PhillyDeals: When ex-CEOs took the money and ran, they left Philadelphia poorer

A lot of people are outraged that passionate-but-impolitic Philadelphia public schools boss Arlene Ackerman is collecting nearly $1 million, from private donors and taxpayers, to go away.

Let's consider, for a moment, what the men who ran Philadelphia's biggest companies took home when they left in the decade before last:

David LeVan got $22 million in stock and cash when he sold regional freight monopoly Conrail, ending this city's 150-year run as a railroad hub.

Terrence Larsen received more than $50 million when he sold leading local bank CoreStates, ending the city's 200-plus years as a financial center.

Corbin McNeill collected $86 million in stock and severance when he sold dominant power supplier Philadelphia Electric Co. to Chicago's Exelon Corp.

Of course, Ackerman was a public servant, and we're squeamish about giving too many tax dollars to government bosses, especially one in a system as woeful as Philadelphia's schools.

By contrast, those ex-CEOs, whatever blunders may have pushed them to seek buyers for their heavily regulated companies, greatly enriched their fellow shareholders on the way out. Under our system of commerce, they were entitled to a cut.

But the Great Selloff left Philadelphia poorer. Center City office employment has barely recovered from those merger layoffs. Office rents are still flat. Condos and apartments keep replacing former places of business.

What's Ackerman's legacy? Backers say she helped troubled schools; critics are happy she's out of the way. Comparatively speaking, you could call her exit a bargain.

G. Morris Dorrance Jr. lived a long and useful life and deserved the attention he has received, including a featured Inquirer obituary, since his death Aug. 11 at age 88.

His legacy is mixed, like most lives of special note. Dorrance was the nephew of Campbell's Soup's founder, a leading backer of Fox Chase Cancer Center and other good causes, and, especially, the founding boss of CoreStates Financial Corp., biggest and last of the Philadelphia banks, which combined Philadelphia National Bank (PNB) and First Pennsylvania Bank into one hometown champion.

CoreStates was designed to dominate Mid-Atlantic finance and, as banks across the United States merged and disappeared, ensure that Philadelphia remained a center of banking decisions, headquarters jobs, and regional and charitable leadership.

But Dorrance's legacy also includes the loss of that bank, due as much as anything to his surprising choice of successor: not one of PNB's legendary tough, polished, hometown-partisan veteran lenders, but a youthful economist, outsider Terrence Larsen.

Larsen was unable or unwilling, as events proved, to chart a long-term course defying short-term Wall Street demands, which is what banks have to do to stay independent. Bright, ambitious people left CoreStates, and prospective merger partners that were supposed to make possible CoreStates' expansion to neighboring states such as Maryland turned away.

Larsen did a great job selling CoreStates in 1997 at the top of the market, for a record six times book value, to First Union Corp. (later Wachovia), which never recovered from the deal. (It's now part of Wells Fargo & Co.) Larsen got "one hell of a price," as he told me after it was over.

But in that deal, and the string of deals it capped, Philadelphia lost its banking sector, thousands of jobs, and its status as a headquarters city where bosses' big decisions matter to the community.

At the time, Dorrance declined to comment, or to second-guess. Maybe he agreed taking the money and running was the right thing to do.

But I'd like to think Dorrance hoped for more for the community he loved. PNC Bank has thrived in Pittsburgh by absorbing other banks, some of them deeply troubled, in Philadelphia and Washington, Baltimore, and Cleveland. Under boss Jim Rohr and his predecessor, Thomas O'Brien, PNC is what CoreStates should have been: one of the nation's largest banks, solvent in crises, steadily profitable, a major hometown employer, and patron of good causes.

PNC is building a new, 40-story skyscraper headquarters in Pittsburgh, as Philadelphia suffers a commercial- construction freeze. That should have been us.