The global chief executive of Ernst & Young, whose efforts to hide his wealth during divorce proceedings backfired with the disclosure of the privately held firm's financial details, retired yesterday after a little more than a year in the job.
Richard S. Bobrow, 50, made no public comment on his retirement, which the company cited in passing in the middle of the annual statement to outsiders that gives the barest hint of its financial performance.
Unlike corporations whose stock is publicly traded, Ernst & Young is not required to disclose its profits, cash flow, debts, executive compensation and other financial details. Only partners are entitled by law to such details, and there is some dispute within the firm as to just how much partners must be told.
Charles Perkins, a spokesman, said there would be no comment on the reasons for Mr. Bobrow's retirement. But there seemed little doubt that Mr. Bobrow's mishandling of his divorce cut his career short.
“Bobrow couldn't have been the most popular guy at the firm after he caused the disclosure of the partnership's finances,” said Julie Lindy, editor of Bowman's Accounting Report, an industry newsletter published in Atlanta.
Mr. Bobrow made $3.125 million in 2001 and $2.75 million in 2000, court records show. His wife, Jan, testified at their divorce trial that during their 24 years of marriage she never knew how much her husband made. He gave her $5,000 a month to run the household and raise their four children in a large home in suburban Indianapolis, court records show.
He offered a $1 million settlement, which Mrs. Bobrow said last year that she was inclined to accept until a neighbor suggested that she first go through the financial records that Mr. Bobrow had left in his home office.
She said that for the first time she inspected income tax returns that, she later testified, her husband made her sign without being allowed to read them. She then sought to learn more about her husband's wealth, leading to a protracted fight in Hamilton County Superior Court. Mr. Bobrow fought disclosure of his wealth and details of how much he made when Ernst & Young sold its consulting arm to Cap Gemini of France for $11.3 billion. He also asserted that his partnership in the firm had no measurable value, court records show.
Judge Steven R. Nation ruled in January 2002 that the couple's net worth was $23.5 million and awarded 60 percent to Mrs. Bobrow. He valued the couple's interest in the consulting arm at the end of their marriage at $10.1 million but noted that when it was sold to Cap Gemini, after the couple separated, Mr. Bobrow's share had jumped in value to $24.9 million.
The judge said that Mr. Bobrow could expect to earn $36 million to $54 million more, plus a pension worth more than $1 million a year, if he worked until retiring at age 60. How much of that future income Mr. Bobrow received in settlement when he retired yesterday is information only the firm's partners are entitled to know.
At trial, Mr. Bobrow and his lawyers did not ask to seal any of the records. The New York Times then requested the records, but Judge Nation withheld them until Ernst & Young and Cap Gemini could argue for keeping them confidential. Judge Nation ruled in January that Indiana law made the records public and gave them to The Times. The next day, The Indianapolis Star sought copies of the documents, but the judge again withheld them and allowed the two firms another opportunity to object. He then ruled, again, that the records were public.
Tim Wheatley, an editor at The Star, said yesterday that his newspaper had not yet obtained the documents because the judge's decision was being appealed.
The documents show that Ernst & Young partners had cash earnings averaging $565,000 for each partner in the 12 months ended June 30, 2002, up 9.7 percent from $515,000 the previous year, and that 31 percent of revenue was profit.
Yesterday, in its annual voluntary public disclosure, Ernst & Young reported that global revenue totaled $13.1 billion for the year ended June 30, up 30 percent from the previous year, led by a 35 percent increase in its consulting business, which it calls the Assurance and Advisory Business Services.
The firm attributed the revenue growth to business it gained with the demise of the Arthur Andersen accounting firm and to “strong organic growth in major markets throughout the world.” There are 102,968 people on the Ernst & Young global payroll, including partners, but the firm released few other details.
James S. Turley, the firm's chairman, will assume Mr. Bobrow's duties, the firm said.
