Al Verrecchia, on his last day as Hasbro’s chief executive officer. Under his leadership, the company emerged with a record stock price and a strategy that analysts agree should keep Hasbro a dominant player in a new world of family entertainment.

The Providence Journal / Bill Murphy

Al Verrecchia was at home in Warwick one Saturday in August 2000 when the phone rang. His boss, Hasbro Inc. chairman and chief executive officer Alan Hassenfeld, was calling.

What’s up? Verrecchia said.

Herb Baum has left, Hassenfeld said.

Baum, Hasbro’s number-two executive, had resigned to run Dial Corp., the soap manufacturer. Verrecchia, who headed Hasbro’s global operations, was third in the Pawtucket-based toy maker’s hierarchy.

He was not a happy manager that summer eight years ago. Employee morale was dismal. Revenues were declining and the company was dangerously in debt. Hasbro made $327.5 million in 1999 –– but would end 2000 with a loss of $140 million.

Not long before, Hasbro had been a Wall Street darling –– a once tiny company that had grown to surpass $4 billion in revenues. Now, its stock price was tanking.

Hassenfeld invited Verrecchia to his house in Bristol the next day.

I want you to run the company, he said when Verrecchia arrived.

Verrecchia, who started at Hasbro while he was in college, believed he had the ability to run the world’s second-largest toy company. But Hassenfeld, who’d taken charge in 1989, had never asked him. Convinced that he never would, Verrecchia had already told Hassenfeld that he would leave Hasbro by the end of 2000.

Hassenfeld’s offer tantalized Verrecchia –– but he was, typically, cautious. He wanted assurance that the chairman would not second-guess him.

I want to be president and chief operating officer, he said. I want you to give me complete freedom to fix the company.

You have it, Hassenfeld said. You can do what you want, when you want, and how you want.

And so began the conclusive chapter in Verrecchia’s storied journey to the top of Hasbro, which hired him in 1965 as a $1.75-an-hour accountant. A Rhode Island native, Verrecchia had never heard of Hasbro, which Alan’s grandfather cofounded in the early 1900s. Verrecchia only wanted a job. He got one –– and a career, entirely at the firm, that spans five decades.

Now 65, Verrecchia retired last week as Hasbro’s CEO, a post he assumed in 2003. He will remain as chairman of the company, which, under his leadership, has emerged from the crisis of 2000 with a record stock price –– and a strategy that analysts agree should keep Hasbro a dominant player in a new world of family entertainment.

ON THURSDAY, his last day as chief executive, Verrecchia arrived at Hasbro’s world headquarters on Pawtucket’s Newport Avenue shortly before 7 a.m., the usual time. Sipping an ice coffee, he checked his e-mail and reread the script for the presentation he would make later that morning at Hasbro’s annual meeting. He was in good spirits.

Verrecchia’s office is the largest of several that ring the central atrium, a serene and sky-lit room, designed at Hassenfeld’s direction, that features a reflecting pool, marble floor and 13 bamboo plantings. Verrecchia has decorated his space with toys and citations and photos of his wife of 44 years (on June 11), Gerrie, and their four children and three grandchildren. An almost-human-size Mr. Potato Head sits on a chair, and a FurReal pony (almost-pony-size) peers out from a corner. The atmosphere is playful, but his desk mirrors Verrecchia’s managerial style: perfectly organized, the reports and documents that shape a $3.8-billion company all in order, not a page out of place.

He wore a gray suit and blue tie (Gerrie’s recommendation) on his last day and his shoes were shined to a gloss, his hair carefully combed, as always. Verrecchia is graying, but time at the gym keeps him fit and he looks younger than his years.

Verrecchia rose through Hasbro on the financial side of the business, his strongest skills in numbers, management, acquisitions and corporate alliances –– a man, sometimes unfairly stereotyped as a suit, who presided over more than one Hasbro downsizing. But in reminiscing on his career, he sounded awed when describing his 43-year association with imaginative minds, the designers and the marketers.

“Watching people who are in their 20s and 30s who come to work every day to create new products and new ideas is really a special kind of thing,” he said. “To know people who create things like Transformers and G.I. Joe –– who come up with these ideas and write the stories about them. That’s very different than digging coal out of the ground or drilling for oil or selling cheese.”

The first non-Hassenfeld to lead Hasbro since its founding, Verrecchia said he was privileged to have worked for the late Merrill Hassenfeld, father of Alan and Stephen D. Hassenfeld. Stephen first brought Hasbro to Wall Street attention in the 1980s, when, as chairman and CEO, the company enjoyed spectacular success. He died of AIDS in 1989, at the age of 47.

“He was probably the most successful CEO in America at the time,” Verrecchia said. “He won all kinds of awards and took Hasbro on the kind of ride it will be hard for anyone else to replicate.”

As 8 a.m. neared, Verrecchia left his office to greet members of Hasbro’s board of directors. Among those on hand were Jack M. Greenberg, former chairman and CEO of McDonald’s. Alan Hassenfeld’s mother, Sylvia Hassenfeld, 87, a major stockholder and emerita board member, was there, too.

The board met over breakfast, and by 11 a.m., members had crossed the street from the headquarters to Hasbro’s main building for the annual meeting. Verrecchia and Brian Goldner, his successor, addressed the shareholders. A video tribute to Verrecchia was shown. Alan Hassenfeld, retiring as chairman (he will remain on the board) had rare praise for the man who now heads the board. He called Verrecchia an “adopted Hassenfeld.”

Said Hassenfeld: “Since Steve left us, there has been only one person who, through thick and thin, has always been there for Hasbro, for our shareholders, and for me –– and that has been Al. His integrity, his business acumen, his brilliant track record, and his expertise relating to Hasbro and the issues affecting our industry make him the perfect choice for taking on the role of chairman of the board.”

A RHODE ISLAND native, Verrecchia was still a student at the University of Rhode Island when Hasbro hired him in 1965. Hasbro’s signature toys were Mr. Potato Head and action figure G.I. Joe, as popular with boys as Mattel’s Barbie was with girls.

G.I. Joe brought riches, but as the brand aged in the 1970s, Hasbro’s fortunes soured. The toy division lost $5.2 million in 1978. Merrill died of a heart attack the next year. Stephen, a brilliant marketer, took over and as the 1980s progressed, he made Hasbro into a company that had the power to buy game-maker Milton Bradley, rich with such favorites as Twister, Life, Chutes and Ladders and Candy Land. Alan continued down his brother’s path when Hasbro in 1991 bought Tonka, which brought such perennial brands as Monopoly, Nerf, and Easy-Bake Oven to Pawtucket.

Verrecchia was the Hassenfeld brothers’ key financial man during this time, but by Alan’s tenure, he wanted to be president and chief operating officer. Alan did not give him the job. Hasbro’s revenues rose from $1.5 billion in 1990, Alan’s first full year in charge, to $4.2 billion in 1999. Operating profit rose from $160.2 million to $327.5 million.

And then came the disastrous year of 2000.

ONE DAY not long after finally being named president and COO, Verrecchia sat in his office with David Hargreaves, Hasbro’s senior vice president for finance and deputy chief financial officer. Verrecchia and Hargreaves were longtime partners.

“David,” Verrecchia said, “It’s up to us now.”

As autumn 2000 unfolded, the two wrote a plan to “fix” the company, as Verrecchia would later describe it. Their urgency intensified as the year neared its end and the stock kept losing value. On Dec. 7, the intra-day trading price dropped to a modern low of $8.38 a share. This was not a number to please shareholders, of which Verrecchia himself was one.

In March 2001, Verrecchia and Hargreaves convened an off-site meeting of senior managers.

We have two choices here, Verrecchia told them. We can essentially lay off everybody and take all of our brands and license them out to other people and collect royalties. Or we can focus on our own core brands and try to rebuild this business.

There was a third option, as well: selling Hasbro. But with the stock so pitiful, the price the company would have fetched was too low to make that a realistic possibility.

The consensus was what Verrecchia vowed to do: rebuild Hasbro.

Verrecchia wanted his employees to hear the truth from him, not be at the mercy of rumors, and he called the first of what would be his quarterly informational meetings with employees. “I was dead honest with them,” Verrecchia said. “I put it up on the board. I said, ‘hey, guys, this is it, we’re in trouble. This is what we have to do.’ ”

Verrecchia renegotiated terms with banks that held long-term Hasbro debt. He cut expenses by $200 million. He improved Hasbro’s cash flow and reduced the work force from about 10,000 to 6,000, roughly where it stands today. He brought a talented newcomer, Goldner, under his wing.

With Goldner, whose marketing strengths rival Stephen Hassenfeld’s, Verrecchia and his managers chose about a dozen of Hasbro’s hundreds of brands to focus on –– among them, G.I. Joe, Transformers, Monopoly, Candy Land, My Little Pony, Nerf, Easy-Bake Oven and Tonka. Hasbro had long realized the value in its core brands –– but now, focus went beyond lip service to developing them across a broad entertainment and play spectrum. They are envisioned now as “intellectual properties,” as Verrecchia calls them, as translatable into different media as any timeless story.

With a new mantra –– reimagine, reignite, reinvent –– Verrecchia and his team made or renewed connections with publishers, fast-food chains, digital providers and Hollywood. The most spectacular fruit of their labor was the 2007 movie Transformers and its many related products. Transformers did more than $700 million worldwide at the box office, and helped boost Hasbro’s revenues from $3.1 billion in 2006 to $3.8 billion last year –– and increase net earnings by nearly 50 percent, to $333 million.

NOT LONG before last week’s annual meeting, Verrecchia sat in a conference room near his office and talked about Hasbro’s future. A G.I. Joe movie and the Transformers sequel, both scheduled for summer 2009 release, along with a recently announced partnership with Universal Pictures to produce at least four other feature movies, will deepen the company’s Hollywood connection. A deal with California’s Electronic Arts to develop video games across several platforms will enhance Hasbro’s presence in the digital world.

Wall Street approves. Hasbro stock recently traded at $37.19 a share, a record high.

Verrecchia’s own future will increasingly find him away from Pawtucket. He will hand his office over to Goldner and keep a smaller space off the central atrium of the world headquarters. He does not intend to meddle with the new CEO, or be there every day. Verrecchia, who is fond of sports metaphors, said: “Retired ballplayers go to the owner’s box, not the dugout.”

Duties as chairman of the board of Lifespan and memberships on the boards of FM Global and Old Stone Corp. will consume some of Verrecchia’s time, as will his chairmanship of the Toy Industry Association. He might teach at his alma mater, URI.

But after 43 years of long days and business travel –– after a career that has left him a wealthy man –– Verrecchia intends to enjoy a less structured life with Gerrie.

“The wonderful thing is, I don’t have to have a plan,” he said, “just get up in the morning and decide what we want to do. I want to enjoy all the hard work I’ve done over the last several years.”

He laughs.

“As a friend of mine said: ‘You don’t want to be the richest guy in the cemetery!’ ”

gwmiller@projo.com