End of the Sarnoff Era

When Robert Sarnoff succeeded his father as head of RCA Corp. in 1968, the family's continued dominance over the diversified electronics giant seemed all but assured. Last week, though, "Bobby" Sarnoff abruptly quit as chief executive because directors would not give him a raise. That left RCA without a Sarnoff at its head for the first time in its 45 years of existence. In a move that stunned New York's business community, RCA announced that Sarnoff, at the age of 57, also would step down as chairman, and even as a director on Dec. 31. RCA said that Sarnoff, who is married to Metropolitan Opera Singer Anna Moffo, "intends to pursue other interests of a personal nature."

TIME has learned that a few weeks ago Sarnoff, whose contract expires at year's end, indicated he wanted more money and intimated that he might resign if his demands were not met. In 1974 he was paid $326,000 in salary and earned deferred incentive awards totaling $157,000. After making his wishes known, he left New York on a business-and-pleasure trip, touring the Far East and stopping in Australia, where his wife was singing. He returned to New York a few days before last week's regular board meeting. While he was away a board committee, made up of several of the company's seven outside directors, that reviews employee contracts met a number of times to consider his demands. Last week the committee met briefly again, decided to turn Sarnoff down, and notified him as the meeting of the full 15-man board was beginning. Sarnoff promptly resigned.

RCA has had an erratic earnings record under Sarnoff, and some investors were obviously pleased by his departure. The day after his resignation was announced, the company's stock rose 75-c- a share, to $19.25, in heavy New York Stock Exchange trading. In 1971, the company wrote off a $490 million pretax loss when it abandoned the unprofitable computer business that Sarnoff had caused it to enter. At the time there was speculation that he might be forced out by dissident directors, including Industrialist Martin Seretean--who has since left the board, though he remains RCA's largest stockholder. Sarnoff has also been openly criticized for the publicity buildup that RCA gave Moffo after they married in 1974.

Anthony Conrad, RCA's 54-year-old president, takes over as chief executive immediately. Conrad has won high marks from the financial community for the way in which he has run the company's service and electronics divisions. RCA's profits nonetheless fell 38%, to $113.3 million, in 1974 and continued to decline during the first half of this year, largely because of lagging sales of television sets and other consumer products. In the third quarter, however, RCA profits rose 9% over those for the same three months of 1974, to $32.8 million.

Sarnoff, who still owns 79,338 shares of RCA common stock, has long lived in the shadow of the image of his innovative father, Brigadier General David Sarnoff, who pioneered radio broadcasting in the 1920s and color television in the 1950s. Robert Sarnoffs now-ended RCA career began in 1948 with the parent corporation's National Broadcasting Co. subsidiary. He became head of NBC in 1955 and was elevated to the presidency of RCA in 1966. Shortly after, he started RCA on an ambitious diversification effort. His main acquisitions: Hertz Corp., Random House Inc., Cushman & Wakefield Inc. (real estate) and Coronet Industries Inc. (a carpet and furniture manufacturer). A majority of RCA's board backed Sarnoff throughout his acquisition program, and even last week directors did not criticize his management--but they thought his pay was high enough.

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