CEO Kenneth Melani and his Fellow Executive Bad Boys

     Married Highmark CEO Kenneth Melani recently lost his job after punching out his mistress' husband in a Pittsburgh suburb. The 58-year-old executive's squeeze, 28-year-old Melissa Myler, worked at the heath insurance corporation as a $40,000 a year sports marketing manager. Dr. Melani had hired her in October 2011. The affair, punch-out, Melani's arrest, and the CEO's prompt dismissal from the company, created a major scandal in western Pennsylvania. Dr. Melani was a bad boy.

     In the past, were business leaders and captains of industry bad boys who just didn't get caught? Were they nerds and geeks who couldn't get chicks until they became rich and powerful? Is this why these guys claw their way to the top? Is it to get women who otherwise wouldn't give them the time of day? Is this what it's all about? (Not long ago I read an article about some guy who thinks it would be a good idea for companies to provide their male employees with in-house prostitutes. According to this expert, it would boost morale, eliminate sexual harassment suits, and pump up production.)

     Are there women CEO who are bad girls? Martha Stewart was a bad girl CEO, but all she did was lie to federal officials about stocks she had sold. Big deal.

     Lately, besides Kenneth Melani, several bad boy CEOs have gotten into trouble over women. These stories are much more interesting than stock fraud, and other corporate white collar crimes. A few examples:

Mark Hurd

     In August 2010, Mark Hurd, CEO of Hewlett-Packard, resigned a few weeks before an internal corporate investigation into expenses he had incurred for meals and travel with a marketing contractor named Jodie Fisher. (No relation.) Fisher later quit, and hired the TV friendly, male unfriendly, Gloria Allred who filed a sexual harassment case against Mr. Hurd and the company. (The name Gloria Allred must strike fear in executive suites across the nation.) After resigning from Hewlett-Packard, the former CEO settled with Fisher for an undisclosed sum. But don't feel sorry for Mr. Hurd. His golden parachute departure from Hewlett-Packard cost the company $30 million.

Randy Michaels

     On October 6, 2010, The New York Times published an unflattering portrait of The Tribune Company's (Chicago Tribune, Los Angeles Times) CEO Randy Michaels and his management style. The article, by David Carr, portrayed the CEO as the ringleader of the type of bawdy, profane, sexual behavior one might find in an unruly college fraternity house. In January 2008, the former radio executive and disc jockey, while accompanied by several of his top executives, offered the waitress at the InterContinental Hotel in downtown Chicago $100 to show her breasts. According to reporter David Carr, "Mr. Michaels and his executives' use of sexual innuendo, poisonous workplace banter and profane invective shocked and offended people throughout the company." A woman who held a senior position at the Tribune Company told the journalist that Michaels and one of his top executives held a loud conversation on an open balcony above a work area about the sexual suitability of various employees.

     During a top-level Tribune Company management meeting, a bad girl executive offered to bring in her assistant to perform a sexual act on one of the executives who seemed to be in a bad mood. In December 2008, the board of directors received an anonymous letter detailing a hostile work environment and a pattern of hiring based on personal relationships.
Two months after The New York Times article, Randy Michaels resigned as CEO. Asserting that he had been forced to quit, Michaels demanded an exit payment of $900,000. (In the CEO world, you get bonuses for quitting under pressure or being fired.) The company agreed to pay Michaels $750,000. Compared to Hewlett-Packard, they got off cheap.

Brian Dunn

     Brian Dunn, the married 51-year-old CEO of Best Buy, the electronics retailer, had been with the company 28 years. Described as a "tech gadget junkie," Dunn became CEO in 2009. Recently, the CEO was accused of misusing company assets to finance a relationship he was having with a female subordinate who worked at the firm's headquarters in Richfield, Minnesota. On April 2, 2012, a week after the company began its probe of the allegations, Dunn resigned. The unnamed employee is still working for Best Buy at its leadership training institute located in Richfield. 

Former Highmark CEO Kenneth Melani a Victim!?

     After Dr. Kenneth Melani punched-out the husband of his mistress, the married insurance executive lost his $4.3 million a year job as CEO of Pittsburgh's Highmark corporation. The physical confrontation in Oakmont, Pennsylvania on March 25, the punch heard around the state, was obviously behavior unbecoming the head of a giant corporation. (I'm going to stick my neck out here and speculate that very few physicians ever get into fist fights with anyone. A few have murdered their wives, but that's another story.) The highly publicized altercation, and the tawdry (but juicy) circumstances that led up to it, at the very least has caused the non-profit, Blue Cross company tremendous embarrassment. By any objective standard, Dr. Melani's prompt dismissal (executives are dismissed, professors are retrenched, and ordinary folks are fired) was the only appropriate corporate response.

     Melani's 28-year-old squeeze, Melissa Myler, began working for Highmark in October 2011 as a $40,000 a year sports marketing manager. A few weeks before her husband and her lover punched it out in Oakmont, the company's board of directors told the CEO that they would appreciate it if his mistress found work elsewhere. Dr. Melani denied having an affair with Myler. As a result, she did not resign. (As of this writing, she is still with the company, and planning a PGA golf event to be held at the Fox Chapel Country Club. I don't know about you, but I can see this woman on Donald Trump's "Celebrity Apprentice.")

     On April 3, Allegheny County District Attorney Stephen Zappala, Jr. announced that if Dr. Melani completes some kind of counseling program (Anger management? Utilizing common sense? How to live in the real world?) the criminal charges against him will be dropped. (Really, does a former CEO need some counselor to tell him that having an affair with a married employee, then punching-out her husband, is unCEO-like behavior?) According to the prosecutor, Dr. Melani's preliminary hearing has been postponed.

Here Come the Lawyers

     High profile scandals involving big companies with deep pockets attract lawyers like a corpse draws flies. Dr. Melani has two attorneys: one to handle his Highmark termination, and the other to deal with his problems with the law. Sam Cordes, Melani's employment issues attorney, who also represents Melissa Myler, is no stranger to high profile firing cases. According to Cordes, "What Highmark did to these two people is wrong...."

     Regarding the board of directors' attempt to nudge the mistress out the door prior to the middle-aged slugfest in Oakmont, attorney Cordes is exploring the possibility of a sex discrimination, retaliation, or breach of contract suit. The lawyer has pointed out that getting rid of the woman was the corporation's first instinct. "The problem is that how she has been treated says a lot about the treatment of women," he said. (I would argue it says a lot about how much easier it is to dump a $40,000 a year nonessential employee than it is firing the CEO. Moreover, while sex is clearly an element in this case, I don't see the discrimination part. Remember, they ended up firing him.)

     According to an "executive coach" (they need coaching?) from Ann Arbor, Michigan, Dr. Melani was suffering from what they call "CEO's disease." Oh boy. And how do corporation leaders catch this illness? Well, according to the coach, they get it from being isolated from real life, and from hanging out too much with their suck-up yes-men. While I'm not an executive coach, I beg to differ. I think these guys are just sociopathic. (Here's an idea, maybe Highmark should cut out the middleman and replace Melani with an executive coach!)  

     Dr. Melani's criminal attorney, Robert Del Greco, Jr., has told reporters that his client is "upset and disappointed." But the lawyer didn't say who Melani is upset and disappointed with. The company? His mistress? His wife? The police? Whoever it is, I'm sure it's not with himself. That would be very unCEO-like.

Highmark CEO Kenneth Melani: Punch-Out in Pittsburgh

     Kenneth R. Melani has lived most of his life in southwestern Pennsylvania. He was born in New Kensington, attended Springdale High School, and graduated from Washington and Jefferson College with a degree in chemistry. After earning his degree in medicine from Wake Forest University, Dr. Melani returned to Pittsburgh in 1979 to complete a three-year residency at West Penn Hospital. Ten years later, Dr. Melani became the chief medical officer at Highmark, the health insurance company headquartered in downtown Pittsburgh. When he took over as CEO in 2003, the 14 billion a year corporation, with millions of policy holders, had become Pennsylvania's largest heath insurer.

     In 2009, Dr. Melani, his wife Tracy, and their three children were living in Fox Chapel, a suburban community along the Allegheny River just northeast of downtown Pittsburgh. That year, the 54-year-old CEO met a 24-year-old knock-out named Melissa Myler, a graduate of Knock High School, and Slippery Rock University. She worked as the operations manager of the Mylan Classic Golf Championship at Southpointe Golf Club, and had a job with the Washington County Economic Development Company. Recently married, Melissa and her husband Mark golfed with Dr. Melani, and attended sporting events with the CEO. In October 2011, the Highmark executive hired Melissa as the sports marketing manager. (I'm not sure what this has to do with health insurance.) Three weeks after bringing her onboard, the CEO and his new employee began having an affair. This would turn out to be a bad executive decision.

     Tracy, Dr. Melani's wife of 19 years, learned of the affair in January 2012. She kicked her husband out of the apartment, and notified Melissa's husband Mark Myler. After being found out, the CEO and his mistress moved into a luxury apartment in O'Hara Township near Fox Chapel. But the lover's honeymoon had come to an end. Not only was Dr. Melani's marriage in ruins, he was starting to worry that his young squeeze was cheating on him. Apparently unaware of the irony in this, and perhaps the justice, Dr. Melani hired a private investigator to check on Melissa's fidelity. Perhaps his mistress was having a clandestine affair with her husband. Outrageous. At this point, virtually everyone who worked at Highmark knew that their CEO was living with a woman, an employee, who was not his wife.

     On Sunday, March 25, 2012, Melessa returned to Mark's apartment in Oakmont, a suburban community just east of Fox Chapel. She went there to speak to her 49-year-old husband. Dr. Melani (or his PI) must have been following her because he showed up at the Myler apartment, and accused his mistress of cheating on him. She asked him to leave, but instead of walking away, Dr. Melani confronted Mark Myler. (Usually it's the wronged husband who confronts the man having an affair with his wife. But if the lover is a CEO of a giant corporation, the norlmal rules of engagement don't apply.)

     The cheated-on husband and his wife's lover started yelling at each other. Next came the pushing, then the punching. (Too bad someone didn't video this fight.) Someone called 911. (While a knock-out was unlikely, one or both of these guys could have gone down with a heart attack.)

     When the police rolled up to the scene, the fight had ended. Both men had swollen faces and a lot of bruises. There was a little bleeding as well. Dr. Melani, however, was still furious. He told the officers that his private investigator had dug up a lot of dirt on his mistress, and the whole mess was about his money. He pulled a Rush Limbaugh and called Melissa a "slut." Sometime during all of this, Dr. Melani phoned his lawyer and was overheard telling him that if the police hadn't arrived, he would have killed Melissa and her husband. (This was reported in the Pittsburgh Post-Gazette.) Wow, this guy must have been great to work for.

     Melissa, on the other hand, told the officers that she was not planning a reconciliation with her husband, Mark. Moreover, she did not intend to break up with Dr. Melani.

     On Wednesday, March 28, the Allegheny County District Attorney's office charged CEO Kenneth R. Melani with criminal trespass and simple assault, both misdemeanor offenses. Mark Myler, the presumed victim, was not charged.

     Shortly after the criminal charges and the embarrassing publicity, the Highmark board of directors relieved the CEO of his duties, and placed him on unpaid leave. On Sunday, April 1, one week after the fist-fight in Oakland, the board of directors fired Kenneth Melani, their $4 million-dollar-a-year CEO. Normally when CEOs are axed, resignations are negotiated that involve golden parachutes. But in Dr. Melani's case, there will apparently be no soft landing. For Highmark, this is risky. By throwing Dr. Melani out of the plane without a parachute, there will probably be a costly, and embarrassing lawsuit. (That's what I'm hoping for.) Any guy who would put in jeopardy a $4 million-a-year-job by punching out the husband of his lover, will not slink quietly into the night. This soap opera has just begun.

(The material in this log is based upon reportage in the Pittsburgh Post-Gazette and The Pittsburgh Tribune-Review)


UPDATE

     On June 6, 2012, the prosecutor dropped the assault charges against Melani in return for his promised to take 16, one-hour anger management classes.