. Bordiga (BS ’58)

Y.O. Park (BS ’64)

Wade F.B. Thompson (MS ’65)

Thomas W. Henry (BS ’68)

Benjamin S. Neuhausen (MBA ’73)

Stephan Wojcechowskyj Jr. (MBA ’79)

Phyllis J. Karno (MBA ’81)

Marcel Tratner (MBA ’81)

Carol E. Sherwood (MBA ’82)

In Memoriam

Ely Kushel (BS ’50, MBA ’51)Beloved NYU Stern Professor

If you would like to make a gift in memory of “Mr.Accounting” to the Ely Kushel Fund, please contact the

Office of Alumni Relations & Developmentat (212) 998-4161.

Most schools and universities nur-ture legends of intellectual giants whoonce strode their corridors like colossi,holding packed lecture halls in thrall.NYU Stern is no exception. Of the 20thcentury thinkers who established theSchool’s reputation as a serious insti-tution, Marcus Nadler (LAW ’26), aleading financial economist, was by allaccounts one of the greatest.

His life story shows the grit, deter-mination, and street smarts of manyimmigrants to this country. Accordingto a reminiscence written by Nadler’sson, the late Paul Nadler (himself abusiness school professor), Nadler, bornin 1895, was “a typical boy from therural mountains of the Austro-Hungarian Empire.” Exceptionallybright, however, he won a scholarshipto the University of Vienna, one of thesmall quota of Jews allowed to attend.While still in college, he joined theAustrian army as an officer in WorldWar I. He was captured by the Russiansand sent to a Siberian prisoner of warcamp where, according to family lore,he learned English.

When Russia quit the war in 1917,Nadler determined that as a Jew hewould be better off in America. Hewent east to Manchuria and at war’send made his way to America. Whileemployed at the New York Post Office,he attended Columbia University, thenworked at a bank, and later went toWashington to work for the Fed, withan interruption to study law at NYU.

Around 1927, Nadler began whatwas to be a fruitful, 38-year associationwith NYU’s Graduate School ofBusiness Administration (GBA), asStern was then known. NYU was start-

turers Hanover Bank, he still kept hisoffice door open to students.Generations profited from his guid-ance, among them Henry Kaufman(BA ’48, PhD ’58). Before taking hisPhD orals, Kaufman recalled, Nadler,his thesis advisor, coached him with abit of practical advice: “Take yourtime answering, because if you speakquickly, the examiners will have timefor more questions.” Nadler’s interestin his students extended to theircareers. Said Kaufman: “He wasinstrumental in my getting to theFederal Reserve of New York fromcommercial banking, and he gave megood advice for going into privatebanking: ‘You will quickly learn if youcan sink or swim, and if you go toSalomon Brothers you can hear thecash register ring every minute.’”

As with other great minds, theredeveloped, in the mid-1960s, a circleof Nadler disciples who called them-selves the Money Marketeers. AlthoughNadler, a heavy smoker, died in 1965of lung cancer, the group still meetsregularly with a full roster of mem-bers, though those who actually sat atthe master’s feet are diminishing innumber. The Money Marketeers clubattracts distinguished speakers at itsmeetings and annually presents smallmonetary awards to outstanding grad-uating MBA students and a $5,000scholarship to a promising currentMBA student.

For its part, the School has memo-rialized Nadler in the eponymousfinance and economics professorship,currently held by William Silber, aswell as a named doctoral fellowship.Nadler’s son wrote this more homelytribute: “My father used to tell me thatthe two traits he had that helped himthe most in his career were a gypsyfortune teller’s insight and an ability tosleep with his eyes open in meetings.But I feel it went a lot further. It washis humanity in addition to his knowl-edge that stamped his life.” ■

MARILYN HARRIS is editor of STERNbusiness.

ing an institute to determine the worthof defaulted foreign bonds owed to theUS after WWI. In Nadler, it found adirector who knew Europe and financeand could develop statistics and stud-ies for bond holders. The School soonrealized Nadler would also be a valu-able addition to the faculty. Accordingto Paul Nadler, “His English wasuncertain, but the man who hired him,Dean John T. Madden … saw the bestin people. Despite my father’s protesta-tions that his English was poor, theDean said, ‘You can teach.’”

As it turns out, Nadler was anexceptional teacher, despite his heavyaccent. According to Marcus NadlerProfessor of Finance and EconomicsEmeritus Robert Kavesh (BS ’49), whowas hired as Nadler’s eventual replace-ment, Nadler’s evening lectures onmoney markets drew packed audiencesto the School’s Trinity Place campus:“Thousands of students over the yearsflocked to his classes after their work-day on Wall Street, and Marcus wouldhold forth. He spoke deliberately, andyou felt the words were coming fromthe brow of Zeus.” His influence wasconsiderable. When in the ’30s therewas talk of closing GBA, Nadler almostsinglehandedly fought to maintain theSchool, and he prevailed, Kavesh said.

While Nadler remained a respectedconsultant to the federal governmentand wrote newsletters for Manufac-

PastPerformance

52 Sternbusiness

Marcus Nadler: The OriginalMoneyMarketeerBy Marilyn Harris

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