Birthday for Bob

Exactly one year after he won control of the New York Central Railroad, pugnacious Robert R. Young and his stockholders set out to celebrate his first birthday as boss. For the 800 stockholders who gathered in Albany for the annual meeting last week, the party turned out to be a rough and rowdy celebration.

For two solid hours, the room was in an almost continual uproar. The fireworks came from a handful of disgruntled stockholders led by two expert management baiters, Lewis Gilbert and Mrs. Wilma Soss. Gilbert and Soss wanted to make sure that the stockholders remembered that Chairman Young had changed his mind on two important points. One change was his decision to ask the stockholders to pay the $1,300,000 expense of his 1954 proxy fight, even though he had led stockholders to believe at the time that he would foot the bill himself. The other was Young's opposition to cumulative voting for the Central's directors, an idea that he himself once championed. Young said he was still in favor of cumulative voting "in principle," but was against it at the moment. "Our legal climate," he harrumphed, "does not provide adequate safeguards to protect honest and efficient managements from the onslaughts of countless opportunists."

Shouting and waving their arms, Gilbert and Soss demanded a full debate on the two points, charged that Young was "railroading" the meeting. At one point, half a dozen stockholders were on their feet, all clamoring for the floor at once. Angry and red-faced, Chairman Young declared them all out of order. Finally, unable to bear the heckling any longer, he rammed through a proposal "that any disorderly person be ejected."

But for all the uproar, Bob Young had his way handily when it came to a vote. By 4,889,495 shares to 457,129, the Central's stockholders agreed to pay the bill for the proxy fight, and postponed any decision on cumulative voting by an equally wide margin. Every Central director was re-elected overwhelmingly, and the stockholders also approved a stock option plan for Central President Alfred E. Perlman, by which he can buy 32,000 shares at $19.88 per share, over a period of years, thus stand to net a capital-gain profit of $672,000 (at current prices).

As for progress, said Bob Young, it "borders upon miracle." In the face of a revenue drop of $34 million in the past ten months, the Central cut costs by $68 million, and turned in a $27.6 million profit, v. only $4.6 million in the preceding ten months.

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