Evan Vitale Consulting: Johnson Controls fires consultant following affair with CEO

Wednesday, October 8, 2014

Johnson Controls fires consultant following affair with CEO – Milwaukee Journal Sentinel

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By Mark Clothier and Andrew Harris, Bloomberg News

Oct. 8, 2014 11:41 a.m.

Johnson Controls Inc. fired a consulting firm after learning that one of its principals had an extramarital affair with Chief Executive Officer Alex Molinaroli.

Molinaroli, 55, told his family about his affair with Kristin Ihle, a 45-year-old psychologist, in late May, according to the transcript of a court hearing at which Ihle unsuccessfully sought a restraining order against the CEO’s estranged wife. Ihle’s Milwaukee company, which helps businesses with leader development and succession planning, had been working with auto supplier Johnson Controls for years, according the consulting firm’s website.

“The board reviewed the referenced relationship and determined that no conflicts of interest occurred,” Fraser Engerman, a Johnson Controls spokesman, said in an emailed statement. “To avoid any perception or potential future conflicts, management elected to terminate the consulting firm. Mr. Molinaroli continues in his role with full support of the board, and the company considers this matter to be closed.”

Corporate directors are increasingly watchful of executive behavior because they are being held accountable for governance. In recent years, top executives at Best Buy Co. and Lockheed Martin Corp., among others, have lost their jobs after getting caught having a relationship with a subordinate. Even when boards find no conflict of interest, directors are more willing to take action because management can be distracted, or perceived as distracted, by affairs in the C-suite.

‘Less tolerance’

“Marital infidelity is not a new phenomenon,” said Larry Hamermesh, a professor at Widener University’s law school in Wilmington, Del., who specializes in corporate law. “What may be new is a sense of less tolerance of it in affecting business relationships. I think there’s probably been some cultural evolution on that front and it’s seeped into boardrooms, too.”

Molinaroli was promoted chief executive a year ago after 30 years at a company that was once the largest U.S. auto supplier. Under his leadership, Glendale-based Johnson Controls is reducing its reliance on the cyclical car industry and refocusing efforts on its building-efficiency business. The company sold an auto-electronics business to Visteon Corp. in July, and plans to divest a unit providing facilities and energy management. The stock has risen 6.3% since he became CEO, while the Standard & Poor’s 500 Index gained 15%.

Ihle, who holds a doctorate in psychology, separated from her husband last year, according to a court transcript. The couple filed for divorce in July.

Ihle, a principal at Lichter & Ihle, told the restraining order hearing officer that she is the majority owner of the firm, which also provides executive coaching.

“Our firm reached an amicable separation with Johnson Controls and considers the matter closed,” Ihle’s company said in a statement provided by her lawyer, Tom Hayes.

In an earlier career, Ihle competed as a professional runner in track and cross-country events, including two world championships, and uses her athletic experience in her consulting work, according to her firm’s website. Lichter & Ihle has worked for Johnson Controls for several years, according to a testimonial from a Johnson Controls executive on the site.

“The Lichter & Ihle team is an extension of our executive management team,” the customer testimonial reads. “Over the years they have provided continuity and insight in the areas of leader and team development.”

Smashed windows

On May 29, Molinaroli’s wife of 28 years, Patsy, 59, sent an email to Ihle: “I will destroy you, your family, and business just as you have done to me,” according to the transcript of the hearing.

Later that day, while her husband was absent, Patsy Molinaroli fired a .38 caliber pistol at least four times in their Brookfield home, according to the criminal complaint. She also smashed window panes, a Pac Man arcade game and a china cabinet, leaving holes consistent with an aluminum baseball bat found in the kitchen, according to the complaint.

The Brookfield police charged Patsy Molinaroli with two counts of disorderly conduct. She pleaded not guilty on June 4 and is scheduled to appear in Waukesha County criminal court Nov. 12. Her lawyer, Mark Pecora, didn’t respond to phone and email messages seeking comment on the case.

The day after receiving Patsy Molinaroli’s email, Ihle sought a restraining order. The Milwaukee County hearing officer who heard the women’s testimony two weeks later, on June 12, concluded there was no further threat warranting court intervention and denied Ihle’s bid for a more lasting injunction, according to the transcript. Patsy Molinaroli filed for divorce June 23.

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