This is a great post, “Why Market Leaders Don’t Listen to Investment Bankers,” by Charles Green at HuffPo. The set-up for this story is why it isn’t so dumb for companies to keep a lot of supposedly unproductive cash on hand. You can make similar argument for why companies shouldn’t divest their cash cows. A […]
Read more...The New York Times has an odd piece today, “Where Did the Buck Stop at Merrill?” which seeks to determine whether the unexpectedly $8.4 billion third-quarter writeoff was not just former CEO Stanley O”Neal’s failing, but also one of Merrill’s board. Another shoe may be about to drop, since the Wall Street Journal claimed that […]
Read more...A piece in Seeking Alpha, “Buybacks: A Wolf In Sheep’s Clothing,” by Matthew Hougan at Index Universe, does a nice job of debunking the myth that stock buybacks are a positive indicator for price performance. I’ve always had trouble with the logic of buybacks. If a company doesn’t believe that it has attractive enough prospects […]
Read more...The Financial Times reports today that institutional investors and the SEC are taking interest in the difficult-to-justify pay disparities between the CEO and his immediate subordinates at some public companies. And isolated data points, like Sallie Mae, suggest that the ones with the biggest gulf (in its case, ten times) aren’t delivering commensurate performance. A […]
Read more...Psychologists, when working with patients, need to differentiate between two types of people: internalizers and externalizers. Internalizers are very responsible and tend to blame themselves for Things That Happen, whether they are their fault or not. They fit well in jobs that demand professionalism and personal responsibility. By contrast, externalizers blame everyone else for their […]
Read more...Ah, time for a reality check on the Wall Street Journal/Administration party line. Here we’ve been told how horrible Sarbanes-Oxley is, and how those tough corporate governance measures are bad for the competitiveness of US markets. Like many of the things the officialdom in Washington has been telling the public, this line of reasoning doesn’t […]
Read more...Robert Reich tells us that despite the talk about moral hazard, the rich have plenty of safety nets: The real moral hazard in this saga started when Fed Chair Ben Bernanke cut the Fed’s discount rate (charged on direct federal loans to banks) and announced that the Fed would take whatever action was needed to […]
Read more...Will someone, please, teach the reporters at the Wall Street Journal the basics about scientific research? I know it’s hard finding stuff to write about day in, day out. But the story “Scholars Link Success of Firms To Lives of CEOs” is a travesty. The centerpiece of the article is a study by Morten Bennedsen, […]
Read more...Hedge funds, which even at their peak of popularity, were regarded with considerable suspicion, have taken a shellacking in the last few months as subprime tainted funds have folded or reported poor results, and “quant” strategies have failed spectacularly, due to extraordinary, allegedly unprecedented market turmoil. Of course, the problem with that defense is that […]
Read more...I’m a bit late to this item from today’s Wall Street Journal because I generally skip its softball CEO interviews. However, they do give corporate leaders the opportunity to make unwitting self revelations. Here, Estee Laude rCEO William Lauder demonstrates that he could use a primer on the basics of public ownership: On the external […]
Read more...Our colleague Susan Webber of Aurora Advisors has a new article, “Fit vs. Fitness,” in the current issue of The Conference Board Review. The editors were initially skeptical that anything new could be said on the subject of the glass ceiling, but this article persuaded them otherwise. We hope you’ll agree. She draws on personal […]
Read more...This Penn State study, reported at PhysOrg.com, ascertained that narcissistic CEOs gravitate towards bold moves, like big acquisitions or marked changes in strategy, which leads to more variable (although no worse on average) performance. The interesting thing about this finding is the disconnect between Wall Street pressures and boardroom hiring practices. At least according to […]
Read more...Although I haven’t followed the debate over New York-London market competitiveness that closely, it was clear when the study on the US’s standing was commissioned, the sponsors already knew what answers they wanted to report, and emasculating Sarbanes-Oxley (Sarbox or SOX) was an idee fixe. It didn’t seem to occur to people like Hank Paulson […]
Read more...If you are a public company, the odds say that buying another corporation is a bad idea. Academic studies have consistently found that most deals fail, and the reason most commonly cited it that the buyers overpay. Yet as with second marriages, the continued popularity of corporate M&A is a triumph of hope over experience. […]
Read more...In Saturday’s New York Times, Gretchen Morgenson reported that House Committee on Oversight and Reform had issued a subpoena to Towers Perrin, an executive compensation consulting firm, because it had failed to comply with an information request regarding potential conflicts of interest in its pay consulting business. Now because this was a news story, rather […]
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