His reputation as Britain's highest paid executive has made the EMI Music boss a focus of tabloid fascination. Is it just a case of whingeing Brits or, asks Andrew Davidson, can his pay package be justified by the division's spectacular performance since his arrival?
There are times when it probably isn't easy being Jim Fifield. Early summer, for instance. 'Unfortunately,' says the EMI Music boss, in his deep American, mid-western accent, 'there's always a 30-day window when I have to hide from photographers.'
Really? Summer, of course, is when Thorn EMI publishes its annual report, and reveals to the regularly astonished British press the full size of Fifield's pay package. 'Yeah, I go through the servants' doors at hotels,' he drawls. 'I just don't want my picture taken. I don't think it is a relevant point to have a photo of me and an article about my compensation when we're having an annual general meeting ...'
Well, it's life, Jim, at least as we British know it. The UK tabloids' fascination with Fifield's pay package (between £7 million and £8 million annually plus the guarantee of a £1 million a year pension on retirement) and their habit of nicknaming him Lucky Jim has not exactly created a deep love affair between this particular executive and his company's mother country. In fact, the EMI boss has spent more time dodging the British press in recent years than talking to it, despite heading one of the country's largest entertainment operations. But now EMI is losing its Thorn partner, which is demerging to take its own stock exchange listing, there will be fewer places to hide. You can only wonder whether Fifield's new beard, grown after last summer's flurry of pay packet attention, is also designed to keep the British press on the hop.
But if you control a legion of the world's most successful entertainers and are reputedly Britain's highest paid executive to boot - even if you are American - you have to expect a little attention. One or two fund managers and the odd private company founder will occasionally pull in more money in Britain; few quoted company executives, however, get a Fifield-sized package on such a regular basis (£5.2 million in 1993; £8 million in 1994; £7.5 million in 1995; over £7 million again in 1996). The pay is huge because it is linked to performance, and the £2.6 billion-turnover EMI Music has, by any perspective, performed remarkably well since Fifield took control in 1988. It is also based on rates habitually paid to executives heading US entertainment corporations and thus theoretically stops him walking out at the drop of an even larger cheque.
We meet in his office overlooking Gloucester Place in London. Long blinds shade the room from the sun. Large, contemporary British canvases decorate the walls and a set of Paula Rego prints hangs by the windows. Fifield, tall, bulky and wearing grey slacks, a designer waistcoat and an expensive collarless shirt, escorts me in and gestures to a suite of sofas at one end. His manner is courteous and relaxed, but businesslike. His beard, which compensates for a bit of thinning on top, makes him look much younger than his 54 years. He brings a stack of papers with him, photocopies of lecture notes and finance figures which he thinks will help answer my questions. He had asked for the themes I had wanted to pursue in advance, and is clearly focused on providing exactly what I want.
Focus and drive, say those who know him, are what sets Fifield apart.
He arrived at EMI after stints at General Mills and CBS/Fox, armed with a reputation for being a stern, hands-on manager and aggressive marketer.
Lately, according to his colleagues, he has mellowed a bit. He is on his second marriage and the famously long Fifield working day has been cut since the arrival of a new baby. He already has two daughters who are nearly grown up. 'Yeah, I'm getting home much earlier than I used to,' he says. 'I'm really enjoying it.' As if to prove the point, he takes a long call from his youngest halfway through the interview. 'Don't forget to put that in your piece,' he grins, after a couple of minutes of baby talk. And he gives a low, gruff laugh, as if he has surprised even himself.
But if the days are shorter, the demands on his time still stretch long.
He runs EMI from an office in New York where he reckons to spend about a week each month. He also likes to spend a week here in London, and about two weeks on the road. 'The thing I like about my job is, I don't spend too much time behind my desk,' he smiles. He needs to be where the transactions are happening, he says. Then there are the shows to see and the stars to chummy up to. And, of course, the music to sell.
No problems, then, in leaping from food, toys and videos - his previous experience - into music? No, he says, he has always loved music and the business disciplines are the same as in other industries. 'You are still talking about return on capital, manufacturing, distribution, supply channel issues, marketing plans, spending plans, setting up of promotions. It is just that in the music business it is done at a much more accelerated pace.' The real difference, he laughs, is that, in the music business, the product has an opinion. 'You might have a great idea on promotion or packaging or what music to choose, but if the artist doesn't want to go along with it, if they don't want to tour, for instance, there is not much you can do.' That, he says, is what makes it so interesting.
What has impressed Fifield's admirers is how he has taken a business that has such variables, and was in such poor shape as EMI - number five among the world music giants in 1988, still living off past glories and making little impact in the US - and not just turned it around but also imposed old-fashioned disciplines such as return on sales, all at a time of turbulence in the industry as the format moved from vinyl to compact disc.
By any standards, the EMI Music figures are remarkable. In the seven years to 1995 Fifield has pushed sales up fourfold, profits up tenfold, and return on sales up from just over 5% to more than 13%. Last year EMI reported a 24% boost in operating profit to £365 million (the year before that the figure rose by nearly 20%). Now EMI is number three among the world music giants with a market share of around 15%, only a point or two behind Sony and Polygram. It also has over 30 million-selling artists - from oldsters like Frank Sinatra, the Beatles, the Rolling Stones and Tina Turner to new superstars like the country favourite Garth Brooks - compared to just five in 1988. Fifield's aim for the newly devolved business is for it to become 'the premier music company in the world'.
What's curious, of course, is how little is known about Fifield over here, despite his success. He ascribes his interest in music (he is a renowned blues buff) to his childhood. His father was a medical supplies salesman working out of St Louis, Missouri, and both parents sang in the local Methodist church choir. His father instilled in him a belief in corporate loyalty and an interest in marketing. Consequently when Fifield read a masters degree in business, he majored in marketing, and then later jumped at the chance to join General Mills, one of the US's largest food and packaged goods companies. He spent 20 years there, 15 in food, and five heading up the company's toy and retail interests in New York.
Then General Mills decided to sell its non-food interests. Fifield was offered the choice of going with the sold subsidiaries, returning to a lesser job at General Mills or quitting with a redundancy cheque. He quit, sore that his father's dictum of corporate loyalty had let him down but determined, at 43, to start a new life. Instead of going back to the food business, he looked around for something different. Out of the blue he got the perfect offer, to head the new CBS/Fox video operation. It was ideal for a marketer, selling a packaged product - movies on videos - that had already been pre-sold through their theatrical release. It also proved to be a new boom market. Fifield went from strength to strength, setting up overseas operations, handling the public furore over the effects of so-called video nasties, finding new niches for products which, in many cases, the studios didn't really know what to do with. He also got his first taste of the music business, selling music videos by the likes of Billy Joel and Barbra Streisand. He was hooked.
But it took Thorn to reel him in. Despairing of ever finding anyone inside the music industry to sort out Thorn's music interests, Sir Colin Southgate, then chief executive of Thorn EMI, had instead approached a New York search firm with a brief to find an executive with complementary skills from outside the industry. Fortuitously the agency had Fifield on its books from his pre-CBS days. Southgate says it was the American's operational experience that caught his eye. 'To me, his real skill is his dedication to the day-to-day operation of the business. He is very focused on that.
It was such a relief for me, so I could concentrate on setting the strategy for acquisitions and growth.'
And so it has panned out. Southgate, now chairman, and Fifield have spent around £1 billion on expanding EMI Music since 1988, mopping up operations like Virgin, Filmtrax and Chrysalis. Southgate buys them, Fifield slots them in and runs them. Many have accused Southgate of overpaying, particularly at the time of the Virgin acquisition (for £560 million in 1992) but whatever Southgate pays, Fifield seems able to squeeze out economies.
How does he do it? Fifield rifles his stack of papers. First, he says, you have to understand what EMI was like: a music company with a good back catalogue and a good roster of artists in the UK, but badly organised, underinvested and fast getting left behind in the global market. It had good international presence, but it was multi-territorial, rather than multinational, as its subsidiaries were run like fiefdoms and hated helping each other. The situation was typified, he says, by the fact that EMI seemed to be run by fax, but had hardly any fax machines, so staff had to spend hours waiting by the machines to use them. There was also the difficulty that his predecessor liked to work out of Los Angeles while his financial and communications staff were based in London, an extremely limiting time lag.
He turned it around, he continues, by attacking the culture, introducing new planning processes, pumping in more money and more entrepreneurial individuals. Most important of all, he says, was establishing 'a winning culture'. It did not make him popular. To this day, there are some in the British music industry who believe he was unnecessarily brutal about it, making unreasonable demands on many of his executives. Fifield shrugs.
'An organisation like this is basically against change and you have to take the tough road. You can't play what I call Mother-May-I. Everyone was just happy doing the kind of mediocre job they were used to doing.' Others point out that in an industry where the division between work and play is so hard to draw, many of EMI's staff were out to lunch rather more often than even the music business would credit. This, of course, was one of the reasons Southgate wanted an outsider to take it by the scruff of the neck.
Does Fifield feel EMI's problems were peculiarly British ones? 'No,' he says smoothly, 'it had nothing to do with it being British at all.' In fact, he makes plain, he doesn't really see EMI, which makes about 20% of its sales in Britain, as a British company. The problems were simply about management focus, and Thorn's difficulty in getting control of what was going on. The improvement in return on sales was achieved, he continues, by breaking all the business issues down - cost, customer satisfaction, productivity - and deciding where the best financial improvments could be made. To those headings Fifield added his own equations of return on time (how hard something is to do) and return on ego, 'because obviously some things, like downgrading everyone's cars, bruise people's egos without that much return. It's just not worth it.'
Most of it was basic fast-moving consumer goods manufacturing and marketing stuff which EMI had managed to sidestep as not being appropriate for the music business. 'Once you start looking at that kind of data, you can quickly develop a set of priorities that matches up customer benefits, return on time and economic benefits, and start running those together,' says Fifield. He makes it sound as easy as falling off a log. Those who know the industry say it isn't. Fifield basically micromanaged everything for the first five years, making sure money was going into the right areas, getting the right deals with the right artists and ensuring he got the right support from his parent company Thorn.
It's a personal style that hinges on a genius for reading a balance sheet and immediately knowing what a firm's problems are, according to Southgate. Fifield is also very good at explaining to others what they must do, at spelling out the goals and setting timetables for achieving them. These are tremendous assets when you run firms in 39 countries.
'And he does it all travelling without an entourage,' says Southgate.
'Often it will just be the two of us together.'
As it will be again when EMI loses its Thorn link this month. Southgate will remain chairman, Fifield chief executive. EMI will include a smaller, separate division for the retailer HMV, which will report directly to Southgate to avoid any conflict of interest. Even so, in its easier-to-swallow size, EMI will be an immediate target for many of the big media groups. Both Fifield and Southgate insist, however, that a sparkling financial performance and a high share price should ward off predators. Some of EMI's direct rivals would also face anti-trust cases in the US if they tried to make a bid and more likely buyers, such as Disney, MCA or even Rupert Murdoch's News Corp, which has no music interests, would have to pay a hefty premium to get it (between £6 billion-£7 billion, according to Music Business International magazine).
All of which suits Fifield fine as he says he wants to retain EMI's independence, insisting that its music-only focus gives it an advantage over those groups which have a mixed bag of interests. He does acknowledge, though, that sceptics think EMI's sale is inevitable and that, given the volatile nature of the music business, the demerger puts the company in an impossible position. Certainly one of the reasons Richard Branson took Virgin off the stock market eight years ago was because analysts and shareholders just didn't understand the industry. Has anything changed?
Meanwhile the big new opportunities for sales growth - getting a grip on piracy (which takes about £1.3 billion out of the industry at the moment), exploiting new technological opportunities and making further inroads into Asia and eastern Europe - may not be enough to keep figures spinning. Indeed there is even the whisper from rivals that the current figures from the US are already slumping. Last year EMI made record profits there but still only took number four position. 'The systems are in place, the infrastructure is state-of-the-art,' says Fifield, 'that's one of the reasons why we can have record profits.' So he just needs to find another Beatles? 'That would be great, of course,' he mutters with a wince.
Last year's Beatles' Anthology 1 album was one of the bestsellers driving EMI's US figures. Intriguingly, although it sold, the album was not critically well received over here. 'Of course it wasn't,' grimaces Fifield. 'That's Britain for you.'
Ouch. Fifield's prickliness on British attitudes is understandable but he has to be careful. It is no secret that the City has long believed relations between Southgate and Fifield have been strained over problems of control and, particularly, over the remuneration issue. Southgate, who earned £711,000 in 1995, laughs off the rumours as does Fifield. 'I was hired on more than Colin,' says Fifield. 'Colin has always been very mature about it.' One of Fifield's oldest friends, the artist manager Shep Gordon, who regularly has both executives to stay at his house in Hawaii, says that Southgate is actually one of the reasons why the American enjoys working at EMI so much. 'He would never leave Sir Colin. Jim feels he is the best chairman he could have.'
The pay issue won't go away, however. For the last two years, Fifield's package (a base salary of around £2 million plus two or three times that in incentive bonuses linked to profit performance and paid out in cash and shares) has had a whole page to itself in the Thorn annual report, an acknowledgement of how much it concerns British shareholders. It clearly irks the American too. When we met, shortly before the new annual report was out, he only had a draft copy of what might be in this year's. 'Yeah, it's all here,' says Fifield, sighing as he flicks through the pages, 'right down to my automobile allowance.'
Fifield's friends in the US think we have got our priorities wrong in Britain. 'How many people like Jim are there in this business?' asks Michael Solomon, the television producer and entrepreneur who used to own Lorimar.
Solomon is one of Fifield's regular trekking companions in Aspen, Colorado, where the EMI boss has built a second home. 'Success needs leadership and he has provided that leadership,' he continues. 'He's paid for performance.
That is how entertainment chiefs like Michael Eisner at Disney over here make their money. Everyone gains but the most important people who gain are the shareholders.'
So what does Fifield do with all the money? The EMI boss shrugs. 'Oh I put it into trust funds for my parents and my children, in the event that I am not around and they are,' he says coolly. The rest goes towards the new house where he keeps some of his music collection. There he has 3,000 CDs, part of what is reputed to be one of the best collections of blues in the world, filed in a music system run by an Apple Mac computer.
'It's great,' he says. 'You just go to the keyboard and select what you want to listen to by title or genre or artist, and the screen tells you what you've got and sorts it out. It's my hobby, you know.'
But he is not, his friends point out, a wildly extravagant man. And while he has his share of celebrity friends, as anyone in his position has to, he doesn't flaunt it. 'Hey,' he laughs with a bristly smile, 'I could have photos that make Richard Branson look like he wasn't doing anything.
But that's not what I am about, you know. I am a manager of a business, and the stars of the business are the artists, and that profile side of it is not something I have ever sought out.' Now EMI is its own company, however, that profile is going to search him out. It will be interesting to see how Jim Fifield and the UK press square up to each other in the years to come.
1942 Born, St Louis, Missouri, US Educated Southern Methodist University, Dallas, Texas
1965 Joined General Mills
1973 Divisional general manager, General Mills
1976 Vice-president, general manager, new business division, General Mills
1978 Group vice-president, consumer food group, General Mills
1980 Vice-president, toy group, General Mills
1984 Group executive vice-president of all consumer, non-foods operations, General Mills
1985 President and chief executive, CBS/FoxVideo
1988 President and chief executive, EMI Music
What people say
'Jim's critics tend to forget he is paid for performance. He has produced 31% compound growth in profits over the last five years. Ask any company from Glaxo downwards what they would say to that kind of growth. Ask any real shareholder too. They'd give give their right arm for it.' Sir Colin Southgate, chairman, Thorn EMI
'He is basically a very good marketing person and a good marketing person can market anything. He is the best in his business now, and he also has a wonderful rapport with the creative people too.' Michael Solomon, American entrepreneur and old friend of Fifield's
'Although we assumed he was on a substantial package, this was twice the $7 million estimate. Once the company embarked on the acquisition route, that in itself should have been sufficient to sustain a big margin growth without this enormous payout.' An analyst reacting to the announcement of Fifield's $13.5 million (£8 million) package in 1994
'His success is a combination of two factors: his passion for the music and his sense of profitability which comes from his corporate training. He understands the manufacturing and distribution business on a global basis in a way that others don't.' Shep Gordon, artist manager and old friend.