There ought to be a law. That would be legislation which limits what public company CEOs get when they are fired. Maybe the limit should be $1 million. How much is failure really worth?

The departing head of American International Group (NYSE: AIG), Martin Sullivan, will pick up $47 million as he hits that door. According to the FT, "Mr Sullivan's departure was deemed a resignation for "good reason", according to AIG." His "good reason" was that the board would not allow him to stay in the building. What better excuse can a man get?

Sullivan can hardly be blamed for taking the money and retiring about his yacht to hit golf balls into the ocean. The AIG board shoulders that burden. The chairman of that board, Robert Willumstad, took Sullivan's job. Maybe it was easier to move up to CEO with Sullivan fat and happy.

But, there ought to be a law.

Douglas A. McIntyre is an editor at 247wallst.com.

AIG's former chief to get $47 million originally appeared on BloggingStocks on Wed, 02 Jul 2008 10:22:00 EST. Please see our terms for use of feeds.

Lehman Brothers Holdings Inc.

Continue reading Why did Lehman retain CEO Fuld while AIG fired Sullivan?

Why did Lehman retain CEO Fuld while AIG fired Sullivan? originally appeared on BloggingStocks on Mon, 16 Jun 2008 11:11:00 EST. Please see our terms for use of feeds.

MAJOR PAPERS:

• According to people familiar with American International Group Inc's (NYSE: AIG) board, some directors feel that another big loss in the current quarter could prompt them to re-evaluate their support for CEO Martin Sullivan. The sources said a decision on Sullivan's fate isn't likely to be made until the company sees results over the next several months, the Wall Street Journal reported.
• The Financial Times reported that Kohlberg Kravis Roberts, The Blackstone Group LP (NYSE: BX) and Apax Partners are among the private equity groups that have been blocked from bidding int he first round of the GBP7B auction of The Royal Bank of Scotland Group Plc's (NYSE: RBS) insurance business.

• The Boeing Company (NYSE: BA) closed a helicopter production line for several hours yesterday due to possible irregularities found in two military helicopters, the Seattle Times reported. The company did not disclose exactly why it shut down the production of the H-47 Chinooks.

• According to Mac Rumors, citing French LeMatin.ch, a source in Swisscom AG (OTC: SCMWY) said Switzerland will be getting the iPhone device from Apple Inc (NASDAQ: AAPL) this summer, and it will feature GPS, Video Conferencing and Mobile TV.

Newspaper wrap-up: Boeing temporarily shuts down helicopter production line originally appeared on BloggingStocks on Wed, 14 May 2008 08:00:00 EST. Please see our terms for use of feeds.

Continue reading Cramer on BloggingStocks: Spitzer's men couldn't put it back together again

Cramer on BloggingStocks: Spitzer's men couldn't put it back together again originally appeared on BloggingStocks on Tue, 12 Feb 2008 08:35:00 EST. Please see our terms for use of feeds.

There are two kinds of CEOs: innovators -- who come up with growth ideas -- and janitors -- who cut costs and instill discipline. There are times when it's best to invest in an innovator, and others when a janitor generates superior shareholder returns. What does this mean for stocks? Potential buys include Boeing Co. (NYSE: BA), Google, Inc. (NASDAQ: GOOG), and American International Group, Inc. (NYSE: AIG), and potential holds include Hewlett-Packard Co. (NASDAQ: HPQ), Microsoft Corp. (NASDAQ: MSFT), and Apple, Inc. (NASDAQ: AAPL).

This thought came to mind after reading an excerpt from the Wall Street Journal's Alan Murray's new book -- Revolt in the Boardroom: The New Rules of Power in Corporate America. It's a measure of his clout that he got the front page [subscription required] -- albeit of the Saturday edition. Murray's argument is that "boring" CEOs are now on the rise "in the wake of ... Enron" (a hackneyed expression that should be banned from the journalistic lexicon).

Following journalistic convention, Murray extrapolates a trend from three cases. He argues that boards have appointed "boring" CEOs -- I call them janitors since they are the executive equivalent of a clean up crew that comes in after a rock concert -- to avoid their predecessors' scandals. He cites the "boring" examples of Jim McNerney at Boeing, Martin Sullivan at AIG, and Mark Hurd at HP. They can boost the stock price for a while by cutting excess cost and instilling process discipline.

But they often fall down when it comes to generating revenue growth ideas. This is where investors can benefit from an innovator CEO -- the archetype of which is Apple's Steve Jobs. For investors there are two problems with such innovators:

Continue reading What kind of CEO should you invest in -- innovator or janitor?

What kind of CEO should you invest in -- innovator or janitor? originally appeared on BloggingStocks on Sat, 05 May 2007 11:10:00 EST. Please see our terms for use of feeds.