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— Stephanie D. Smith
TWO ARE BETTER THAN ONE: After months of persistent rumors — and denials — the departure of Susan Lyne as chief executive of Martha Stewart Living Omnimedia Inc. after four years in the job came as little surprise to media observers. But her replacements did. President of media Wenda Harris Millard had long been seen as a potential successor; it was the elevation of president of merchandising Robin Marino to co-ceo with Millard that was unexpected. Lyne's contract expired in December and, according to a company spokeswoman, was automatically renewed for one year.
Millard joined the company last July from Yahoo, where she'd been chief sales officer, and Marino was president and chief operating officer of Kate Spade until joining MSLO in 2005. The co-ceo arrangement is unusual, and it is expected to increase the authority of board chairman Charles Koppelman. "I really expected Wenda to become the ceo," said David Kastenbaum, director of equity research at Morgan Joseph. "It's a sign that they feel that Robin's really important to the company, and Wenda doesn't have the experience yet to run the merchandising business."
The company showed Marino just how important she was to them on May 6, when Securities and Exchange Commission filings show Lyne and the board's compensation committee granted her a spot bonus of $150,000, "with the proviso that you be required to repay the company $75,000 of that amount if you are no longer employed by the company in 12 months." Marino was the only executive cited in the filing as having received such a bonus in the first quarter and, well before she was named co-ceo, the bonus had fueled speculation that Marino had threatened to quit. The company spokeswoman didn't respond to a request for comment on the bonus.
Lyne, who was ousted as president of ABC Entertainment in 2004 only to see shows she'd developed thrive, leaves behind several initiatives that are meant to shore up lost revenue from K-Mart's diminishing royalty payments, including the purchase of Emeril Lagasse's media and merchandising business, a new Macy's collection, and a partnership with 1-800 Flowers. It is too early to tell whether the ventures will be successful, but in the meantime, MSLO's stock price has fallen precipitously during Lyne's tenure, though she also returned the company to profitability in that time. The shares closed Wednesday down 6 percent at $7.50.