By Matt Coker
By R. Scott Moxley
By Charles Lam
By Nick Schou
By Gustavo Arellano
By Gustavo Arellano
By Steve Lowery
By R. Scott Moxley
Nicholas is only sort of repentant about this behavior. "I had an imbalance in my life," he conceded. "But I still believe that if you aren't wondering if your work is worth it—if you don't think about quitting at least a couple of times a week—then you are not putting enough pressure on yourself."
Nine months after Broadcom went public in April 1998, Nicholas and Samueli were billionaires, and hundreds of their employees—whose below-market salaries had been sweetened with stock options—became millionaires. By 2000, when Forbes magazine calculated their net worth at $10 billion each, Nicholas and Samueli supplanted Donald Bren of the Irvine Co. as Orange County's richest residents.
Meanwhile, Nicholas' reputation expanded, from autocratic tyrant at work to outrageously conspicuous consumer. He tricked out his home by seamlessly blending the latest in computer gadgetry with a stunning array of antiques from centuries ago. He bought Harleys, Ferraris and Lamborghinis. He bought a charter-airline company. He became a high-profile philanthropist, donating millions not only to the arts and children's charities but also $1.28 million to the UCI crew team. At the press conference announcing the latter, Nick challenged the team's captain to a pull-ups contest. The kid dropped out after 11; Nick went for 27.
He became known as such a party animal that maybe only Dennis Rodman got more publicity for his carrying on. Of course, the dot-com bubble popped, and the stock plummeted, and Nicholas' net worth diminished by 80 percent. But Broadcom survived, and when Nicholas retired—with 34.4 percent of the stock—he still had $2 billion and the reputation, whatever that was worth.
It's difficult to get a feel for that because Nicholas' public profile is as jagged as an electrocardiogram. Additionally, although his riches and generosity qualify him as a prized recruit to the innermost circles of OC's high-society philanthropists, somehow he inevitably remains an outsider.
For example, although Nicholas and Samueli have donated upwards of $13 million to the Orange County Performing Arts Center and served on its board of directors, in 2002 four other directors—Broadcom shareholders who'd lost money when the stock tanked—accused them of securities fraud in a $50 million lawsuit.
The names on the lawsuit were among the most highfalutin in OC business circles—Thomas T. Tierney, chief executive of Tustin-based VitaTech International, Inc. and BodyWise International, Inc.; Benjamin Du of Newport Beach, president and founder of FloJet; Robert J. Follman of Coto de Caza, president and CEO of RA Industries; and Thomas E. Tucker of Newport Beach, president of Genstar Capitol and chairman of the Republican political-action committee known as the New Majority. Their suit accused Nicholas and Samueli of accounting practices that misrepresented Broadcom's revenue, keeping stock prices artificially high and enabling Nicholas and Samueli to sell shares at a greater profit.
Though not part of the suit, New Yorker film critic David Denby voiced similar criticisms while promoting his book American Sucker.
"I don't blame anyone else for the stupid things that I do. But I am angry that so many CEOs behaved badly, that they got their boards to vote them options in 2001 before the telecom crash or during it, when they knew that the market for their goods—say Broadcom was about to collapse," Denby said while on CNNfn in February. "Henry Nicholas, the CEO of Broadcom, took $800 million, you know, cashed in his options, while the outsiders, the small-time investors like myself, having bought the stock at a very high price, crashed and burned."
Nicholas described the lawsuit as "completely without merit. I sell my stock according to a schedule. Beyond that I think there should be more requirements on when CEOs can sell stocks. I think CEOs should have to announce stock sales 6 months in advance—provide the market with that much advance warning, get rid of all the suspicion.
"I view our legal system as a means of last resort for people who cannot resolve their differences. If someone has a problem with something I do—and I know them?—I expect them to come to me and tell me. I make mistakes sometimes. I can accept that. But none of them had that kind of integrity."
Nicholas and Samueli reacted to the suit by resigning from the OCPAC board.""Their actions caused somewhat of a rift in the OC conservative business community," said Nicholas. "I think a lot of people were disgusted by what they did. It's not something I would have done. But then, I do things differently."After all the stories, Nick insisted, nobody's gotten him right."So apparently, now I have an image," he snorted, sounding disgusted but also starting to smile. "I tell you, it's amazing to me that I have an image. I never thought I would have an image. Like, there's me, and then there are these things that people say about me."Yet Nick wasn't quite complaining about the journalism he said has caricatured him. He giddily bragged, "I'm the only person who's ever had a full-page photo in Forbes wearing a work-out T-shirt—and a full-page photo in Muscle & Fitness wearing a three-piece suit!" As with most things, Nick preferred analyzing the media machine. He figured he's got the qualifications. "My mother was a teacher, and my stepfather actually taught in journalism school at UCLA," he said, "so I can understand and empathize with reporters and their problems."And dwell on them, too. More than four years after being profiled in an extensive Los Angeles Times Magazine cover story, Nicholas could still dissect from memory the passages where he thought the reporter was "trying to be artistic" or "going for the shock value" and "trying to create a kind of analogy between what the modern CEO has become and rock musicians." Ultimately, he traced the story's "failure to capture the real Henry Nicholas" to the desks of the editors and headline writers "who slashed it, and then they put it like, you know, 'Henry Nicholas, who worked and partied his way to the top.'"Nicholas paused and rose from his couch—and kept rising, as if by hydraulics, his long, slender torso riding higher and higher on legs that seemed to extend like telescopes until the swatches of brown hair on the top of his head were six feet, seven inches off the ground. Dude is seriously tall. He dramatically unfolded his long arms, then placed his hands on his hips and held them there, elbows out, in a pose not unlike a comic-book superhero. He stood like that, in his dark, pin-striped, three-piece suit with the blue shirt and gold tie, basically allowing me to decide if the flesh-and-fabric reality of an all-business man like this matched the image of the X-treme giga-geek genius described in those stories."Anyone who knows me . . . well, look . . ." Nick challenged me. "Everyone was saying, 'Parties his way to the top?' Yeah, all those parties! Boy, wouldn't that have been cool!"But no," Nick said, definitively. "No!"He sat down; got quiet for a moment. "Okay . . . okay, okay, okay! Back then, I threw two parties a year," Nick acknowledged. "There was one, I turned 40. That's when I met the guys from Orgy. They played at my party. But originally they didn't want to play. See, at that time, I was getting all tied in with Time-Warner; they had a lot of music properties and whatnot and Sony distribution. So I get tied in with Jimmy Iovine, the music exec, and I tell Jimmy, 'Let these guys know that I like rock music.' Like Korn or whatever. I wanted Korn to play. But then Korn decided, 'We're too cool.' So then I thought, 'We can get Orgy!' But Orgy decided, 'We're too cool.' I mean, come on, playing at a 40th birthday party in a guy's back yard? Can you imagine anything more compromising to your integrity as an artist than doing that?"But then Orgy decided they were going to break up. A couple of 'em said, 'We should get money because this is our last deal.' The guy most against playing my party came to check me out, thinking he was going to confirm all the reasons not to do it. We met, I told him who was going to be here, told him the band could bring friends, told him I wanted them to bring a list of songs because, in addition to the band playing, I have an Integrated Voice Video Data System with all sorts of music, and one of the things I like to do is expand my musical horizon by finding out what you listen to. We start talking about music, and he went back to the band and said, 'Guys, I was against this, but all I can say is this is not going to be uncool.' So Orgy came, and this was going to be their last gig, but it ends up . . ."Nick took a breath. He took a gulp from his second cup of black coffee. He took a couple of bites from his third Met-Rx energy bar."If you are only going to have a couple of parties a year, they should be good," he continued. "So at 5 in the morning, actually, we went through till the next night, and I ended up at my 40th birthday party being the psychiatrist and marriage counselor to the band. I talked them out of breaking up! I convinced them! They came out with their second album. And we got to be very close friends."Nick leaned back on his couch, looking proud. But only for a second or two. Then he leaned forward for another blast of coffee and another chunk of Met-Rx bar. His face was serious as he seemed to reconsider what he'd just said. Then he chuckled, kind of lovingly, the way people chuckle at an incorrigibly mischievous but ultimately good-hearted kid. It was a disarmingly sweet moment."Well, if that image helps me get my message and my ideas out," Nick shrugged, kind of surrendering and grasping at straws at the same time, "well, okay then."How does being a multibillionaire not make somebody at least a little bit bonkers? Maybe if they're already made a little bit that way. By the end of the day with Henry T. Nicholas III, it had become clear that he's pretty much the same guy he would have been with any sized bank account. He has a brilliant intellect that won't let him alone—or you, either. He's the jawboning buzz saw you find yourself next to in a bar or on a plane or sometimes standing on a street corner, blabbing away to nobody in particular. He has a mind like a tack, a heart of gold and a very hard ass. He is the nicest, brightest guy you just know would be the boss from hell at a company he'd make sure never went out of business.Making $2 billion has barely begun to teach Nicholas how to live with that kind of money. How to raise his kids with it. How to relate to his old friends or make new ones. How to recognize the limits of what money can buy, not only himself, but also, maybe more important, others. Because now Nicholas is living in a world of so many problems that his money might solve—and so many more that it cannot. Where do you begin to make those judgments when faced with countless appeals to your generosity? Or do you just forget the whole thing and get a thicker, darker layer of window tint on your limo?Confronted with those questions, Nicholas slowed down for the first time all day."It's hard," he admitted. "It boils down to individual decisions in countless situations day after day. But I realize I am in a position where I can make a difference—and I have decided that if I can, I must. At the same time, though, the responsibility to try to help brings with it a responsibility to make sure I am really helping—that the situation is for real or that I am helping in the most productive way."But there is a whole cottage industry of parasites who make it their business to be friends of billionaires. The problem is that because they have an agenda, they are often better with you than your real friends, who don't know how to act with you anymore. And then there are the bullshitters. Maybe they have hard-luck tales to tell or maybe they want advice. In general, you constantly encounter people who treat you differently because of the money or just because they perceive you as a success."Doesn't $2 billion pretty much advance the perception of Nick's success to the point of confirming it? With that question, he ramped up to warp speed again."All I've done is make money," he scoffed. "I have achieved none of my goals. All I can say is that I still have a chance of achieving them—if in five years, Broadcom has changed the world, if we think of the Internet the way we think of dial tone. The fact that nobody talks about dial tone means it is a success. The fact that we do nothing but talk about the Internet means it's a piece of shit. There is a long way to go."And if that world comes after all that frenetic work, will it be better in the most immediate sense? Would Nicholas want his kids to work for a guy like him?"I would hope," he said, hesitating a little, "that they find something in their lives to be passionate about. Where that takes them or how they channel that passion is for them to discover. What I hope they see in me is that I have something I believe in. As a role model, I am glad my kids have seen me working hard. But they have also seen me discover that it is not healthy to make work 100 percent of everything you do. Not that I regret a thing. I've never made a decision I regretted. There are some I would do differently, but I think I've always made the best decision I could at the time. After that, I've always accepted the results and seen the process through. That's the best anybody can do."A few minutes later, Nick was playing air guitar to Rage Against Machine's "Killing in the Name Of," and a few minutes after that, he was talking about his cars, listing every one he's ever owned, in order, beginning with the 1962 Catalina his aunt gave him. When he got to the Lamborghini, he got excited. "Want to drive it?" he asked. "You can. You should!"After thinking about it for a moment, I said no. Something about the thought of being on the open road in a Lamborghini with a multibillionaire like Henry T. Nicholas III worried me into wondering if I'd ever get home. Plus, by then, he'd already talked me blind.I had a real problem serving on a board with people like that," said Nicholas. "And their response to our resignation made it even worse—they couldn't understand why Henry and I would be upset. To them, it was just business. Just business! Henry and I founded Broadcom! To me, Broadcom and the integrity with which we run it—we've prided ourselves on being able to do business on our word and a handshake—makes their lawsuit a personal affront.