Mercadolibre (NASDAQ: MELI) shares are trading higher today after the company's CEO terminated a prearranged stock trading plan that could have sold up to 1,768,794 shares of MELI. A few analysts released notes today after this news that were generally positive on MELI's outlook. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on MELI.

After hitting a one-year low of $21.00 in August, the stock hit a one-year high of $81.17 in December. MELI opened this morning at $28.50. So far today the stock has hit a low of $27.65 and a high of $30.73. As of 12:15, MELI is trading at $30.45, up $3.66 (13.7%). The chart for MELI looks bearish and steady.

For a bullish hedged play on this stock, I would consider a September bull-put credit spread below the $20 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in just ten weeks as long as MELI is above $20 at September expiration. MELI would have to fall by more than 35% before we would start to lose money.

By all accounts, China's demand for oil will continue to grow at a rapid clip (the country is already the #2 consumer in the world). Of course, there will also be a huge need for oil services.

To this end, CNOOC (NYSE: CEO)'s oil services division, China Oilfield Services Ltd, has agreed to purchase Awilco Offshore for $2.5 billion.

As should be no surprise, China Oilfield's business is ramping, and with Awilco, which is based in Norway, there will be a nice boost. The company posted $203.5 million in revenues last year. What's more, it has seven oil rigs in operation and six being developed.

Thus, in all, China Oilfield's rig fleet will go from 15 to 22, which is certainly a big deal. Basically, there is an extreme shortage right now. More importantly, rigs are likely to produce significant cash flows for the next couple years as daily lease rates can be as much $600,000.

So far in today's trading, CNOOC's shares are down marginally by $0.54 to $170.45.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Boston Scientific (NYSE: BSX) shares are trading higher after the company announced its chief executive officer, Jim Tobin, will remain with the company and shift his focus to day-to-day operations. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on BSX.

After hitting a one-year high of $16.67 last June, the stock hit a one-year low of $10.76 in January. BSX opened this morning at $13.20. So far today the stock has hit a low of $13.16 and a high of $13.56. As of 12:45, BSX is trading at $13.36, up$ 0.25 (1.9%). The chart for BSX looks bullish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider a November bull-put credit spread below the $10 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make an 8.7% return in just six months as long as BSX is above $10 at November expiration. BSX would have to fall by more than 25% before we would start to lose money. Learn more about this type of trade here.

One of the most tired defenses against criticism of executive pay gone wild is the comment that athletes and pop stars earn outrageous sums of money, so why not executives? It's exactly that argument that Marc Hodak uses in a column for Forbes: "When rock stars make big bucks, we can look at the ticket and album sales and understand where it comes from. But when a CEO makes rock star income, we figure he must be scamming the shareholders."

Here's why that analogy doesn't work: when an owner of a sports team decides to spend $100 million on a superstar shortstop, that's his choice. It's his money. He owns the team, and he's entitled to do whatever he wants with it. Similarly, if 12-year old girls want to collectively spend $100 million on Menudo posters (And who can blame them!), that's their prerogative.

But what if the owner of a sports team was forced to spend money on players based on the whims of retired politicians and economics professors who serve on 15 other boards, collecting $100,000 from each company in exchange for going to a couple meetings a year and have no particular stake in the outcome of the investment? And what if these decision-makers could only be voted out once every few years, but the ownership of the team was so fragmented and most of the owners were so inattentive that it was nearly impossible to get them replaced?

That is, in effect, the situation we have in executive compensation. If the owners of public companies actually had any meaningful say in how much CEOs were paid, the sports star analogy would work. Since they don't, it doesn't. Executive pay is a classic principal-agent problem, and it's one that can only be solved through improved corporate governance.

My perennial near-hero Mark Cuban recently examined the issue of CEO pay, over on his handy soapbox, The Blog Maverick. In his blog post titled "My 2 Cents on CEO Pay," Mr. Cuban outlined his position on the subject and tossed some ideas around. The post makes a good read, and the author makes some good points. Additionally, the 65 or so comments by the readers are well worth the time to cruise them.

I'd like to discuss and expand upon an idea someone presented in addition to those discussed by Mark Cuban. It's actually a reverse scenario to what Mr. Cuban describes as moving chief executive officers into "the cash zone." In the Cuban scenario, the CEO would be paid cash, without additional compensation through stock grants, in order to make their pay more tangible and visible as a business expenditure. Mr. Cuban also asserts that this might more closely align CEO compensation with company performance. It's an admirable idea, but I doubt that it will ever happen.

In this alternate approach, we give the CEO all the stock certificates he or she can swallow. Then we provide an equal number to be divided among all other employees of the company. In this manner of compensation, all employees have their hands on the ball. The concept of laboring to line the pockets of someone else with gold would become extinct. The CEO would suddenly become a real person in the eyes of the rank-and-file laborers. Likewise, the labor force would be inextricably linked to the financial success of the CEO. If labor is to share the risk, they should also share the reward.

A further stop-gap to this scenario would be if upper management deemed that labor cuts were needed to create profitability, or for any reason other than "cause," they and the CEO would be required to surrender share holdings equal to the holdings of the displaced workers. These surrendered shares would then be distributed to the pink-slipped workforce members, with the company paying all applicable taxes on the transfer. Additionally, no party would be allowed to liquidate more than 5% of their holdings in any one year, as long as they were employed by the company, and upper management would be required to maintain holdings at least equal to those of the workforce.

I know it's a lofty scenario, but it sure would beat the heck out of what we have going on now.

Amazon.com (NASDAQ: AMZN) shares are trading higher after CEO Jeffrey P. Bezos said in a letter to shareholders that he very pleased with AMZN's new electronic book-reader Kindle. He added in the letter that all major publishers have embraced the device, demand for the Kindle has been high, and that shareholders should expect more innovation from AMZN. The Kindle is currently out of stock, but AMZN expects to have more devices in stock next week. If you think that the stock won't fall by too much in the coming months, hen now could be a good time to look at a bullish hedged trade on AMZN.

After hitting a one-year low of $44.16 last April, the stock hit a one-year high of $101.09 in October. AMZN opened this morning at $76.48. So far today the stock has hit a low of $76.32 and a high of $80.92. As of 11:55, AMZN is trading at $80.88, up $6.85 (9.3%). The chart for AMZN looks neutral and improving, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider a May bull-put credit spread below the $60 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.8% return in just one month as long as AMZN is above $60 at May expiration. Amazon would have to fall by more than 26% before we would start to lose money. Learn more about this type of trade here.

AMZN hasn't been below $60 since almost a year ago and has shown support around $70 recently. This trade could be risky if the company's earnings (due out in on 4/23) disappoint, but even if that happens, this position could be protected by the support the stock might find around $62, where it bottomed out in February and March.

Brent Archer is an options analyst and writer at Investors Observer.

DISCLOSURE: Mr. Archer owns and/or controls diversified portfolios of long and short stock and option positions that may include holdings in companies he writes about. At publication time, Brent neither owns nor controls positions in AMZN.

A piece on Portfolio.com reports on an increasingly popular trend in executive compensation: the $1 salary.

Of course, in this era of outrageous pay for poorly-performing executives, the prospect of a $1 salary has its allure for investors. It's refreshing. But when you hear about a $1 salary, you still have to dig deeper to learn how much a CEO really made.

For instance, Capital One (NYSE: COF) CEO Richard Fairbanks' 2007 salary of $1 made for great headlines but a look at the proxy statement pegs his total compensation for the year at more than $20 million because of generous options grants -- which can come back to dilute the shareholders in the future and are therefore a very real expense.

Why would he structure his pay like that? Portfolio reports that "Salary is taxed at rates as high as 35 percent, while capital gains from stock sales are taxed up to 15 percent. Cutting down the salary portion of an executive's compensation could help reduce the overall tax bill."

With the vast majority of large-cap CEOs in the 35% bracket, taking cash over stock may be leaving money on the table.

But the proxy statement for Apple (NASDAQ: AAPL) shows that Steve Jobs really does only earn $1 and, more impressively, essentially never sells stock. There's a guy who really is aligned with the company's long-term shareholders.

The point is that there's nothing wrong with a CEO boasting that he only takes $1 per year in pay -- but there's also nothing necessarily great about it either. To really understand compensation, you have to go past the sound bytes and read the proxy statement.

MOST NOTEWORTHY: Southwest Gas, Hittite Microwave and Repsol SA were today's noteworthy upgrades:

• Citigroup upgraded shares of Southwest Gas (NYSE: SWX) to Buy from Hold on valuation, as they believe the company's fundamentals have improved enormously over the last three years.
• Thomas Weisel upgraded shares of Hittite Microwave (NASDAQ: HITT) to Overweight from Market Weight, as they believe the company is executing on its strategy of increasing new product introductions and growing its global sales efforts. They believe shares are undervalued and maintain a $43 target.
  
• Repsol SA (NYSE: REP) was raised to Buy from Hold at Deutsche Bank as they expect good news to flow in 2008.

OTHER UPGRADES:

• Goldman upgraded CNOOC (NYSE: CEO) to Buy from Neutral and added shares to their Conviction Buy List.
  
• Urban Outfitters (NASDAQ: URBN) was raised to Equal Weight from Underweight at Morgan Stanley.
  
• Broadpoint raised Ultimate Software (NASDAQ: ULTI) to Buy from Neutral.

A piece (subscription required) in The Wall Street Journal looks at the increasingly common practice of companies selecting new CEOs from the ranks of their current directors.

Proponents of the practice believe that a current director will already have some familiarity with the company and its people and that that makes for a smoother transition. But the Journal adds that "Some investors disagree. They contend that a chief chosen from the board signals cronyism and weak succession planning. A director's comfort with a colleague obscures `a clear view of the individual's suitability to be a successful CEO,' says Richard Breeden, an activist investor and former chairman of the Securities and Exchange Commission."

Another concern that I have that wasn't touched on in the article is that in many cases, a member of the board is brought in to replace a CEO who has been pushed aside because of poor performance.

With snickers and a wink and nod they gave that man first chair.
They set him in it like a king, "We hope you like it there."

A million two per quarter pay, perhaps a million eight.
"He's worth the price", they grinned and laughed. "We know he'll pull his weight."

In three short years he wrecked the place and drove it to the ground.
Those jobs were lost, no R&D, no market share was found.

Shareholders screamed, "Just can the rat! We've had all we can take!"
They failed to see the crony game and credentials that were fake.

So Congress said, "We'll check this out, and try to quell the noise."
All the while they smugly smirked, "We got yer back, my boys."

So when the shares did plummet fast, and plummet oh they did,
the board room finally acquiesced and let go of the kid.

His last bold move was to dig deep and grab a hundred million.
If he could have gotten 'way with it, he'd have taken half a billion.

The same old song, the same old dance,
the same pony and pup.

Excuse me please 'cause I must go drop coins in Wall Street's cup.

2008 G.E. Sattler

It didn't work out so well when Michael Jordan tried it.

But it appears that CEOs coming in out of retirement to retake control of companies is actually a good thing for companies and investors.

According to a recent study of encore performances of corporate CEOs, led by Rudi Fahlenbrach, an assistant finance professor at Ohio State University, the stocks of companies run by CEOs who've come back in from the bullpen outperform the market by 6% annually during their reign.

So, as Herb Greenberg at MarketWatch posits, this could bode well for investors in Dell Computer (NASDAQ: DELL) and Starbucks (NASDAQ: SBUX) -- both companies that have brought back CEOs to help lead their companies.

Quoting Greenberg: "According to Fahlenbrach, from 1995 through 2004 at least 75 CEOs at the country's 1,500 largest companies were called back to active duty from either retirement (especially if they still have a large financial stake in the company) or having been relegated to the chairman's outpost. "One of the most significant predictors of someone coming back is poor stock-market performance of the current CEO."

If this works for well for CEOs, do you think we can do it for the president of the United States of America? Where's Reagan these days...

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

I first heard the news that Starbucks legend Howard Schultz would once again become CEO of the company via Twitter, and the tidings are accompanied by a generous measure of skepticism: Rick Turoczy asks, "I wonder if this means I'll still get crap coffee 90% of the time?" Baristas and buzz-mongers on Starbucks Gossip seem giddy ("Uncle Howie to the rescue!!!"), although even in the land of the faithful there is some suspicion, calling the decision "smoke and mirrors" and calling exiting CEO Jim Donald a "scapegoat." I call it a classic move for a company whose stock is tumbling: bring back whatever charisma we can yank from the back of the closet.

As Chairman, Howard Schultz was certainly still involved with company and its strategy. But the stock had been plunging throughout 2007 -- and has only tumbled further in 2008 with a downgrade from Bear Stearns. As I wrote in that post, the company's coffee quality was a predictor of its stock price, tumbling from its peak under Schultz previous reign. At one point, the baristas were pulling shots in high-quality, old-fashioned manual machines that coffee connoisseurs agree make far-superior espresso to that made in the newer, idiot-proof automatic models. Drip coffee was routinely thrown away if it was burnt. Now? I have to sweeten my lattes to disguise the taste of inferiority.

Bringing back an old chief executive -- and making a scapegoat (whether expressly in the press release, or just between the lines as is the usual way) of the Jimmy-come-lately CEO -- is a well-worn trick for a once-popular company whose stock is spinning every downward. It only rarely works, and Schultz will have to do a lot more than close stores to bring me back. To get me? You'll have to not only liven up the management team, but also your core product. I want good coffee back.

Investors, other than me, seem as pleased as the baristas -- they have given the stock a nearly-9% boost from its close at $18.38, up $1.65 to $20.03 as of 8 p.m. EST.

Major news from struggling coffee seller Starbucks (NASDAQ: SBUX) this afternoon: CEO Jim Donald is being replaced by Chairman and visionary Howard Schultz, who will lead a major restructuring of the company.

The company said it will close underperforming US stores and slow its pace of expansion. Shares of Starbucks are up more than 8% after-hours, as investors apparently believe the company's problems can be fixed by a strong and highly-respected leader. Donald's resignation and Schulz's decision to return signal that the company's management is aware of its problems and determined to right the ship.

In a PR announcing the shake-up, Schultz said that "I am enthusiastic about returning to the role of chief executive officer for the long term and excited to lead Starbucks and its dedicated partners (employees) to even greater heights of achievement on a global basis. We must address the challenges we face and we know what has to be done. Put simply, we are recommitting ourselves to what has made Starbucks and the Starbucks Experience so unique: ethically sourcing and roasting the highest quality coffee in the world; the relentless focus on the customer; the trust we have built with our people, and the entrepreneurial risk-taking, innovation and creativity that are the hallmarks of our success."

Whether these initiatives will be enough to combat the company's problems and a big push by McDonald's (NYSE: MCD) into Starbucks' territory remains to be seen. But for now, investors are lovin' it.

I seriously enjoy reading Ina Steiner. She's the editor of AuctionBytes.com. I like her stuff because she's just so damn objective. She simply lays out the facts and lets you come to your own conclusions. I also like Ina because she continuously holds a very bright light directly at eBay (NASDAQ: EBAY).

Recently, Ina opened the floor at the AuctionBytes blog for discussion about the involvement of Meg Whitman in the Mitt Romney campaign. Needless to say, the situation has raised some eyebrows. Personally, I don't care what direction either Meg or Mitt choose to go. Ina's readers, however, had a very dim view of the situation. My question is, has Meg's insurgence into the political realm affected the shareholders of eBay?

Forget for a moment all the ill conceived plans that eBay has tripped over. Ignore the Skype debacle, the eBay China crash, the silencing of Stubhub and the host of other demons that in my opinion the Whitman crew has set loose, buried or denied. Forget for a moment about all that cash flowing into eBay coffers with nothing better accomplished than to outsource customer service and to pay Whitman's salary. Ignore the wolf at the door in the form of Amazon Inc.(NASDAQ: AMZN). Never mind that eBay has lost its shine and reputation and is yet to pay a dividend to its shareholders. I'm talking about presidential politics and corporate wrangling here.

Sprint Nextel Corp. (NYSE: S) shares are trading higher today after the company announced this morning that it has named Embarq Corp (NYSE: EQ) CEO Dan Hesse as its new president and chief executive. Sprint hopes the seasoned telecom veteran can turn around the company, which has lost market share to rivals AT&T (NYSE: T) and Verizon (NYSE: VZ). If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on S.

After hitting a one-year high of $23.42 in June, the stock hit a one-year low of $13.86 yesterday. S opened this morning at $14.25. So far today the stock has hit a low of $13.88 and a high of $14.25. As of 10:55, S is trading at $13.98, up 7 cents (0.5%). The chart for S looks bearish and steady, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bullish hedged play on this stock, I would consider a February bull-put credit spread below the $13 range. A bull-put credit spread is an options position that combines the purchase and sale of put options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 17.6% return in just 2 months as long as S is above $13 at February expiration. Sprint would have to fall by more than 7% before we would start to lose money.

S hasn't been below $13.86 at all in the past year and has shown support around $14 recently. This trade could be risky if the stock continues its downward slide, but even if that happens, this position could be protected by bargain hunters who might think that S has gotten too cheap.

Brent Archer is an options analyst and writer at Investors Observer. At publication time, Brent neither owns nor controls positions in S, EQ, VZ, or T.