Pearson
Age: 50
Year named CFO: 2006
Number of employees: 33,584
2008 earnings: £292 million ($423 million)
Compensation: £957,000 ($1.4 million)
The European and U.S. economies are deep in recession, and the media business is reeling, but you wouldn’t know it from looking at publishing powerhouse Pearson. The company, a major educational publisher and owner of the Financial Times newspaper and Penguin books, reported a 15.6 percent increase in sales last year, to £4.8 billion, and a 2.8 percent rise in earnings.
No small amount of credit for the company’s robust health goes to its CFO, Robin Freestone. When many companies were loading up on cheap debt a few years ago, Pearson was conspicuously restrained.
“There was a lot of investor pressure to leverage up all the way into the middle of 2007,” Freestone says. “We resisted that temptation and didn’t overborrow, and when we go to debt markets now, our ratings are worth something.”
The company did increase its net debt to £1.46 billion at the end of last year from £973 million in 2007 as a result of purchases, including that of educational testing company Harcourt Assessment for $635 million, and the pound’s weakness, which inflated the value of the company’s dollar-denominated debt. Still, Pearson’s ratio of debt to earnings before interest, tax, depreciation and amortization fell to 1.7 in 2008 from 3.9 in 2000.
Looking ahead, Pearson is embracing the digital transformation of media. A few years ago the company began developing digital education products, such as its MyLab series of online instruction products, which now boast 4.1 million users in the U.S. Pearson is also bullish about the prospects for electronic reading devices, such as Amazon.com’s Kindle.
“We are making sure that all our major works and all new books are available on Kindle and other e-readers,” he says. “Keeping products available digitally is a must; it’s not an option.”
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