As though we needed another reason to be disgusted with corporate governance in the United States, here's a gem from The Wall Street Journal (subscription required): "So far this year, 46 outside directors who are CEOs or chief financial officers left the boards of 42 companies in three struggling industries -- financial services, retail and residential construction -- concludes an analysis for The Wall Street Journal by Corporate Library in Portland, Maine."

Directors at companies like Ford (NYSE: F), General Motors (NYSE: GM), Sprint Nextel (NYSE: S), and American International Group (NYSE: AIG) have been resigning, citing the huge amount of time required to be a director at a company faces extinction.

Oh where to begin. First of all, isn't it a little bit messed up to go along collecting a salary in the $150,000 per year range (which is what GM directors are paid) to go to a few meetings a year when times are good, and then head for the hills when the going gets tough? Isn't that like working for ten years as a security guard at a posh country club without incident and then calling in your resignation at the first sight of a burglar?

Continue reading Directors leave when companies need them most

Directors leave when companies need them most originally appeared on BloggingStocks on Sun, 23 Nov 2008 17:40:00 EST. Please see our terms for use of feeds.

Dateline, January 3, 2007: Bob Nardelli steps down as CEO at Home Depot (NYSE: HD). In leaving, Nardelli, who had been at the head of Home Depot for six years, scooped up a severance package valued at about $210 million, kindly tipped his hat, and slid his resume across the desks of Chrysler. Does this make the man an opportunistic corporate blood sucker, an overcompensated leadership figurehead, or just plain shrewd? My answer to that question would be, none of the above.

When trying to judge the departure of Robert Nardelli relative to his compensation and performance, two things need to be considered right on the front end. First, our jealousy factor must be removed from the equation. Second, we need to remember that compensation packages at this level are negotiated on the front end. Bob Nardelli didn't "get away" with anything. He executed the terms of an employment contract, plain and simple. How many of the ambitious persons reading this blog wouldn't have done exactly the same when given the same circumstances?

Most of the negative sentiment surrounding Nardelli's well-heeled departure emanated from shareholders who were hurt by a slow yet significant decline in HD's share value. But the fact is that within the past four years of Nardelli's tenure, HD's shares provided more consistent performance than the four years prior. Granted, investor's haven't seen Home Depot shares approach the past high of nearly $70, but in light of today's economy they probably won't see anything like that in the near future, and that's certainly not Nardelli's fault.

Continue reading Money Winners of 2007: Bob Nardelli takes the cake and eats it too

Money Winners of 2007: Bob Nardelli takes the cake and eats it too originally appeared on BloggingStocks on Fri, 14 Dec 2007 15:36:00 EST. Please see our terms for use of feeds.

Top executives agree they are overpaid originally appeared on BloggingStocks on Mon, 15 Oct 2007 17:38:00 EST. Please see our terms for use of feeds.

Microsoft's (MSFT) Ballmer receives $1.3 million pay package originally appeared on BloggingStocks on Tue, 25 Sep 2007 11:46:00 EST. Please see our terms for use of feeds.

Microsoft (MSFT) loses top exec in China to NBA originally appeared on BloggingStocks on Thu, 20 Sep 2007 12:59:00 EST. Please see our terms for use of feeds.

A number of high-profile CEOs must not have provided enough information on their compensation packages. The SEC is sending them letters asking for a little more detail. The agency has already sent out about 300 letters.

According to The Wall Street Journal, the heads of very large companies, including GE (NYSE: GE) and Coca-Cola (NYSE: KO) are being asked to provide more information about how they are paid [subscription required].

Among the things that interest the SEC is how pay consultants make calculations for corporate boards. The Journal quotes the SEC's director of corporation finance, John White, saying, "We're seeing a lot of really vague disclosure" about individual performance goals and targets.

The issue can't really be that hard to resolve, especially at very big companies. They know full well how their CEO's pay is set, who is involved, who is consulted from outside the company, and what the final comp numbers are. It is not rocket science.

It is, however, another area of friction between the SEC and big companies.

Douglas A. McIntyre is a partner at 24/7 Wall St.

SEC digs for details on CEO compensation originally appeared on BloggingStocks on Fri, 31 Aug 2007 08:05:00 EST. Please see our terms for use of feeds.

Sears ex-chief Alan Lacy goes private originally appeared on BloggingStocks on Fri, 13 Jul 2007 14:04:00 EST. Please see our terms for use of feeds.

Backlash building against rich executives originally appeared on BloggingStocks on Wed, 28 Mar 2007 15:15:00 EST. Please see our terms for use of feeds.

The title reads: Hello friends! Welcome to Wal-Mart!

I posted an article on Monday January 15, addressing Wal-Mart Stores, Inc. (NYSE: WMT) and I suggested some ideas for it to consider in pursuit of future growth. I don't honestly think Wal-Mart will hear about my ideas, much less implement them but I have fun writing this stuff anyway. A motivated fellow we'll call Jack sent me some suggestions of his own. I think Jack has some good ideas so I'd like to share them with you.

Continue reading Hola amigos! Recepción al Wal-Mart!

Hola amigos! Recepción al Wal-Mart! originally appeared on BloggingStocks on Wed, 17 Jan 2007 14:44:00 EST. Please see our terms for use of feeds.

Every time we write a critical post about Time Warner or Microsoft, or expose a negative fact, rumor or analysis, the refrain renews: fire the CEO! Dick Parsons, that lucky guy, gets the brunt of our readers' anger. He's screwing up Time Warner, you've told us time and time again, he should go. So say you of Microsoft's Steve Ballmer, he of the explosive personality, sweaty armpits, and billions in inexplicable operating expenses. Sometimes it's Jeff Immelt of GE, or even well-loved figures like Meg Whitman of eBay.

But usually, it's Dick. Today is no different. With 2nd quarter earnings coming out next Wednesday, and everyone wondering about the company's plans with its AOL unit, Joan Lappin from Gramercy Capital Management demands in the pages of Fortune, "Save Time Warner, Fire Parsons."

It's nothing new, but it's worth evaluating her reasons for the radical battle cry. She argues that Parsons is all about politics (in fact, he's rumored to be angling for a 2009 run for New York City mayor), a skill that helped him avoid perishing in the "shark tank" that has been Time Warner's boardroom for the past decade and earned him credit as being a "Teflon Don," but has failed miserably to maintain Time Warner's legacy as a creative, entrepreneurial culture where good managers were rewarded "generous financial incentives for producing solid earnings growth." Fire Parsons, she says, and maybe that creative culture can be revived.

I honor her passion, and agree that the creative, entrepreneurial company always wins over the political shark tank. But who, Joan, is positioned to take the helm from him? That question must be answered before anyone brings out a block and starts chopping.

Should Dick Parsons be fired? (or Steve Ballmer or Jeff Immelt or ...) originally appeared on BloggingStocks on Tue, 25 Jul 2006 20:19:00 EST. Please see our terms for use of feeds.