David J. Mahoney papers
Held at: University of Pennsylvania: Kislak Center for Special Collections, Rare Books and Manuscripts [Contact Us]3420 Walnut Street, Philadelphia, PA 19104-6206
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A child of the Great Depression, David Joseph Mahoney, Jr., was born in 1923 of first generation Irish-American parents in the Throgs Neck section of the Bronx, New York. His father, David Mahoney, Sr., was a construction crane operator, but when the construction industry collapsed during the Great Depression, he was unable to find steady work for six years. David Mahoney's mother, Loretta Cahill, was a telephone operator for 22 years with New York Bell.
In interviews later in his life, David J. Mahoney recalled that growing up in such financially difficult times meant having a strong work ethic drummed into him from a very young age. As part of this time, he remembered joining his parents and younger brother Robert for "kitchen talks." These conversations were fueled by the family's financial crises and generally centered around "whether you were going to eat or not, whether you're going to be thrown out into the street, or whether the furniture goes out." Mahoney said that his "father was facing the unemployment line every day, his spirit all but destroyed. My mother kept telling me that somehow I could pull myself out of this mess."
Finding a way out became Mahoney's overriding concern, and eventually he did through his athletic ability. Mahoney won a $10-a-month scholarship to the first-rate Cathedral High School in the Bronx, from which he graduated in 1940. He then spent the next year attending LaSalle Military Academy, an all-boys college preparatory school in Oakdale, Long Island, from which he graduated from in 1941. In the fall of the same year, he began attending the Wharton School of Finance and Commerce at the University of Pennsylvania. At the University of Pennsylvania, Mahoney had won a basketball scholarship and played on the varsity team and was a member of the ROTC.
Mahoney's studies at Wharton were interrupted by World War II. Early in 1943 he entered the Army as a private and, three years later, emerged as a captain in the infantry. He was stationed in Okinawa, Japan after the end of WWII from 1945 to 1946. When Mahoney returned home, he found he would not be able to re-enter Wharton until September of 1946 and so decided to look for work.
Mahoney recalled in his book, Confessions of a Street Smart Manager, that when he was twenty-three, "just back from the army service in the Pacific during World War II, jobs were tough to come by… One afternoon, while sitting in a bar, brooding about my future and trying to figure out what to do, I came up with an idea to start a shuffleboard tournament." Mahoney thought it would be "smart business" for the bar if he could get a beer company to sponsor it. He took his idea to Ruthraff and Ryan Ad Agency. He was told by the agency that the sponsored tournament was illegal but were impressed enough to offer the young Mahoney a job in the mailroom for $25 a week.
For the next two years, Mahoney worked at Ruthraff and Ryan's Manhattan office during the day and commuted to attend evening classes at Wharton in Philadelphia. At $58 per month, his commuter ticket took a huge chunk out of his take home pay, but proved to be worthwhile. In 1949, Mahoney received his Bachelor's degree from the University of Pennsylvania. When later asked what drove him so hard, Mahoney said: "you set your ambitions, and then you run at them." In the meantime, Mahoney was made account executive at Ruthraff and Ryan, first for Virginia Dare wine, and then for Motorola. Two years after college, he was a senior account executive, and by age 25, he was the youngest vice president on Madison Avenue.
In 1951, when he was 28, Mahoney resigned his $25,000-per-year position at Ruthraff and Ryan. Selling his car and furniture, Mahoney went into business for himself, beginning David J. Mahoney, Inc., his own advertising agency. Eventually, he had a staff of twenty-five and was handling eight accounts, including Noxema and White Rock. Another account was Good Humor Corporation, about which he gained such remarkable knowledge that he was offered the job of president in 1956. Mahoney sold his own agency for $500,000 and became president of Good Humor, the ice cream on a stick company, at a salary of $75,000 per year.
At Good Humor, after donning a white coat and going where the action was to learn consumer preferences, he introduced a barrage of successful new specials. Five years later, with Good Humor sales and profits up, Mahoney accepted an offer to become Executive Vice President of a billion-dollar company, Colgate-Palmolive. He stayed at Colgate-Palmolive until 1961, having launched a series of bold marketing moves and expanding the company's operations considerably.
Career at Norton Simon, Inc.
In 1966 industrialist Norton-Simon, who wished to retire from the business world, was searching for a new chief executive to install at Canada Dry, the soft drink and liquor company in which Mr. Simon's Hunt Foods and Industries had a large stake. Simon was attracted to Mahoney because of his varied experience. Norton Simon later recalled that Mahoney "had been successful in business for himself, providing that he could stand alone. He had done an excellent job running a small company. And he had worked for a large company, mastering the complex institutional problems involved… He had a great deal of feeling about family, young people, the future of the country, and social problems."
Norton Simon's support helped Mahoney become president of Canada Dry Corporation in 1966. Nineteen months later, in 1967, Norton Simon Inc. came into being with the consolidation of Canada Dry, Hunt Foods and Industries, and the McCall Corporation. Mahoney was appointed president and chief operating officer as part of a three-man group running Norton Simon Inc. A little more than a year later, Mahoney emerged as its first president and chief executive officer, becoming chairman in 1970.
David Mahoney was responsible for many of the successes of Norton Simon Inc. (NSI) during his time there from 1966 to 1983. Mahoney stressed corporate growth through enhancing existing leadership brands, new product development, moving out of capital-intensive businesses, acquiring consumer oriented companies and building a strong financial structure. Under Mahoney's leadership, NSI companies eventually encompassed the following: Hunt-Wesson Inc., a producer of tomato-based food products and edible oils (Wesson Oil); Avis, Inc., a car rental and leasing company; Max Factor and Co., a cosmetics firm; Somerset Importers, Ltd., an importer of distilled spirits such as Johnnie Walker Scotch and Tanqueray Gin; The McCall Pattern Company, a home sewing pattern company; Glass Containers Inc.; United Can Co.; and Halston Enterprises, a cosmetics, fashion, and fragrance company.
Remarkable advances made under Mahoney's leadership at NSI include the corporation's expansion into international trade. In 1971 NSI had no international sales, but by the early eighties its products and services were sold in nearly every country in the world. Mahoney took frequent trips abroad, starting with a trip to China in 1972 to negotiate one of the first trade deals with the People's Republic of China for ginger for Canada Dry's Ginger Ale. Mahoney flew abroad frequently in his corporate jet, listing NSI on the London Stock Exchange, as well as exchanges in Frankfurt, Zurich, and Geneva. NSI held annual board of directors meetings in London and stimulated new areas of growth in Japan and Australia with Avis. By 1982 Mahoney was one of the nation's highest-paid executives, receiving $1.85 million in compensation, including $888,000 in salary and bonus, $611,000 in stock, and other compensation in the form of insurance. His compensation was periodically subjected to shareholder criticism and lawsuits charging "excessive compensation," as shareholders felt NSI's performance did not keep pace with Mr. Mahoney's raises. In 1977 he was compelled to accept a lower bonus.
Buyout of Norton Simon Inc.
Mahoney's fortunes changed late in 1983 when he put into motion a plan to take Norton Simon private. At a hastily called meeting of the Norton Simon board of directors, Mahoney and a group of NSI executives proposed to buy the $3 billion-a-year company back from its shareholders--for $1.65 billion in cash and debt securities--and to take it private. Mahoney's plan was to use $100 million in financing that he had lined up from the Wall Street house of Drexel Burnham Lambert and get the rest of the money he needed from Bankers Trust and Manufacturers Hanover Trust. With a personal investment of no more than $7 million, if he had succeeded, he would have controlled more than forty-five percent of the new company. On the other hand, if the directors rejected his plan and found a better offer, he could still turn a quick $26 million by selling his 1.5 million NSI shares and options to that buyer.
Mahoney's plan to take NSI private under his leadership did not succeed: a rival suitor, the Esmark Corporation, bettered his offer and walked away with his company in June of 1983. In his resignation statement, Mahoney said he was pleased that Esmark Inc. had increased its offer for Norton Simon and that he was resigning "to facilitate the transfer of control to Esmark." Esmark offered $37.50 a share for all of Norton Simon's 27.4 million shares. Its previous cash-and-stock offer had worked out to an average of $33.75 a share. In his resignation, Mahoney stated, "I congratulate Mr. Don Kelly (Esmark's chairman) and Esmark on their acquisition of Norton Simon Inc. and wish them every success. I am confident the combined NSI-Esmark team under Mr. Kelly will do an outstanding job of managing this company and our customers will benefit from their energy and expertise."
Officially ending his primary career as a businessman, Mahoney was left a lot richer. While the exact figure was not released, Mahoney made an estimated $40 million. For the first time in his life, however, he was out of a job and at loose ends. He described the period as a low point. "You stop being on the 'A' list," he said some years later. "Your calls don't get returned. It's not just less fawning; people couldn't care less about you in some cases. The king is dead. Long live the king."
After NSI: Mahoney's Commitment to Health Issues
It took some years for Mahoney to regain his focus. Gradually, he turned his attention to public health, in which he had already shown some interest. In the 1970s he had been chairman of the board of Phoenix House, the residential drug-treatment program. By 1977, while still at Norton, he became chairman of the Dana Foundation, a largely advisory position. Mahoney increasingly devoted his time to the foundation. Beginning in 1980, he served as founder and chairman of the American Health Foundation (AHF). In recognition of his important leadership role, the Board of Trustees of the AHF named its clinical arm of the Foundation the Mahoney Institute of Health Maintenance.
Mahoney's interest in issues of health came from his own experience. In an acceptance speech that he had prepared for the Lasker Award in 1992, he wrote of having seen firsthand the effects of stress and the mental health needs of people in the business world. Associates recall, and Mahoney seemed to say as much in his speech, that he appeared to have arrived at the brain much the way a marketing executive would think up a new product. "Some of the great minds in the world told me that this generation's greatest action would be in brain science--if only the public would invest the needed resources," he wrote.
Mr. Mahoney, who believed that the study of the brain and its diseases had been shortchanged for far too long, was sometimes described as the foremost lay advocate of neuroscience. Also in 1992, after taking over the fifty-year-old Dana Foundation as chief executive, Mr. Mahoney began shifting it away from its traditional mission of supporting broader health and educational programs and focused its grants almost exclusively on neuroscience. Since then, the foundation has given some $34 million to scientists working on brain research at more than forty-five institutions.
He prodded brain researchers to join forces, to shed their traditional caution and reclusivity, and engage the public imagination. To achieve his goals, he brought to bear the power of philanthropy, personal persuasion, and the connections he had made at the top of the corporate world. Using his skills as a marketing executive, he worked closely with some of the world's top neuroscientists to teach them how to sell government officials holding the purse strings, as well as the average voter, on the value of their research. He pressed them to make specific public commitments to find treatments for diseases like Alzheimer's, Parkinson's and depression, rather than conduct just "pure" research. In one of Mahoney's speeches, he said "people don't buy science solely. They buy the results of, and the hope of, science."
To accomplish his goals, Mahoney founded the Dana Alliance for Brain Initiatives. The Dana Alliance was a foundation organization of about 190 neuroscientists, including Dr. James D. Watson, who won the Nobel Prize as a co-discoverer of the structure of DNA, and six other Nobel laureates. The purpose of the Dana Alliance for Brain Initiatives was to work to educate the public about their field.
Mr. Mahoney also dipped into his own fortune, giving millions of dollars to endow programs in neuroscience at Harvard and the University of Pennsylvania. In his support of neuroscience, Mahoney was on the board of advisors of the David Mahoney Institute of Neurological Sciences at the University of Pennsylvania and chairman of the governing council of the Harvard Mahoney Neuroscience Institute at Harvard Medical School. The Albert and Mary Lasker Foundation, which traditionally honors the most accomplished researchers, was to give him a newly created award for philanthropy in late May of 2000, just after his death.
Mahoney married Barbara "Bobbie" Ann Moore on 5 May 1951, the same year he started David J. Mahoney Inc. They had two children, David J. Mahoney III, born on 15 April 1960, and Barbara Ann, born 12 August 1962. Bobbie had worked as a model and died in January 1975.
On 24 June 1978, David married Hildegarde "Hillie" Merrill, the former Mrs. Arthur C. Merrill. Hillie had been a model, and in 1956, won the Miss Rheingold pageant. She had two sons from her previous marriage, Robert "Bob" A. Merrill and Arthur Merrill, Jr. In total, the Mahoneys had six grandchildren: Christopher, Lily, Taylor, David IV, Casey, and Dillon.
Politically, Mahoney was a lifelong Republican. He, nonetheless, took a very even, at times bi-partisan approach to politics. He forged relationships with both Richard Nixon and Jimmy Carter and was known to reject "the Establishment." By "Establishment" Mahoney explained that he defined it as, "a group who all band together, they generally come from similar backgrounds and they all think the same way… pontificators, or people playing not to lose."
Outside of his leadership role at NSI, Mahoney wore a great many other hats. As a business leader, he spoke and wrote extensively on business issues, and he was the subject of major articles in influential publications, including Fortune, Forbes, Business Week, People, Advertising Age, and others. His articles and op-ed pieces written in the late 1970s focused on defending American business against criticism by the press. Mahoney stated that "American business is a responsible entity and it doesn't deserve to be the whipping boy it sometimes is." In a New York Times op-ed piece, Mahoney called for an end to the adversarial relationship between the press and business. In the 7 July 1977 piece, "On Ending an Adversary Relationship," Mahoney wrote:
We're not looking for "puff pieces," or phony build ups, or winkings at unethical practices, or gentle treatment of red ink. But we're not going to suffer silently while being blamed for the sins of the world by self-styled adversaries who substitute trendy distrust for objective standards of accountability.
Also in the late 1970s, Mahoney made a series of public addresses opposing excessive regulation of industry. In an address to the American Association of Advertising Agencies in 1978, he said:
Mahoney also made a number of appearances on Capitol Hill. Believing that there was a need for separate budgets for ongoing expenses and long-term capital investment, Mahoney testified before Congressional committees in 1983, submitting a plan to improve federal budgeting, planning and financial practices. In April 1983, Mahoney's testimony in support of a bill to create a capital budget was reprinted in the Congressional Record:
It is essential that we become more forceful and direct in communicating our points of view… the 4 A's can be an important tool for the free enterprise system by representing not only the advertising and marketing industry but the entire business point of view in Washington and in the state capitals throughout the country. But, don't go to Washington as supplicants or advocates; go as militants demanding equal rights for the free enterprise system.
Some time ago, I began to question the quality of the information available to our lawmakers in allocating American resources. For example, I just could not believe that the richest nation on earth had to choose between school lunches and MX missiles… or that we had to reduce our commitment to the elderly and disadvantaged of our society to buy an aircraft carrier. There is a preponderance of evidence that the current federal system needs reform.
Throughout his corporate career, David J. Mahoney championed a number of social justice issues. He was an early supporter of programs to encourage the hiring of women and minorities. At NSI in the early 1980s, Mahoney's ideas were reflected in hiring and promotion practices: women represented 44% of all workers and professional staff, and held 24% of managerial positions. Minorities represented 29% of all workers, 17% of professional staff, and held 12% of managerial positions. Mahoney also spearheaded programs aimed at helping disadvantaged inner-city youth gain marketable professional skills in order to become gainfully employed. In 1979 Mahoney proposed his "One Percent Plan":
At Norton Simon, Inc. Mahoney developed the Youth Employment Support (YES) Program, which backed up his 1979 Labor Department proposal. The YES Program provided 250 full-time jobs to disadvantaged youth. Mahoney stated:
I propose that America's 1000 largest corporations immediately implement a job creation program targeted to the disadvantaged… each of our companies add 1% to budgeted manpower costs to hire and train people for entry-level jobs. And, I propose that larger local and regional companies adopt a similar "1 Percent Plan" in the communities in which they operate. It would be a positive, active assertion of business' responsibility to the society that sustains us.
Mahoney also believed the importance of social responsibility of business. In a speech in the early eighties he stated:
Giving the youth of America a chance to hold a responsible job is an issue of close personal concern to me. In 1933, President Roosevelt said, 'Our greatest primary task is to put people to work.' As a kid growing up in the Bronx, I believed in those words then, and I feel just as strongly today. Our YES Program has been an unprecedented success. We have exceeded our goal by 40%... if the largest industrial corporations in the United States and the 50 largest banks and retailers were to hire only ten disadvantaged youth for every 1000 employees in their ranks, this would create 200,000 new jobs.
The agenda of business cannot be separated from the nation's agenda… Business cannot thrive, much less survive, in a social and economic atmosphere poisoned by urban decay and the abandonment of millions of people to bleak lives bereft of hope and opportunity.
Commitment to Education
Mahoney had a number of affiliations that reflected his deep commitment to equal opportunity in education. In 1980 he received the Flame of Truth Award from the Fund for Higher Education. He was a supporter of the United Negro College Fund and was a trustee of both the Tuskegee Institute and the University of Pennsylvania.
Beginning in 1976, Mahoney, a long-standing member of the Boys' Club of New York, chaired their annual All Sports Halls of Fame Dinners. In 1978 he was made an honorary Life Member of the Boys' Club of New York Alumni Association, and in 1980 the Club established the David Mahoney Scholarship Fund.
David J. Mahoney died on 2 May 2000 at his home in Palm Beach, Florida of heart disease. He was seventy-six years old.
The David J. Mahoney papers represent the personal papers of the New York based business executive and philanthropist, David J. Mahoney. The material follows his career from his attendance at the Wharton School of Finance and Commerce at the University of Pennsylvania, to his successful career as Chairman, President and CEO of Norton Simon, Inc., to his retirement from business and efforts to advance the field of neuroscience. The collection consists of 73 boxes, which includes nine photograph albums, and spans the years 1923 to 2000. It was donated in 2008 by Mahoney's widow, Hildegard "Hillie" Mahoney.
The bulk of materials within the collection are concentrated within the years of 1978 to 1995. Primary types of materials within the collection include the following:
1. Correspondence. These are contained within Series I and cover the years 1951 to 2000. Letters generated from the long standing relationships Mahoney cultivated with Richard Nixon, Norton Simon, William Safire and Vernon Jordan, are contained within.
2. Writings. Contained within the second series and comprising the years 1965 to 1999. Throughout his successive careers in business and philanthropy, David J. Mahoney wrote two books: Confessions of a Street Smart Manager with co-author Richard Conarroe in 1988, and The Longevity Strategy: How to Live to 100 Using the Brain-Body Connection with co-author Richard Restak, M.D. in 1998. Mahoney also wrote a number of newspaper articles, opinion pieces, and speeches. Draft copies, interview transcripts, and final copies of his published works are contained within the first series. These materials chart the development and expansion of Mahoney's ideas: from corporate accountability, educational opportunity and federal capital budgeting, to the need for increased funding for the advancement of neuroscience.
3. Events. Contained within Series III and covering the date range of 1968 to 1998. Over the decades, David J. Mahoney participated in a number of important events, from award dinners such as the Horatio Alger Award, which Mahoney won in 1977, to invitation lists and event planning for private parties thrown by the Mahoney's. Of particular note are the materials in subseries A generated by Mahoney's attendance to the Bilderburg Conference in both 1981 and 1982.
Also present within the collection are materials such as newspaper clippings and publicity materials which focus on Mahoney as a society figure and businessman. There is media such as VHS tapes and DVD's, as well as books, photographs, award plaques, and medals. A photographic catalog of Mahoney's life, spanning the years 1923 to 1999, is contained within Series VI.
Gift of Mrs. Hildegarde Mahoney, 2008
- University of Pennsylvania: Kislak Center for Special Collections, Rare Books and Manuscripts
- Finding Aid Author
- Meredith McCusker
- Finding Aid Date
- Funding provided by a grant from the Charles A. Dana Foundation
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