At 4 o'clock on the morning of Jan. 20, 1964, J. Willard Marriott got out of bed and went downstairs to his study to write a letter to his son.
Marriott had been grappling with the question of management succession at the company he founded in the late 1920s, he recalled later in his biography. But unlike many founders of successful corporations who hold on to their titles, stock and power as long as possible, Marriott decided to orchestrate an orderly transition.
"It is not often that a father has a son who can step into his shoes and wear them on the basis of his own accomplishments and ability," Marriott wrote to his son Bill, who soon after would be named president of Marriott Corp.
"Being the operating manager of a business on which probably 30,000 people depend for a livelihood is a frightening responsibility, but I have the greatest confidence you will build a team that will insure the continued success of a business that has been born through years of toil and devotion by many wonderful people."
J. Willard Marriott, who died Tuesday night of apparent heart failure, was never disappointed by his decision. While retaining the title of chairman until his death at the age of 84, he gave his son Bill the added title of chief executive officer in 1972, as the company, which now employs more than 140,000, continued to grow and prosper.
Many years before, in the early 1950s, J. Willard Marriott made the critical decision to take his company public. After observing the growth and success of other Washington-based companies that had gone public, including Woodward & Lothrop and the Hecht Co., Marriott asked the local brokerage firm of Johnston, Lemon & Co. to help him sell shares.
The initial public offering of Hot Shoppes Inc. -- the predecessor company that changed its name to Marriott Corp. in 1967 and was listed on the New York Stock Exchange in 1968 -- consisted of the sale of 229,880 shares to the public at $10.25 a share, and the sale of 18,000 shares to employes at $7.54 a share. The Marriott family retained control of about two-thirds of the company's 704,800 shares, and its stake had an initial market value of about $4.8 million.
Over the years, while the family reduced its stake to about 22 percent of the total shares outstanding, the value of its holding grew exponentially. Based on yesterday's closing price of 94 3/4, the Marriott family's stake in the company has a market value of $533.9 million.
For Marriott, there were two principal advantages in going public. First, if the company was going to continue growing, it needed capital to expand, and selling stock to the public provided some of the funds needed to fuel that growth. The other reason for going public, further evidence that he carefully planned for the future, was that it allowed J. Willard and his wife, Alice, to withdraw some of their money from the business and to diversify the family's holdings.
Over the years, J. Willard and Alice Marriott reduced their stakes in the corporation, providing their children, grandchildren and great-grandchildren with stock through direct ownership and the establishment of several trusts. J. Willard Marriott personally owned 862,412 shares, or about 3.35 percent of the company, as of Dec. 28, 1984, according to the company's latest proxy statement. Alice Marriott owned 939,431 shares, or 3.65 percent.
Their sons held larger stakes. Bill Marriott, the company's president and chief executive officer, owned about 1.1 million shares, or 4.31 percent, while Richard E. Marriott, the head of the company's restaurant operations, owned about 1.3 million shares, or 4.97 percent. Another 5.6 percent of the company's shares were either in trusts for the children or controlled by other Marriott family members.
Marriott Corp., which has assets of more than $3 billion, had net income of $139.8 million last year on sales of $3.52 billion. The company operates 143 hotels and resorts with more than 62,000 rooms, and more than 1,400 restaurants, including Roy Rogers, Big Boy and Hot Shoppes. Marriott's catering operations serve airlines around the world, and the company has airport terminal concessions at 41 domestic and five foreign airports.
The company is the nation's largest chain of company-operated (versus franchised) hotels, as measured by the number of rooms. It plans to open the ambitious $400 million Marriott Marquis Hotel next month, with 1,876 rooms in the heart of New York's Times Square.