Intrigue at Hearst's Castle

What You Should Have Read, June 20, 2008

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Intrigue at Hearst's castle

Fortune's Richard Sikos notes that the abrupt departure of Hearst CEO Victor Ganzi offers a rare look inside one of America's most mysterious media companies. Hearst is private -- which isn't just to say that it's privately owned, but that its highest echelons have the mystique of a kind of secret society. And one of the qualities of this society is that its members don't leave. This culture stems from the trust that The Chief, as William Randolph Hearst was known, set up. The trust is basically run for the benefit of heirs who The Chief would never know; it's meant to dissolve when the last remaining Hearst who was alive when he died passes on -- actuaries hired by the company have pegged that at 2045. Today, there are some 60 beneficiaries, but Hearst wanted the trust in the care of non-family members. Of 13 trustees, his will mandated that eight of them are non-family. Accordingly, most of the current trustees are current and former Hearst managers, and the board of trustees oversees a separate 19-member corporate board. Frank Bennack Jr., 75, Hearst's vice-chairman and Ganzi's predecessor as CEO for a 23-year-run during which some of the company's game-changing investments in cable channels were hatched, will take over as CEO while a search committee is formed to find a replacement for Ganzi.
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