Wal-Mart just doesn’t get it. It spends considerable time and energy on social responsibility initiatives, like promoting diversity at vendors (after begin named as defendant in the largest class action discrimination suit in history) and becoming environmentally responsible (after having settled an EPA action). Yet the company continues to engage in behavior which, if not […]
Read more...A story in Thursday’s Financial Times, “Global, universal, unmanageable? Why many are wary of bank mega-mergers,” by Peter Thal Larsen describes why most bank mergers fail to live up to their promise. Even though the srticle was prompted by the possible Barclays-ABN Amro merger, its logic applies to much smaller deals. Most advocates of banking […]
Read more...Forgive the Financial-Times-heavy series of posts today, but it seems to work out once a week or so that the FT has a lot of good material that isn’t replicated in the US press. John Kay’s comment on private equity funds in Tuesday’s FT is skeptical without being doctrinaire. His big question is whether the […]
Read more...Um, because Barney Frank is making their case? This great post from Dean Baker at Beat the Press makes a simple and persuasive argument: Representative Barney Frank has proposed a law that would require corporations to have non-binding polls of their shareholders on CEO compensation packages. According to Marketplace Radio, the opponents of this measure […]
Read more...The blog Conglomerate pointed us to a paper, “The Fetishization of Independence,” by one of its one-time writers, Usha Rodrigues, Assistant Professor of Law at the University of Georgia. They argue it is a “great” paper. I’m not sure I’d go that far, but is well documented and certain to cause a lot of debate. […]
Read more...An article in today’s Wall Street Journal, “Wrong Way? Street Signs Point to Speed,” contained some data that does much to explain the current problems with corporate governance: According to Sanford C. Bernstein chief investment officer Vadim Zlotnikov, the average holding period for stocks on the New York Stock Exchange and American Stock Exchange last […]
Read more...A good piece in today’s Wall Street Journal, “Shareholders Push for Vote on Executive Pay,”recounts the efforts of major institutional investors to exert pressure against excessive CEO pay via non-binding shareholder resolutions. UK funds have been in the forefront of this effort, because similar regulations are already in force there. Although the UK rules have […]
Read more...Those of you who live in New York City doubtless recall how Mayor Rudolph Giuliani initially secured his reputation. The city was perceived to be out of control. Crimes, petty and not so petty, were rampant. Most people felt a bit anxious on the street at night. Couples, once they had children, decamped to the […]
Read more...The open question is whether this is good news or bad news. Fannie Mae’s decision to cancel $44.4 million in top officer bonuses for 2001 through 2003 because they were based on earnings overstatments produced by violations of accounting rules is unquestionably the right thing to do. No one should profit from a fraud they […]
Read more...This post on Thomas Palley’s blog, which I found thanks to Mark Thoma’s Economist’s View, argues cogently for an expansion, rather than a rollback, of Sarbanes-Oxley, the corporate governance reforms implemented in 2002 in the wake of big corporate accounting scandals, such as Enron and WorldCom. Palley, an economist, observes that Sarbox has not stopped […]
Read more...Funny how one man’s shareholder activism is another man’s shareholder democracy. As we’ve discussed, and as is probably evident to any reader of the Wall Street Journal, the corporate establishment has long been demonizing shareholder activists (ah, those long haired rebels!) of all sorts. Before, the Business Roundtable and the Chamber of Commerce lambasted environmental […]
Read more...Dealbreaker.com has been on top of the latest developments in the Enron case, namely that CEO Jeff Skilling’s sentence may be reduced from 24 years to six months (!) and that the Justice Department has decided not to appeal a Fifth Circuit appeals court decision overturning most of the conviction of Merrill Lynch investment bankers. […]
Read more...No, I am not talking about rendition or signing statements or warrantless wiretapping of American citizens. I am concerned about the fact it has become acceptable for corporations to welsh on their agreements. Exhibit 1: a page one story in yesterday’s Wall Street Journal, “Fights Over Health Claims Spawn a New Arms Race.” The article […]
Read more...Doug Smith, in his post “Putting Shareholders First? Wrong!” at StrategyWorld makes a persuasive case that companies can’t put the interests of shareholder values above other considerations if they are to do more than engage in a Potemkin-village version of corporate social responsibility. He focuses on the tendency to give shareholder concerns primacy, rather than […]
Read more...Maybe it’s just coincidence, but there seems to be a run of particularly good humorous posts on finance-related matters. This one, “Adjusted GPA on a Pro Forma Basis,” from Long or Short Capital, is on the desirability of students learning to misreport, ummm, manipulate, ummm, position data, via how they present their GPAs on their […]
Read more...