Rod Stewart's hit song of yesteryear, "The First Cut Is the Deepest," may take on special significance for S1 Corp., which, according to the rumor mill, forfeited a cancellation fee of $500,000 when it dropped musician Rod Stewart as the entertainer for its retail delivery show party. Stewart reportedly was charging $750,000.
The irony is that S1 supposedly had to pay $250,000 for the alternate, BB King, putting it back in the same position.
Whatever actually happened (S1 public relations personnel ignored numerous inquiries), the story seems like proof that sometimes you just can't win. Last year, when S1 allegedly spent $1 million hosting its RDS party, it was accused of trying too hard. This year, detractors say S1 cancelled Rod Stewart in favor of the less expensive BB King because it's struggling financially.
"If you check out our bank account, you'll see we've $200 million in cash," said Chip Mahan, outgoing chief executive, now chairman of S1, in an interview. "We just weren't prepared to pay that kind of money," Mahan added.
Meanwhile, Corillian Corp.-the competitor heralding the fact that S1 lost clients Wachovia Corp. and Chase Manhattan Corp. to it-says it spent $40,000 hiring Jim Belushi and the Sacred Heart Band for a performance thought to have drawn 1,200 people.
Another way to spend $40,000 at the show was to buy a BMW convertible. That's what community bank consultant Fisi-Madison Financial did, reporting itself pleased to have drawn twice the traffic as in previous years with the scarlet sports car (which would sell retail for about $65,000.) "Other vendors have been coming up to me and saying, 'You're killing me,'" said Chuck Rose, vice president of Cendant Corp., which owns Fisi-Madison and has a consulting firm for larger banks among its diverse holdings.
Although a number of attendees (and not all vendors) complained at how quiet the exhibit hall was, a spokeswoman for the Bank Administration Institute said attendance was up from last year. Of 9,500 attendees at the recent show, 3,000 were bankers.
She didn't confirm the reported withdrawal of 30 exhibitors, but remarked that a certain number of cancellations is routine. Among them was Concentrex Inc., which, facing high debts, recently sold much of its relatively new e-banking business to Harland Corp. A competitor said Concentrex was still on the floor plan up to October-months after its partial sale to Harland was announced.
As for the cancellation of speakers, the rapid departures of bank executives from their positions between the time the RDS program was printed and the show itself prompted a toast at a dinner this reporter attended: "To none of us being on the program for RDS." (The joke implied that a speaking engagement at RDS is the kiss of death.) The obvious absentee this year was Kenneth Stevens, who was touted upon his arrival at Banc One Corp. as its next CEO. The retail guru, brought in from Taco Bell a few years ago, was chairman and CEO of Banc One's retail group. Industry sources say he left because he didn't fit with the bank's culture. Stevens took an advertising agency job in Ohio, where he had continued to live after joining the Chicago-based bank.
Analyst Tom Brown, who had been scheduled to interview Stevens, remarked that being left alone on the stage at RDS is becoming a pattern for him. Two years ago, Brown was to interview keynote speaker Jeff Coulter, then CEO of Bank of America Corp., but Coulter was gone before the show took place.
Last year, Richard Vague of Banc One/First USA was the notably absent party. He was replaced by another card industry expert, Jeremy Lent of Nextcard, who, some months before this year's show, moved to the less active role of chairman from CEO.
As for the change of CEO at S1, an analyst, who preferred not to be named, suggested that the loser in the reshuffle was its former chairman Michel Akkermans, not Chip Mahan, who as the new chairman will continue to wield great influence. Mahan, asked if Akkermans was a disappointment to the S1 board, as that analyst contended, said, "There was probably a disappointment on both sides." Akkermans now works for a venture capital firm. Mahan contended he'd been trying for years to vacate the CEO seat, adding: "We need a software guy. I'm not a software guy; I'm a banker."
Jaime Ellertson, Mahan's replacement, added, "Chip was an evangelist for Internet banking."