Thursday, May 13, 2010

GEICO's John J. Byrne Regains His Sanity

As a longtime GEICO policyholder I've long admired John J. Byrne, the man Warren Buffett hired to run GEICO, which he turned into a powerhouse that also provides terrific customer service. So I was saddened to hear about his slide into senility.

Yes indeed. Sad, isn't it? His own son, CEO Patrick Byrne, said as much in an interview with CNet four years ago, at a time when the elder Byrne, then the non-executive chairman of Overstock, was critical of his wack-a-doo son's paranoid anti-short-selling campaign.

Chairman John "Jack" Byrne called Overstock CEO Patrick Byrne's fight distracting. The younger Byrne is waging a public-relations and legal battle with short-sellers and analysts he contends are conspiring to depress the company's stock price.

"I can't tell whether this jihad adds to the value of the stock or subtracts from it, but what it does is take from Patrick's time," the senior Byrne said in a Wall Street Journal story on Thursday. He said his "headstrong" son has ignored his pleas to drop the fight.

John Byrne said he'd seriously consider stepping down as chairman after stockholders meet next month, but would remain on the board as a director.

In fact he did step down as chairman and then from the board entirely. In the Overstock tradition, the widely publicized reason for his leaving the board was tastefully and fraudulently omitted from the company's SEC disclosures.

Such comments meant only one thing to Patrick Byrne--his father was mentally ill. He told CNet:

"You know, when you're 74, you feel differently every day, based on what you have for breakfast that morning," the younger Byrne said of his father. "I never really expected him to get this fight."
Poor man. Well, you'll be pleased to know that John Byrne is no longer drifting into dementia. He's now 78 and sufficiently in possession of his faculties to rejoin the Overstock board of directors.

"My father brings tremendous wisdom and experience, which will help Overstock continue to grow and mature as a company," said Patrick Byrne. "I am pleased that the Board of Directors nominated him, grateful that he was elected by the stockholders, and look forward to working with him again."
It will be interesting to see if John Byrne "drifts into senility" again by taking issue with its thug-in-chief, or instead chooses the route taken by the rest of Overstock's board of directors--which is to do nothing in the face of rampant securities fraud.

© 2010 Gary Weiss. All rights reserved.

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