The Herald Statesman from Yonkers, New York on June 5, 1983 · 79
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The Herald Statesman from Yonkers, New York · 79

Yonkers, New York
Issue Date:
Sunday, June 5, 1983
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V Gannett Westchester Newspapers Sunday, June 5. 1983 - Section II From page one . J. V:. Milton Bradley makinga move in video games By Independent Press Service . BOSTON Milton Bradley Go., the Johnny-come-lately to' the video ana home computer-.phenomenon, is hiring to ride into Atari-like with computer accessories-and software. Street, after two years of doubt, is cautious-imistic. ving treaded water for nearly two years and seen profits zapped like space ship aliens while Atari, Mi Mattel and, recently, Coleco scored with video game players, Milton Bradley is betting on the $1 billion software aftermarket, called '" .entertainment, games.. Thats the nest generation of arcade aiia original video game cartridges . and children's learning tools.. . The 123-vear-old Springfield. Mass., com - bestlmown for such family board game sta - "Risk?' Candyland."and Chutes and Lai - desperately needs another "Simon," the enor- - mously popular hand-held electronic game that - propelled Mjlton Bradley to become the Atari of 1980. So with an estimated 2.4 million to four milium computers in American homes, Milton Bradley is developing .both electronic technology - for computer accessories and games to gain a foothold in the burgeoning home' computer game market. Milton Bradley knows it cannot play hardball in the base hardware unit, but it can make a. - contribution to the peripheral market, which is less competitive, ana the software market, said Harry E. Wells III, the investment analyst who follows the company for Adams Hark ness and ' . Hill of Boston. Under a joint marketing - arrangement with Teias Instruments and Atari,' it will develop a ' series of computer cartridge games that use a - company-developed.voiccjccognition Jod speech . synthesis "chip. This chip, which Milton Bradley licensed to General Instruments -of Hicksville, N.Y., to manufacture, is the' heart of the firm's:-first wave of entertainment games. The new . voice command computer game cartridges synthesize human speech and respond . to 18 spoken words. The games will be manufac-' tuipd and marketed by Texas Instruments and Atari, for their respective computers a strate-. gy that will keep Milton Bradley from big re-.- wards that might be possible if it controlled the production and distribution. . By comparison, arch-competitor Parker - Brothers of Beverly.- Mass., will unveil its home computer cartridge plans next month,. and has been, manufacturing and-marketing arcade and movie video games for nearly two years. Its first - two earnest rought in more than $40 million: - - - we couldn't structure -the deal with Texas Instruments differently. said George R. Di torn assi Jr., executive vice president of marketing. "If we had our choice, we would have made them . Milton Bradley is counting heavily on Texas home conr- -com Instruments, which shipped 600,000 puters last year and is expected to produce close to 2.5 million units this .year. '.They have tied their fortunes to a good manufacturer with Texas Instruments,- said Harold Vogel, the consumer product analyst for Merrill Lynch Pierce Fenner k Smith. Milton Bradley may do well long-term, leaving the high risk and leading edge pf home ter hardware technology to others." ' For Atari, Milton Bradley will develop 18 new . games over the next three yearj that will fit the estimated 12 million existing game players. If the new voice and speech games are successful, Milton Bradley will reportedly convert some of Atari's older games to the new voice recognition format. We're jirimariy a game manufacturer,, said Ditomassi. "That's what we do best." For about $100, Texas Instruments will sell a small box containing the electronic speech synthesis and voice recognition chip and additional computer graphics electronics. It will have a 64-' key membrane keyboard and loudspeaker. In addition, a pushbutton, trigger , and swivel joystick. plus a headset microphone,' plug into the expander box. which is connected to the computer. The company's first success is expected to be -Championship Baseball. The names of actual baseball players, such as those on the Boston Red -then-fiel computer. One heir-field ' positlunsTIrtrspdlteiriiUoThe problem with voice recognition, however, is background noise a problem found in even the most sophisticated industrial voice .systems. Another concern is confusion. In one demonstration. the computer had difficulty differentiating between left , field and Winfield?' the megabuck New- York Yankee slugger, because both ended in field. - Stiir under development are football and tennis games, along with other applications of the new technology. . To compete in the market today, you'd better rketii Hey .hi of Child World, the Avon-based 79-store chain. "Their MBX system is different from anything else we have been exposed to on the market." Whether Milton Bradley will be a successful late-bloomer remains to be seen. For misjudging the opening round in video gamespftHton Bradley paid the price. Revenues have declined by nearly $60 million to $360.2 million in 1982 versus $42Q.7 million 'in 1980. And profits have skidded . to their lowest levels in four years: $19.2 million, or $2.60 per share. Still, the company continued, ..through the good and bad, to pay $1.20 dividend it three years. had our hands full with electronic . games, said -Ditomassi,- who . triumphed with. Simon, but, unlike Coleco, didn't make the . switch to video game players fast enough. Milton Bradley, like Parker Brothers and traditional game and toy companies, are finding themselves having to change the nature of their business at a very rapid rate, said Clive Smith, consumer electronics analyst for the Yankee Group, a Boston market research firm. They are and that's in the entertainment quite a Switch. As late as last November, Bradley showed selected retailers a videohome computer hardware box that reportedly got mixed reactions. The company scotched production plans. Toy Industry executives, however, were su-prised last summer when Milton Bradley -hurriedly entered the video game market by buying the assets of General Consumer Electronics Corp., a former Atari Sajjta .Monica, Calif., group of executives who built the Vectrex brand video game console. -. The deal was signed too- late for Milton Bradley to put its own name on the hew Vectrex players for the Christmas Selling season. Thus, there .was no brand-name identification. Vectrex cost the company $1.4 million in after-tax losses attributed to start-up costs. Ditomassi, however, claims Vectrex is selling well-jn Europe. ip llin V 8 12 SALARIES h Thcscbrou'gh-Ppndx, is - paidly-wrelatively- pxidest- From page HI 1 to get top quality management well? you guessed it you have to pay for it. And corporations do. A check of 20 publicly held major companies' based in the WestchesterFairfidd area finds that the pay (salary and bonus) plus the benefits received by the top executive at these businesses ranges from a high of $1.2 million to a low of $310,000. It is important to note that the companies included in this area Executive Salary Scoreboard vary greatly in size, earnings and profits. It also should be recognized that the stock, option component, a key element in the total compensation packages of most chief executives, is not included in the tabulations. Another factor worth noting is the fact that only publicly held companies are covered. Privately held businesses, some' of which are very large, are not required to disclose salary information -and usually don't. This means, however, that some very $476,000 inasalary and bonuses. But when his additional benefits ore-added his total package hits $686,000. . Similarly, J. Carter Bacot, chairman of the Bank of New York, hasuja salary of $342,000, but his total -package pays him $555,000. . . Not all of the executives in the survey have seen their salaries rising. For example, W.. Thomas York, Chairman of AMF Inc. in White Plains, took a 36 pay cut, his salary slipping from $639,000 to a more modest $410,000. And Pierre Gousseland, head of, Greenwich-based AMAX -Inc.,, took an even larger cut plummeting from $690,000 to $429,000. ' In both instances, the salary cuts were brought on by . poor financial performances by their respective -companies. AMF.' which has long been knowfi for its leisure products such as bowling, skiing and sailing equipment, had invested heavily in oil drilling equipment in the lari five years. Unfortunately, the world oil surplus has curtailed drilling operations worldwide. and AMF's business involvement collapsed. AMAX; a metals and mining company,, has faced disastrous problems because of the near collapse of r such once lucrative areas as copper mining. The company has been battling to survive. . Salaries alone do not always present a clear picture of the earnings package of a thief executive . For example, Ralph Ward, chairman of Greenwich-based ChesebroUgh-Porids; is paidly a relatively modest $476,000 in salary and bonuses. But when his additional benefits are added his total package hits $686,000. large earners in the Westchester area, escape mention here. At the top of the list among the' executives in the survey is IBM's Chairman -and Chief Executive John Opel. The 58-year-old. top man' with the area's , top ',employery(a'pproximatcly 14.000'in Westchester alone) -is-listed in the company's proxy .statement as having made $900,7.42 in salary, -fees and incentive awards in 1982. He also picked up $366,663 in securities, insur; ance and other benefits for a grand total $1.267.405. Bigdollars, to be sure, but then IBM is a big company. It ranks sixth on the Fortune 500 list Of the nation's largest industrial corporations, a gain of two places over the year before. ' But perhaps more significantly, the. company's success in the computer and office equipment field in the last year has been strong. In a field (high technology) which is universally regarded as the top growth area in all of. business, it can be argued that. the man leading the leader deserves to be the income leader, ' Running a distant second, to Opel in our chart is Theodore Brophy, chairman of Stamford-based GTE, a telecommunications company. His salary and bonuses totaled $787,000. Combined with beneifts of $17,000, he came in second at $804,000. In the third Spot is the head of another Connecticut-, based company. Louis Bantle, 54, chairman of U.S. Tobacco in Greenwich, was paid a salary of $730,000 and received benefits .of $28,000, in 1982 for a grand total of $758,000. . . It. is interesting to note the size of Bantle's company compared to IBM. In 1982 U.S. Tobacco, best known for its brands of chewing tobacco such as Skoal, had sales of $320 million and net earnings of $55- million. IBM's sales for the year Were a staggering $34 billion, and its net earnings were $4.4 billion. It makes Bantles earnings look pretty good or Opel's not so great. - But that's only one of the anomalies which show lip in this survey. Consider the difference in the pay given tothe heads -of two different-Westchester-based food industry companies. Stanley Kane, president of Kane-Miller Corp. in Tarrytown, which owns an array of interests in the food processing industry from fat rendering plants to bakery waste processing facilities, is paid more than James Ferguson, chairman of General Foods. General Foods, whose product stable includes such brands as Jell-0 and Sanka, is ranked 39th on the Fortune 500. Kane-Miller is 351st. . Kane's salary of $584,000 plus his benefits of $68,-000 bring him a total of $652,000. Ferguson's combined-earnings are $598,000; Yet, Kane-Miller's sales of $761 million and net income of $3.9 million pale next to GF's sales 'of more, than $8 Billion and income of $200 million.' ! . ' . , The difference in this case is that tie Kane family founded Kane-Miller. Kane is a major stockholder within the. firm. Ferguson is a professional manager .signed on by the giant GF. His percentage of the ownership in GF is tiny. As a general rule, smaller and Executive pay cuts are intended to be Symbolic as . ' The fact is that Fox, 45, who in his mid-20s acquired well as cost saving. The stockholders and the. employ- the company in a stock fight, holds the controlling ees of companies, faring poorly, like to see that every- interes? in Iroquois. He and members of his family own . one is biting the bullet, the top man included, as one large blocks of stock, and he personally owns more stockholder put it at an annual meeting this spring. than 8 of its stock. His salary, then' is not necessarily invar tharvery-subject that-was-annoying Mikeliied to the company's-performancer Ironically. Fox $tein of Greenwich, when he attended this spring ranked last. in both salary and bonuses among the -annual meeting of IroquoisBrands. 8trin, wboownslM ajagutives in our survey, shares of Iroquois, took a verbal swipe at Terence Fox, . . chairman of the Greenwich-based firm, fop getting a n pay hike when the company has been performing There is little doubt that the pay of top executives poorly. will continue to rise steadily in the years ahead. He complained that Iroquois Brands, whose prod- lthough depending on the inflation rate, the increases ucts include Champale malt liquor and Schiff Vitamins, "y 1 1 Hey lave n ome recent W1-reported a loss of $3.4 million in 1981 and net income And to find "million dollar men heading large cor-of just $1.3 million last year despite '81 sales of $147 porations will becomrmore common than it is today, aqd and $152 million in sales last year. . While the company was reporting such far from J ln ! "J f T impressive results, he Lid Fox' wlaryhad been steadi- ag h. Fr s IBM annual meeting: It . all ly rising. 'This year he got a salary increase of $50,000 retatlve. These men get paid a lot, but then they do (which brings him to $281,000 excluding income from take on a lot id responsibility. When you realize that other benefits). "How can this be ' justified? asfcdl professional athletes often are paid more than many of "Stein. ?There's no way it can when a company has done the top executives in this country, it doesn't seem like as badly as this one has. v. pay of executives is out of line." .more personal companies, particularly when a founder is- concerned, pay- better f Utah the giant multinational corporations. Salaries' alone do not always present a dear picture of the earnings package of a chief executive. For "example,. Ralph Ward, chairman of Greenwich-based Increases in executive comperisation Salary l j Total compensation in percentage increase over previous year - Chief executive officers Other executives 1981 : 1981 V-; , 1963 70 ZZZZZZ3a.o Projected Chicago Tribun Oraphc; Sourer Stem a Company. Inc.- ) y . . i . . ..

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