Willard Mitt Romney (born March 12, 1947) is an American businessman and politician. He was the 70th Governor of Massachusetts from 2003 to 2007 and he is the presumptive nominee of the Republican Party for the 2012 presidential election.
The son of George W. Romney (former Governor of Michigan) and Lenore Romney, he was raised in Bloomfield Hills, Michigan, and during his college years served as a missionary for The Church of Jesus Christ of Latter-day Saints in France. He married Ann Davies in 1969 and they have five children: Ben, Craig, Josh, Matt and Tagg.
He entered the management consulting business, which led to a position at Bain & Company. Eventually serving as CEO, he brought the company out of crisis. He was co-founder and head of the spin-off company Bain Capital, a private equity investment firm that became highly profitable and one of the largest such firms in the nation. His wealth helped fund most of his future political campaigns.
He ran as the Republican candidate in the 1994 U.S. Senate election in Massachusetts, losing to long-time incumbent Ted Kennedy. Romney headed the Salt Lake Organizing Committee, which organized the 2002 Winter Olympics, and he helped turn the troubled games into a financial success.
He was elected Governor of Massachusetts in 2002 but did not seek re-election in 2006. He presided over a series of spending cuts and increases in fees that eliminated an up to $1.5 billion deficit.
He also signed into law the Massachusetts health care reform legislation, which provided near-universal health insurance access via subsidies and state-level mandates and was the first of its kind in the nation.
During the course of his political career, his positions or rhetorical emphasis have shifted more towards American conservatism in several areas.
Romney ran for the Republican nomination in the 2008 U.S. presidential election, winning several primaries and caucuses but losing the nomination to John McCain. In the following years, he gave speeches and raised campaign funds on behalf of fellow Republicans. In June 2011, he announced that he would seek the 2012 Republican presidential nomination. The results of the caucuses and primaries have placed him as the clear leader and in April 2012 the Republican National Committee declared him the presumptive nominee.
Heritage and youth
Romney was born in Detroit, Michigan. He was the youngest child of George W. Romney, a self-made man who by 1948 had become an automobile executive, and Lenore Romney (née LaFount), an aspiring actress who had become a homemaker.
His mother was a native of Logan, Utah, and his father had been born in a Mormon colony in Chihuahua, Mexico, to American parents.Romney is of primarily English descent, and also has more distant Scottish and German ancestry. Romney is a fifth-generation member of The Church of Jesus Christ of Latter-day Saints.
A great-great-grandfather, Miles Romney, converted to the faith in its first decade, and another great-great-grandfather,
The three siblings before him were Margo Lynn, Jane LaFount, and G. Scott, followed by Mitt after a gap of six years. Romney was named after hotel magnate J. Willard Marriott, his father’s best friend, and his father’s cousin Milton “Mitt” Romney, 1925–1929 quarterback for the Chicago Bears.
When he was five, the family moved from Detroit to the affluent suburb of Bloomfield Hills. His father became CEO of American Motors and turned the company around from the brink of bankruptcy; by the time he was twelve, his father had become a nationally known figure in print and on television.
Romney idolized his father, read automotive trade magazines, kept abreast of automotive developments, and aspired to be an executive in the industry. His father also presided over the Detroit Stake of the LDS Church.
Romney went to public elementary schools and from seventh grade on, attended Cranbrook School in Bloomfield Hills, a private boys preparatory school of the classic mold where he was the lone Mormon and where many students came from even more privileged backgrounds. He was not particularly athletic and at first did not excel academically.
While a sophomore, he participated in the 1962 campaign in which his father was elected Governor of Michigan. George Romney was re-elected twice; Mitt worked for him as an intern in the governor’s office, and was present at the 1964 Republican National Convention when his moderate father battled conservative party nominee Barry Goldwater over issues of civil rights and ideological extremism. Romney had a steady set of chores and worked summer jobs, including being a security guard at a Chrysler plant.
Initially a manager for the ice hockey team and a member of the pep squad and various school clubs, during his final year at Cranbook, Romney joined the cross country running team and improved academically, but was still not a star pupil. His social skills were good, however, and he won an award for those “whose contributions to school life are often not fully recognized through already existing channels”. Romney was an energetic child who enjoyed pranks.
In March of his senior year, he began dating Ann Davies, two years behind him, whom he had once known in elementary school; she attended the private Kingswood School, the sister school to Cranbrook. The two informally agreed to marriage around the time of his June 1965 graduation.
University, France mission, marriage and children: 1965–1975
Romney attended Stanford University for a year, where he worked as a night security guard to fund secret trips home to see Ann. Although the campus was becoming radicalized with the beginnings of 1960s social and political movements, Romney kept a well-groomed appearance and enjoyed traditional campus events. In May 1966, he was part of a counter-protest against a group staging a sit-in in the university administration building in opposition to draft status tests.
In July 1966, Romney left for 30 months in France as a Mormon missionary. Missionary work was a traditional rite of passage that his father and many other relatives had volunteered for. He arrived in Le Havre with ideas about how to change and promote the French Mission, while facing physical and economic deprivation in their cramped quarters.
Rules against drinking, smoking, and dating were strictly enforced. Like most individual Mormon missionaries, he did not gain many converts; the nominally Catholic but secular, wine-loving French people proved especially resistant to a religion that prohibits alcohol. He became demoralized, and later recalled it as the only time when “most of what I was trying to do was rejected.”
In Nantes, Romney suffered a bruised jaw while defending two female missionaries who were being bothered by a group of local rugby players. He continued to work hard; having grown up in Michigan rather than the more insular Utah world, Romney was better able to interact with the French.
He was promoted to zone leader in Bordeaux in early 1968, then in the spring of that year became assistant to the mission president in Paris, the highest position for a missionary. In the Mission Home in Paris he enjoyed palace-like accommodations. Romney’s support for the U.S. role in the Vietnam War was only reinforced when the French greeted him with hostility over the matter and he debated them in return. He witnessed the May 1968 general strike and student uprisings and was upset by the breakdown in social order.
In June 1968, an automobile Romney was driving in southern France was hit by another vehicle, seriously injuring him and killing one of his passengers, the wife of the mission president. Romney, who was not at fault in the accident, became co-acting president of a mission demoralized and disorganized by the May civil disturbances and by the car accident.
Romney rallied and motivated the others and they met an ambitious goal of 200 baptisms for the year, the most for the mission in a decade. By the end of his stint in December 1968, Romney was overseeing the work of 175 fellow members. Romney developed a lifelong affection for France and its people, and speaks French.
The experience in the country instilled in him a belief that life is fragile and that he needed seriousness of purpose. It also represented a crucible, after having been only a half-hearted Mormon growing up: “On a mission, your faith in Jesus Christ either evaporates or it becomes much deeper. For me it became much deeper.”
While he was away, Ann Davies had converted to the LDS Church, guided by George Romney, and had begun attending Brigham Young University (BYU). Romney was nervous that she had been wooed by others while he was away, and she had indeed started dating popular campus figure Kim S. Cameron and had sent Romney in France a “Dear John letter“, greatly upsetting him; he wrote to her to in an attempt to win her back.
At their first meeting following Romney’s return they reconnected, and decided to get married immediately but agreed to wait three months to appease their parents. At Ann’s request, Romney began attending Brigham Young too, in February 1969. The couple were married on March 21, 1969, in a civil ceremony at Ann’s family’s home in Bloomfield Hills that was presided over by a church elder. The following day, the couple flew to Utah for a wedding ceremony at the Salt Lake Temple.
Romney had missed much of the tumultuous American anti-Vietnam War movement while away, and was surprised to learn that his father had turned against the war during his unsuccessful 1968 presidential campaign. Regarding the military draft, Romney had initially received a student deferment, then, like most Mormon missionaries, a ministerial deferment while in France, and then a student deferment. When those ran out, his high number in the December 1969 draft lottery (300) ensured he would not be selected.
At culturally conservative BYU, Romney continued to be separated from much of the upheaval of the era, and did not join in those protests that did occur against the war or the LDS Church’s policy at the time of denying full membership to blacks. He became president of, and an innovative fundraiser for, the all-male Cougar Club booster organization and showed a new-found discipline in his studies. In his senior year, he took leave to work as driver and advance man for his mother Lenore Romney’s eventually unsuccessful 1970 campaign for U.S. Senator from Michigan.
College of Humanities and to the whole university.
The Romneys’ first son, Tagg, was born in 1970 while the Romneys were undergraduates at Brigham Young and living in a basement apartment. Ann subsequently gave birth to Matt (1971), Josh (1975), Ben (1978), and Craig (1981). Ann Romney’s work as a homemaker would enable her husband to pursue his career.
Romney still wanted to pursue a business path, but his father, by now serving in President Richard Nixon’s cabinet as U.S. Secretary of Housing and Urban Development, advised that a law degree would be valuable.
Thus Romney became one of only fifteen students to enroll at the recently created joint Juris Doctor/Master of Business Administration four-year program coordinated between Harvard Law School and Harvard Business School. Fellow students considered Romney guilelessly optimistic, noting his solid work ethic and buttoned-down demeanor and appearance.
He readily adapted to the business school’s pragmatic, data-driven case study method of teaching, participated in class well, and led a study group whom he pushed to get all A’s. He had a different social experience from most of his classmates, since he lived in a Belmont, Massachusetts, house with Ann and two children.
He was non-ideological and did not involve himself in the political or social issues of the day. He graduated in 1975 cum laude from the law school, in the top third of that class, and was named a Baker Scholar for graduating in the top five percent of his business school class.
Romney was recruited by several firms and chose to remain in Massachusetts to work for Boston Consulting Group (BCG), thinking that working as a management consultant to a variety of companies would prepare him for a future job as a chief executive. He was part of a 1970s wave of top graduates who chose to go into consulting rather than join a major company directly. His legal and business education proved useful in his job, and he became a rising star while applying BCG principles such as the growth-share matrix.
In 1977, he was hired away by Bain & Company, a management consulting firm in Boston that had been formed a few years earlier by Bill Bain and other former BCG employees. Bain would later say of the thirty-year-old Romney, “He had the appearance of confidence of a guy who was maybe ten years older.”
With Bain & Company, Romney learned the “Bain way”, which consisted of immersing the firm in each client’s business, and not just issuing recommendations but staying with the company until changes were put into place. Romney became a vice president of the firm in 1978 and worked with clients such as the Monsanto Company, Outboard Marine Corporation, Burlington Industries, and Corning Incorporated. Within a few years, he was one of Bain & Company’s best consultants and was sought after by clients over more senior partners.
Romney was restless for a company of his own to run, and in 1983, Bill Bain offered him the chance to head a new venture that would buy into companies, have them benefit from Bain techniques, and then reap higher rewards than consulting fees.
Romney initially refrained from accepting the offer, and Bain re-arranged the terms in a complicated partnership structure so that there was no financial or professional risk to Romney. Thus, in 1984, Romney left Bain & Company to co-found the spin-off private equity investment firm, Bain Capital.
In the face of skepticism from potential investors, Bain and Romney spent a year raising the $37 million in funds needed to start the new operation, which had fewer than ten employees. As general partner of the new firm, Romney spent little money on costs such as office appearance, and saw weak spots in so many potential deals that by 1986, few had been done.
At first, Bain Capital focused on venture capital opportunities. Their first big success was a 1986 investment to help start Staples Inc., after founder Thomas G. Stemberg convinced Romney of the market size for office supplies and Romney convinced others; Bain Capital eventually reaped a nearly sevenfold return on its investment, and Romney sat on the Staples board of directors for over a decade.
Romney soon switched Bain Capital’s focus from startups to the relatively new business of leveraged buyouts: buying existing firms with money mostly borrowed against their assets, partnering with existing management to apply the “Bain way” to their operations (rather than the hostile takeovers practiced in other leverage buyout scenarios), and selling them off in a few years.
Existing CEOs were offered large equity stakes in the process, owing to Bain Capital’s belief in the emerging agency theory that CEOs should be bound to maximizing shareholder value rather than other goals. Bain Capital lost most of its money in many of its early leveraged buyouts, but then started finding deals that made large returns. The firm invested in or acquired Accuride, Brookstone, Domino’s Pizza, Sealy Corporation, Sports Authority, and Artisan Entertainment, as well as lesser-known companies in the industrial and medical sectors.
During the 14 years Romney headed the company, Bain Capital’s average annual internal rate of return on realized investments was 113 percent. Much of this profit was earned from a relatively small number of deals; Bain Capital’s overall success–to–failure ratio was about even.
Less an entrepreneur than an executive running an investment operation, Romney was skilled at presenting and selling the deals the company made. The firm initially gave a cut of its profits to Bain & Company, but Romney persuaded Bain to give that up.
Within Bain Capital, Romney spread profits from deals widely within the firm to keep people motivated, often keeping less than ten percent for himself. Viewed as a fair manager, he received considerable loyalty from the firm’s members. Romney’s wary instincts were still in force at times, and he was generally data-driven and averse to risk. He wanted to drop a Bain Capital hedge fund that initially lost money, but other partners prevailed and it eventually gained billions.
He also personally opted out of the Artisan Entertainment deal, not wanting to profit from a studio that produced R-rated films. Romney was on the board of directors of Damon Corporation, a medical testing company later found guilty of defrauding the government; Bain Capital tripled its investment before selling off the company, and the fraud was discovered by the new owners (Romney was never implicated). In some cases, Romney had little involvement with a company once acquired.
Bain Capital’s leveraged buyouts sometimes led to layoffs, either soon after acquisition or later after the firm had left. How jobs added compared to those lost due to these investments and buyouts is unknown, due to a lack of records and Bain Capital’s penchant for privacy on behalf of itself and its investors.
In any case, maximizing the value of acquired companies and the return to Bain’s investors, not job creation, was the firm’s fundamental goal, as it was for most private equity operations.
Bain Capital’s acquisition of Ampad exemplified a deal where it profited handsomely from early payments and management fees, even though the subject company itself ended up going into bankruptcy.
Dade Behring was another case where Bain Capital received an eightfold return on its investment, but the company itself was saddled with debt and laid off over a thousand employees before Bain Capital exited (the company subsequently went into bankruptcy, with more layoffs, before recovering and prospering). Bain was among the private equity firms that took the most fees in such cases.
In 1990, Romney was asked to return to Bain & Company, which was facing financial collapse. He was announced as its new CEO in January 1991 (but drew only a symbolic salary of one dollar). Romney managed an effort to restructure the firm’s employee stock-ownership plan, real-estate deals and bank loans, while rallying the firm’s thousand employees, imposing a new governing structure that included Bain and the other founding partners giving up control, and increasing fiscal transparency.
Within about a year, he had led Bain & Company through a turnaround and returned the firm to profitability without further layoffs or partner defections. He turned Bain & Company over to new leadership and returned to Bain Capital in December 1992.
Romney left Bain Capital in February 1999 to serve as the President and CEO of the 2002 Salt Lake City Olympic Games Organizing Committee. By that time, Bain Capital was on its way to being one of the top private equity firms in the nation, having increased its number of partners from 5 to 18, having 115 employees overall, and having $4 billion under its management.
Bain Capital’s approach of applying consulting expertise to the companies it invested in became widely copied within the private equity industry. Economist Steven Kaplan would later say, “[Romney] came up with a model that was very successful and very innovative and that now everybody uses.”
At the time of his departure, Romney negotiated an agreement with Bain Capital that allowed him to receive a passive profit share as a retired partner in some Bain Capital entities, including buyout and investment funds. Because the private equity business continued to thrive, this deal brought him millions of dollars in annual income.
As a result of his business career, by 2007, Romney and his wife had a net worth of between $190 and $250 million, most of it held in blind trusts since 2003. An additional blind trust existed in the name of the Romneys’ children and grandchildren that was valued at between $70 and $100 million as of 2007.
The couple’s net worth remained in the same range as of 2011, and was still held in blind trusts. By 2010 and 2011, Romney and his wife were receiving about $21 million a year from investment income, of which about $3 million went to federal income taxes (based upon the beneficial rate accorded investment income by the U.S. tax code) and about $3.5 million to charity, of which about $2 million was to the LDS Church.
Romney has always tithed to the church, including stock from Bain Capital holdings. In 2010, the Romney family’s Tyler Charitable Foundation gave out about $650,000, with some of it going to organizations that fight specific diseases.