EXCLUSIVE: BUFFETT’S STARTLING GIFT, BY CAROL J. LOOMIS
The world’s greatest investor plans to gradually give away the bulk of his Berkshire Hathaway stock, which is valued today at $44 billion. Most of it will go to the Bill & Melinda Gates Foundation. Full story available at www.fortune.com .

Bill Gates Reboots, by Brent Schlender, page 72 Microsoft’s founder on his decision to step aside, Warren Buffett’s gift, and why it all gets him a little choked up. Gates tells FORTUNE…The foundation work “is just as complex and interesting as what I do at Microsoft.”

The Real CEO Pay Problem, by Rik Kirkland, page 78
Voters are outraged. Big investors are demanding change. Even some CEOs admit there is a crisis. But rewards that defy all economic logic don’t simply spring from greed. Corporate America’s executive-compensation system is broken. Jeb Bush, Governor of Florida tells FORTUNE: “If the rewards become extraordinarily high with no link to performance, it undermines confidence in capitalism.” And, Hank McKinnell, CEO, Pfizer said: “Comp is being used [in] a battle over control of the corporation itself.”

PLUS Five Commandments for Paying the Boss, by Shawn Tully
The problem is not that CEOs make a fortune. It’s that they are being paid for the wrong things. Five ways to change that…Pay shareholders first, base bonuses on economic profit, do not rely on restricted stock, favor options cautiously, force CEOs to hold, not sell.

BRAINSTORM ’06: LIFE IN A CONNECTED WORLD, by David Kirkpatrick, page 98 What is the Internet doing to us? Thirteen years after the invention of the web browser, are we any smarter? Or are we just watching more porn and getting more spam? How big a deal is it that the world is increasingly connected? To help answer those questions, FORTUNE will host the 2006 Brainstorm conference in Aspen in late June in partnership with the Aspen institute. The theme: life in a connected world. Speakers as varied as Microsoft chief software architect Ray Ozzie, Senator John McCain, and Dutch Muslim feminist Ayaan Hirsi Ali will join CEOs, venture capitalists, technologists, and non profit leaders as we collectively try to understand the changes taking place in a world connected by the Internet and mobile phones.

SEE ALSO: A VIRTUAL ROUND TABLE: SEVEN THOUGHT LEADERS SOUND OFF ON HOW CONNECTIVITY IS CHANGING THE PLANET, interviews by Nadira A. Hira, David Kirkpatrick, Eugenia Levenson, Julie Schlosser and Patricia Sellers, page 103

• Thomas Malone, Director, Center for Collective Intelligence, MIT

• Chris DeWolfe, CEO, MySpace

• Hung Huang, CEO, China Interactive Media Group

• Martin Sorrell, CEO, WPP Group

• Gary Flake, Director, Live Labs, Microsoft

• Azim Premji, Chairman, WIPRO

• Rebecca MacKinnon, Co-Founder, Global Voices Online

WHO’S AFRAID OF NATHAN MYHRVOLD, by Nicholas Varchaver, page 111
Myhrvold, formerly Microsoft’s chief technology officer, retired six years ago from the software giant with a fortune that, it’s safe to say, runs well into nine figures. But instead of taking early retirement as a chance to relax, travel, and maybe dash off a unified field theory or two, Myhrvold has founded a firm, based in Bellevue, Wash., that has produced almost as much rage, terror, and ominous speculation as Microsoft once did. It’s called Intellectual Ventures, or IV, and it’s a combination private-equity fund and innovation hothouse. The plan, Myhrvold says, it to purchase and invent patents and then license them to manufacturers. Others see IV as something altogether more sinister. As Shane Robison, the chief strategy officer at Hewlett-Packard puts it, “They are a very large patent troll.” This conclusion alternately irritates and amuses the often amused Myhrvold. During a series of in-depth discussions with FORTUNE over several weeks, he cheerfully admits that “IV is a big investor in patents.” He then reels off a list of companies that have made huge sums by licensing patents, such as Lucent, Texas Instruments, and IBM, which generates more than $1 billion a year on its patents. “We want to build a portfolio just like those companies have… I want to achieve what IBM has achieved. That’s my financial model… I don’t see that as evil. I don’t see that as particularly threatening.”

Departments
FIRST Ben Bernanke Flexes His Muscles Investors may not appreciate the new Fed chairman’s free-speaking ways—recently, his words have moved markets, mostly downward. But he’s off to a strong start. On the Radar Russia’s giant oil IPO, feeding frenzy at an FCC auction, and labor woes for hotel owners. Policing the Internet Can Hemanshu Nigam keep MySpace safe for kids? 60-Second Briefing Why foreign firms are buying our toll roads. Access to Grind Studios and networks are suing Cablevision for offering access to stored TV programs. Disrupting Your Desktop Web-based business software Quickbase is transforming office work. Question Authority JetBlue’s David Neeleman chats about his plans to get back into the black…DISPATCHES The CEO Workout Stress is good. Multitasking is bad. Manage energy, not time. Is this the way of the 21st-century corporate athlete? COLUMNISTS Street Life A high-powered partnership enters the ETF market. Media Bubble Why do the Chandlers want to break up Tribune Co.? Value Driven Welcome to the imagination economy. INVESTING Bargain Hunting in a Stormy Market Fears of further rate hikes have rattled global markets—and created some enticing buys. The CEO Interview Ron Shaich focuses on making bakery-café Panera an all-day destination. BUSINESS LIFE Learning to Fly What does it take to push a finely tuned Maserati to its limits? FORTUNE Senior Editor Roger Parloff enrolls in the Italian automaker’s high-performance-driving school in Atlanta. Plus: Jonathan Alter’s new book on F.D.R., Life After Work, and more. Gadgets Motorola’s new smartphone has tons of features and a great price. Too bad it doesn’t thrill.

FORTUNE is available in digital format. To access this version go to http://mag1.olivesoftware.com/am/welcome/Time/Fortune/TFM-10-July-2006.asp.

 

For further information please contact:
Susan Brown Williams
212-522-0133
susan_williams@timeinc.com

Phil DiIanni
212-522-6282
phil_diianni@timeinc.com

 

 

Back to index