““CEOs go to their vacation homes just after companies report favorable news, and CEOs return to headquarters right before subsequent news is released. More good news is released when CEOs are back at work, and CEOs appear not to leave headquarters at all if a firm has adverse news to disclose. When CEOs are away from the office, stock prices behave quietly with sharply lower volatility. Volatility increases immediately when CEOs return to work.” —David Yermack, a New York University finance professor, whose recently released study shows a correlation between when CEOs take their private jets on vacation and movements in their companies’ stock price ”
Why David Sokol Refused My Interview Request
As you've probably read, NetJets chairman and CEO David Sokol resigned abruptly from that company and parent firm Berkshire Hathaway on March 28, after questions arose about his purchase of stock in a firm that Berkshire subsequently offered to buy.
Since then, his ways of doing business–and of dealing with the media–have been widely scrutinized. Much has been written, for example, about a NetJets lawsuit that was filed last November under Sokol's direction in an effort to determine which employees had provided information to Alice Schroeder, author of a Warren Buffett biography called The Snowball.
Reading so much about Sokol in recent weeks, I've been reminded of what happened late last year, when I asked to interview him for an article I was writing for Business Jet Traveler. The response wasn't like anything I'd ever witnessed in all my years as a journalist. I'm describing it here because it may shed some light on Sokol and the ways he operates.
I first met David Sokol last summer, when AIN monthly editor Nigel Moll and I spent more than an hour with him at Teterboro Airport in New Jersey. He had requested the off-the-record, get-acquainted meeting and told us that he wanted it to foster open, ongoing communication between his company and our publications.
Weeks later, however, Sokol was the only CEO of a leading fractional company who didn't immediately agree to an interview for my article. Instead, his assistants asked for a list of questions. I explained that our policy is not to supply questions in advance, partly because doing so would detract from spontaneity and because many questions arise in the course of an interview. I did, however, describe the terrain I wanted to cover.
After being told again that I must submit questions, I tried to compromise by sending a more detailed list of areas I planned to ask about. I initially heard back that Sokol would talk with me. But then came an email saying that NetJets wanted to "review the list of questions you have prepared and make any necessary changes."
I replied that, as I'd indicated earlier, we don't supply questions before interviews. I then provided even more detail about the topics I planned to cover. The reply: no question list, no interview.
At this point, I capitulated and sent a list of questions. But then came another email: "The request for a recording device was not approved." In fact, I had not made a request for the use of a recording device, but I do use one, partly to make sure I quote interviewees accurately. I explained this and got another "no" in response.
So I decided to appeal directly to Mr. Sokol, who had given me his email address at our first meeting and urged me to get in touch anytime. I wrote to him that I was puzzled by the no-recording stipulation, as I'd seen him interviewed on TV and in Web videos. I added that while I'd very much like to include his comments in my article, I was uncomfortable applying different interview guidelines for him than I had used with my other sources. Might he reconsider?
He would not. "In today's digital world," he replied by email, "it is far too easy for people to misuse parts of a tape recording in various out-of-context ways."
Shortly after I received this email, his office called me. I mentioned Sokol's response and asked whether I might supply a written pledge to use a recording for no other purpose than to prepare my article. The answer again was "no."
Given the importance of NetJets to the fractional-share industry, I decided after this call to make an exception and proceed with an unrecorded conversation. But before I could offer this concession, Sokol's office phoned to say that my email to him had represented a "breach of protocol" and that the interview was therefore cancelled, regardless of what terms I might agree to. That was the end of the discussion and the interview never happened.
I did run into David Sokol one more time, at NBAA's annual conference, in Atlanta last October. At that time, I told him I hoped we could find a way to discuss NetJets in the future. As I recall, he just smiled and said something like, "Hope to see you again."
Given what's transpired since then, I am fairly certain that's not going to happen.