What more could you ask of a novel than power, money and sex?
Well, add ERISA, a conflict of interests involving an ESOP and a trustee bank, Wall Street dealmaking, Washington politics, a revealing flirt at a hockey game caught on television, and an intimate scene in a hotel room during an employee ownership association convention, and you have a story that should grab the attention of professionals in the pension community.
Longtime shareholder activist Robert A. G. Monks knits such a tale in "Reel and Rout," published by Brook Street Press LLC, Saint Simons Island, Ga. For Mr. Monks, a noted author of a number of serious books on corporate governance, this is his first novel.
The 356-page drama involves an attempted takeover of American Observer Magazine, a prestigious publisher resembling Reader's Digest. Cecil "Drive" Rhodes, who controls a worldwide corporate media empire, makes a bid for AOM, which has fallen on hard times.
Mr. Monks creates not only interesting drama around shareholder and fiduciary issues but also fascinating characters.
They include Charles Hill Bowditch IV, a Vietnam hero, seasoned in combat, who faces one of his toughest battles in the trenches of ERISA law trying to uphold fiduciary responsibility as trustee of the AOM employee stock ownership plan. A maverick at his bank, his nickname of "Horse" becomes a prominent feature of the story. Through Horse, the ESOP, which owns 20% of AOM and whose participants are worried about protecting their jobs, seeks to thwart Mr. Rhodes and take over the company itself.
Horse is supported by a former lover, Molly Munro. She is a smart and sexy assistant secretary of labor in charge of the Pension and Welfare Benefits Administration. Before joining the agency, Ms. Munro had been a highly respected ERISA lawyer.
Among other characters is Vernon Stillman, chief executive officer of Universal Bank, whose assistance in financing Mr. Rhodes' takeover of AOM could place the bank in the first tier among financial institutions. A unit of Universal is New York Safe Deposit & Trust Co., the trustee of AOM. That sets the stage for an intriguing conflict, pitting Mr. Stillman's banking ambition against the effort by Horse, his employee, to fulfill a trustee's fiduciary responsibility and against Ms. Munro, who is also Mr. Stillman's former wife.
In the beginning, Mr. Rhodes successfully portrays himself as a champion of shareholder advocacy, a white knight, and generates discontent among the big charitable institutional investors in AOM with its board of directors over a falling stock price and dividends.
Mr. Rhodes shakes up AOM's comfortable, complacent board of directors, whose members have allowed shareholder value to decline, despite the booming stock market of the 1990s. Mr. Rhodes' seems to easily engineer financial support from Wall Street. But the real war Messrs. Rhodes and Stillman fight, as it turns out, is with AOM's ESOP and Horse and Ms. Munro. Mr. Rhodes is tripped up by his own lack of credible collateral, giving the AOM ESOP a chance to supersede the offer.
So on one side is the bank trustee, supposedly working in the interest of ESOP participants; on the other side, the bank trustee's parent, seeking to help close the takeover on behalf of a corporate magnate and at the expense of the ESOP.
Mr. Monks draws on his immense ERISA experience working for a predecessor of the PWBA and as a leader in institutional shareholder activism to compose a story that depicts conflicts of the employee benefit business.
