NCR to move executive offices to New York

NCR Corporation has been headquartered in its birth place, Dayton Ohio, since its founding in 1884.

When Bill Nuti was hired as NCR's CEO in August 2005, his contract had a clause that he could be fired for cause if he does not relocate by August 2006. See the 8-K filing with the SEC.

Relocation

Nuti will relocate to Dayton no later than August 1, 2006. NCR will reimburse all normal and customary relocation expenses in accordance with its standard relocation policy. Failure of Nuti and family to relocate to Dayton by August 1, 2006 constitutes material breach of Agreement and will be considered "cause" for termination by NCR. Alternatively, NCR may retain Nuti's services but the next applicable tranche of Restricted Stock that would have otherwise vested shall not vest and shall be forfeited. NCR will pay or reimburse all commuting expenses to and from Dayton on the NCR aircraft (not to exceed one round-trip per week) and will provide a $5,000 monthly allowance for living expenses in the Dayton area from the Start Date through the earlier

However, Nuti kept commuting weekly via corporate jet from his Long Island home in New York to Dayton Ohio. August 2006 came and went, and Nuti continued to commute form New York weekly.

Then, in November 2007, NCR hired a new CFO from California. The letter of agreement says that he will be based in New York, as per this 8-K filing.

Relocation - It is expected that you will move to the New York area within six months of your Start Date (the “Relocation Period”)

All this gave rise to rumors that NCR is relocating its headquarters to New York. Now news in the media has confirmed this: NCR is moving executive offices from Dayton to New York.

The Dayton Business Journal says:

NCR Corp. is moving its executive offices to the Big Apple after being wooed by New York officials with incentives.

For the past three years, New York State Assembly Speaker Sheldon Silver has pitched to Bill Nuti, New York resident and NCR's chief executive officer, the merits of moving the company's executive offices to Manhattan, which include $1.5 million in relocation assistance.

"Although NCR's headquarters were located in Dayton, it was clear to me that Bill was and is a New Yorker at heart," Silver said. "In the spring of this year, after little prodding -- just a little -- Bill informed me that NCR was ready to make the move. Now, this 'New Yorker at heart' will be a 'New Yorker at work' here in the 'Business and Financial Capital of the World."

New York officials held a press conference in October to announce the signing of NCR's lease in the new 7 World Trade Center building, where the company will have 200 employees.

Currently, the NCR's offices in Dayton house 2,000 employees.

However, this blog post says that the ones moving from Dayton will be only 100, all C-Level executives, with 6 to 7 figure salaries, and laments the loss in taxes for Dayton.

He even goes as far as proposing that Dayton sues New York for "poaching".

New York City is providing $1.5 million in relocation assistance, but the annual lease will cost NCR$2.8 million for 4,000 square feet.

While this move may raise the profile of NCR with potential financial industry customers in New York, there are drawbacks. The cost of living is higher in New York, and the lifestyle in more hectic. Would executives used to the Dayton lifestyle move to New York? Moreover, the would they disrupt their family and social life, and take an effective pay cut to do so?

Interesting to see how this develops ...

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Comments

To help pay for the new

To help pay for the new office space, NCR announced right before Christmas that is cutting the pay of over 500 of its Level 3 CE's. These cuts are anywhere between 10-24.9%. This seems to always be NCR's plan to cut costs, cut the pay, or layoff the very people they depend on to keep their customers happy

The beginning of the end of NCR

If all the big honchos move to NYC- who will be watching the roost? What kind of "hands-on" management will be going on.
Would Steve Jobs move to NYC?
The only thing about to happen to NCR is it will be sold off in pieces and parts until there is nothing left.
It's not rocket science to milk a corporation, its shareholders, employees and the community it resides in of every last dollar- and then bail.
In the proud tradition of Enron, Countrywide, Bear Stearns- we're seeing the robbing of a company by the very people who are supposed to be adding value.
The board of directors should be brought up on charges for not firing Nuti on Aug 2, 2006.

Thanks

Thanks for the background on Nuti and NCR; it is especially helpful that you cited your references, e.g., the specific 8-Ks. I am doing some research on NCR as an investment and this background is helpful and saved me some time. By the way, I don't recommend buying the shares - if someone gave me NCR shares, I would sell them immediately!

All the best.

CJH