At the point at which I fired Gary, the company was completing its fifth year of operation. We had grown by leaps and bounds and now had a team of about two hundred professionals. We were beginning to make serious money. And we were rewarding ourselves, as partners, with significant pay. I’m not talking Wall Street money here, but we were making about twice the salaries of our other senior staff. At least we were when times were good…and many times were good.
But this period included bad times as well. George and Ryan’s mischief hurt my business and I was working double time to keep my work afloat. I had to scurry to restore order and rebuild staff. Also, the Republican Tea Party was taking joy in shutting down the federal government. Those shut downs included us, the federal contractors. While the Feds eventually paid themselves for their time off, they never paid their contractors. The lack of a dependable cash flow lead us to lay off staff twice that year. Fortunately, they were only lay-offs we ever had to do.
Also, our overt success attracted the ire of our competitors. One of them called the Inspector General at the Environmental Protection Agency with an anonymous tip. They falsely reported that we were encouraging timesheet fraud. The police came swarming in. They flashed federal badges and ordered everybody into ‘lock down’. They made everyone to swear not to divulge the nature of the interrogations they were about to endure. Then they took each staff member, one by one, to drag confessions out of them.
There was no substance to the allegations, so there was nothing to divulge. But the heavy-handed tactics made some employees wonder if something bad was actually going on. My partner, Dave, who lived his principles, was particularly incensed by the way the Inspectors treated the staff. They finally broke camp, acknowledging that their onslaught had uncovered not a single shred of wrong-doing. Dave insisted that they apologize and tell the staff that they had received a bogus tip. Adding the final insult to injury, they refused his request. They said, “Just because we didn’t find anything doesn’t mean you didn’t do anything wrong.”
A long series of difficulties like these punctuated this period for me. So when Nancy said she was pulling the ‘time to move overseas’ card, I met it with a sense of relief. She let me know we were moving to the distant island of Madagascar.
Having recently been through the process of removing our partner Tom, I knew I needed to think long and hard about how I wanted to structure my own departure. I also realized how little I actually understood about our partnership agreement. I needed a better understanding of how stocks work in a privately held company. So I did what anyone would do in a similar situation: I lawyered-up.
What I learned was I didn’t have a leg to stand on if I left. I held one of four voting seats on the Board and I owned eighteen percent of the outstanding shares. Still, once I left, the remaining board members were free to revalue the company. They could, for example, decide to quadruple the number of common shares. Then they were free to award all the new shares to themselves. Doing that would dilute mine to a fraction of their value. And there were lots of other moves they could easily make to effectively deal me out. It appeared that I could add my departure to the growing list of problems I needed to confront. But this one loomed larger because it threatened the main thing I had set out to achieve: TFI. Total Financial Independence was slipping from my grasp. And so was my dream of being well off enough to get back to my writing.
In the end, I sucked it up and let everyone know I was keeping my commitment to Nancy. I told them I planned to leave the firm. I said I would resign my Board position but I planned to keep my stock. And I never let anyone know what I had learned about how vulnerable I was. I figured if they wanted to go that way they could figure it out on their own.
What I did do was to give them 33% of my stock back. I suggested that they use the shares I returned to attract a suitable replacement. I stipulated only that, if they accepted my offer, they be bound by the same terms. They each agreed to provide equal value back in the event that they ever chose to leave the firm. I ended by saying I hoped they would take me back in two years when I returned from Madagascar.
Then I went off to the State Department to complete my pre-departure physical. The exam was little shy of a physical assault. The doctor bombarded me with a stream of questions about my lifestyle. At one point he asked how much I drank. I replied honestly, “five beers a night.” He stopped the exam and said, “Did I hear you correctly? Five beers…a night?” Yes, I confrrmed, he had heard me right. “Then I seriously doubt you’ll be headed to Madagascar,” he said as he filled out an order for mandatory alcohol counseling. I was to report to the substance abuse counselor the following day.
My counseling lasted the better part of an hour. I said that I had always believed in being truthful to doctors so as not to impinge upon their ability to deliver care. I said that I had been drinking at the same level – without variation – every day for the past thirty years. I explained that I was a productive member of society and ran my own medium sized business. I said that with very limited exceptions, I had never missed a day of work. In the end, the counselor let reasonableness prevail. He signed off on my fitness for duty at a hardship post. We were headed to the Great Red Island.