At 11 one morning last week, the directors of CBS Inc. walked into the 35th-floor boardroom of the company's headquarters tower in mid-Manhattan for their monthly meeting. They could not fail to notice the one empty seat at the huge, 17-place mahogany table—the seat reserved for President Arthur R. Taylor—but no one said anything about it. They had all been warned of what was going to happen next. CBS Chairman William S. Paley, 75, wasted no time. He announced that Taylor, 41, a financial wizard whom Paley himself hand-picked in 1972 for the presidency, had resigned, effective immediately. What "the Chairman," as Paley is known at CBS, did not say was that just a few hours earlier he had summoned Taylor to his office—and fired him.
Paley had other announcements. Next April, he said, he himself would give up his post as CBS's chief executive officer, though he would remain as chairman. To fill Taylor's job, he named John D. Backe, 44, the president of CBS's publishing division. Then, as if to calm ruffled nerves, came a flood of impressive figures. CBS's third-quarter profits rose to a record $40.8 million on sales of $525 million. That was a big jump from the same period last year, when the company earned $29.1 million on revenues of $461 million, and clearly pointed the way to CBS's first $2 billion year. The directors quietly approved all the decisions and adjourned at 12:20.
Charming Autocrat. The shake-up at Black Rock, as the CBS glass-and-granite monolith on Sixth Avenue is known, caught the broadcast industry by surprise—including senior executives at CBS. "This comes as a complete bolt out of the blue," said a corporate spokesman, struggling to explain the changes. What everyone wanted to know was: Why? Why had Taylor been fired after leading CBS to ever greater financial success and presumably having been selected by Paley to succeed him? Why had Backe, who had no experience in broadcasting—the heart of CBS's operations—been chosen as the next president? Why was Paley giving up one of his jobs?
The last question was easiest to answer, and indeed holds the key to the others. Paley's resignation as C.E.O. means virtually nothing. Renowned as perhaps the greatest of broadcasting's pioneers—and as an autocrat of considerable taste and charm—he has run the company ever since 1928, when he bought control of the 16 radio stations that were to become the Columbia Broadcasting System. CBS now has some 213 television and 255 radio affiliates, plus divisions producing records, musical instruments, and books and magazines. Since he was the man who created this still burgeoning enterprise, Paley apparently has no intention of relinquishing control of it.
"Look," argued one longtime observer of the ways of Black Rock, "if Paley had wanted to bow out, he would have bowed out this week and not waited until next April." CBS insiders pointed to the fact that Paley even then will remain not only chairman of the company but its biggest stockholder, with about 1.5 million shares. Says an old Paley student, CBS Director Frank Stanton, 68: "I foresee no critical change."