Entrenched Corporate Leader: Barry Diller

Barry Diller; Chairman & CEO
(IACI-NASDAQ) IAC/Interactive’s

A lot of stink was made over Barry Diller’s pay package last year when he reeled in close to $300 million.  Yes this is beyond a lot of money, even if the bulk of it came from options and there is no refuting that it might be too much.  But shareholders have been rewarded and the alignment inside the company is behind him all the way.  After all, he is probably directly responsible for each unit head being where they are.  Diller has a young team of managers under him, but they are not trying to sneak him out so one of them can fight for the top position and the losers can leave.  If that is in the cards, then it is a secret on the street.

Diller could be described as a three-headed hydra, but one that Wall Street likes.  He is part head hunter and talent manager, part face man, and part visionary.  Imagine rolling up the USA Networks with online and off-line properties like Expedia, Travelocity, Ask Jeeves, LendingTree, Ticketmaster, and many more.  He even acquired Expedia and then rolled it back out as its own public stock again (with himself in charge and his own picked team in place).  The company is a conglomerate and determining the earnings for the whole organization can be like a blind Eli Whitney running a cotton gin. It doesn’t matter that his ownership is less than it used to be.

Diller is roughly 65 years old, and acts like he has the energy and vision of someone 45.  How do you not love a guy that could convince Wall Street that even if they can maintain 2% of Internet Search market share that it can end up being a huge win?  Investors can bring up pay packages until the end of time, but Diller is no Nardelli.  If any real traction calling for a Diller-reform were to start, he’d be able to round up the institutional support in a heartbeat.  Try calculating how much his roll-ups and spin-offs have generated in investment banking fees on Wall Street.  You don’t have to like Diller, but you might as well accept him.  He’s there as long as he wants to be.

IAC/Interactive (IACI) $38.40; 52-week trading range $23.54 to $38.73.

As a reminder, here is the link back to the introduction and guidelines of this CEO segment.

Jon C. Ogg
January 17, 2007