One on One with Xerox Chairman & CEO, Anne Mulcahy
Monday, February 26, 2007
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SUSIE GHARIB: Corporate America has called on Xerox Chairman and CEO Anne Mulcahy to lead the way on the difficult issue of corporate governance. Mulcahy was named today to chair a corporate governance task force for the Business Roundtable whose membership is made up of CEO's from many of the nation's biggest companies. This afternoon I sat down with Mulcahy and asked her why she took this job.
ANNE MULCAHY, CEO, XEROX: I think I've always been challenged on speaking out on tough issues rather than kind of trying to stay below the radar screen. And there is something important about getting out there and I've learned that lesson in Xerox. We have tough things to talk about. It doesn't help to go silent.
GHARIB: As you know Anne, CEOs and corporate America don't really have a very good reputation these days, whether you're talking about executive compensation or back dating stock options. What can you do to change that?
MULCAHY: Focus on the facts and really build on the transparency that has become appropriately a priority in terms of sharing what actually is happening at corporations today. And the other piece of it is also influencing the greater business community. I think there's an opportunity here as a group of CEOs to influence what is more appropriate, whether it's boards or (INAUDIBLE) or executive compensation. There's a whole host of issues that need to be talked about. Going underground is not a good thing if you hope to both do a better job and also really change the reputation of corporations in a positive way.
GHARIB: As a CEO yourself, when you hear a headline like, the CEO of Home Depot is getting a $200 million severance package, what is your reaction?
MULCAHY: Boards and CEOs and executives have to behave appropriately together and that that has to be a very dynamic process and that there are no guarantees in terms of executive compensation and that's a principle we certainly believe in at Xerox and I think it really helps us to do the right thing.
GHARIB: In Washington, there are law makers who are talking about reforms, maybe putting a cap on executive compensation. How much is too much?
MULCAHY: I think that we've got the right governance in place. It just has to be appropriately empowered to do the right thing. And this is an area where the unintended consequences of political legislation could quite frankly be worse than the problem itself. And I'd love to help influence the fact that corporations and their boards really need to take this one on and be responsible and that's really where it belongs.
GHARIB: Let's talk a little bit about Xerox. Now that you've turned the company around, earns are up, debt is down, what is your strategy?
MULCAHY: Transitioning the world to color, a big area of opportunity, ensuring that the commercial, the graphic communications industry goes digital, another big opportunity for us. Growing our services business, our document services business, which is already delivering very much of a value-added set of solutions to customers and getting better penetration on the SNB (ph) market where we haven't been as active.
GHARIB: You talk about color. You talk about growth. Revenues in 2006 were up only 1 percent. Will color printing increase sales?
MULCAHY: Absolutely. Today about 10 percent of the pages are being printed in color. We'll double that within the next couple of years and when you look at the leverage of color on both profit and revenue, it will certainly be moving from a third to a lot closer to a half of the total revenue portfolio of the company.
GHARIB: I see that you've been making acquisitions and you've said publicly that you want to do more. What kinds of companies are you looking for?
MULCAHY: We've said we're not looking for the big transformational acquisition where we'll double the size of the company. Our aspirations are somewhat more modest, but we're also opportunistic in the sense that if we find a great company that will be a great return for our shareholders and fit within our strategy, we'd love to take advantage that have.
GHARIB: Speaking of shareholders, Xerox stocks has been on a roll and it's hit some new highs. For investors who have been staying away from Xerox stock, what's your pitch?
MULCAHY: I think it's track record. It counts for a lot and I think the last six years have been spent building a track record and credibility that set the great foundation for trust and building that trust with our potential investors.
GHARIB: Anne, thank you so much, great talking to you.
MULCAHY: You too Susie. Thanks very much.
