Madam Speaker, I rise today to honor a southeastern Pennsylvania business leader whose talent and fiscal discipline should serve as a shining example for executives in these trying economic times. David Yost is Chief Executive Officer of…
Madam Speaker, I rise today to honor a southeastern Pennsylvania business leader whose talent and fiscal discipline should serve as a shining example for executives in these trying economic times.
David Yost is Chief Executive Officer of AmerisourceBergen, a drug distribution company located in Valley Forge, Pennsylvania. Recently, the magazine Business Week highlighted how Mr. Yost's no-frills management style has helped the company thrive.
At a time when the lavish perks of Wall Street executives grab all the headlines, the Business Week article noted that Mr. Yost answers his own phone at the office, flies economy class and limits his power lunches to a turkey hoagie with provolone cheese from a local deli. In addition, the article stated that Mr. Yost's salary is a fraction of his peers in the industry, while the company's profit margins exceed those of its competitors.
Although Mr. Yost is diligent about holding down expenses, he does not shy away from investing in the company. That is evident by the $100 million dedicated over the next three to five years to improve customer service technology and the $400 million used for enhancements to company distribution centers, the article stated.
Madam Speaker, I ask my colleagues to join me in saluting David Yost for his exemplary leadership and for putting the interests of his company, his customers and his employees first. We also offer Mr. Yost and AmerisourceBergen best wishes and continued success in the future.
[Business Week]
AmerisourceBergen's Scrimp-and-Save Dave
(By Aili McConnon)
R. David Yost is acutely aware of tougher times ahead for
his customers. Consumers are cutting back on prescription
drugs to save money and retailers are struggling with less
demand. But the AmerisourceBergen chief isn't worried. The
balance sheet of the drug distributor, which acts as a
middleman between drugmakers and retailers, is strong.
Besides, Yost has been tightening his belt for years.
Even in an industry known for its razor-thin margins, Yost
is remarkably cheap. He answers his own phone, flies economy
class, and rarely strays beyond a shortie turkey hoagie with
provolone from the local deli near his sterile industrial
park headquarters in Valley Forge, Pa. Yost, 61, admits that
his $66.1 billion company could absorb the cost of getting
him extra secretarial help and a more comfortable seat on
planes, but that's not the point. ``The leader is very
important in controlling business costs,'' says Yost, whose
headquarters lobby is decorated with plastic plants to save
on watering.
While Yost's zeal to cut costs may strike some as absurd,
his efforts have helped Amerisource thrive. And he thinks the
current credit crisis won't swing the company off course. Not
only has Amerisource held its own against rivals McKesson
(MCK) and Cardinal Health (CAH), but leaner operations have
helped it grow revenues 8% this year while the broader
industry is growing half as fast. In the last quarter,
Amerisource profits
increased by 30%, excluding one-time sales; McKesson's and
Cardinal's were up 8% and 13%, respectively. Yost's total
paycheck last year (including stock options) was $4.8
million, less than half that of Cardinal's CEO and barely a
sixth of McKesson's chief. ``He is not flamboyant or
flashy,'' says Banc of America Securities analyst Robert
Willoughby, of Yost's inclination to be modest. Adds John W.
Ransom of Raymond James & Associates: ``At 1% margins, you
have to be.''
Now he's under even more pressure to watch the bottom line
as his customers struggle to stay competitive. Amerisource
relies heavily on smaller, independent chains that are fast
being gobbled by big players, who may have contracts with the
distributor's rivals. But Yost predicts volume will pick up
over the long term. ``The older we get, the more drugs we
take,'' says Yost, settling comfortably into a 1970s-era
plaid chair (the weathered green leather chair at his desk,
which he inherited from the previous CEO when he took over in
1997, looks like a yard sale find).
George Barrett, the CEO of Cardinal's drug distribution
arm, says that what matters in a leader isn't frugality but
foresight. ``I don't want our people to see me as cheap but
instead very efficient and cognizant of the environment in
which we compete,'' says Barrett. But Yost insists he can be
all those things. While he pays competitive salaries to
attract talent, he allows employees to fly business class
only if they pay for an upgrade themselves. And they must
book 30 days in advance to get the best price. Yost is also
investing more than $100 million over the next three to five
years to improve customer service technology, and he paid
$400 million to spruce up company distribution centers and
consolidate operations.