Archive for March 23rd, 2008
Filed under: Management, Bear Stearns Cos (BSC), Housing
Although they might have messed up Bear Stearns (NYSE: BSC) far worse than anyone could have imagined such a venerable institution could be messed up, you’ll happy to know that current CEO Alan Schwartz and chairman and former CEO James Cayne are staying on top of their real estate holdings.
Back in February — while his company was in the midst of imploding — James Cayne spent $27.4 million on two adjacent apartments at New York City’s Plaza.
Something is badly wrong with corporate governance/executive compensation when a guy can sit by — or in Cayne’s case, play bridge and smoke doobies — while one of the financial world’s most revered institutions collapses under his watch — and still have enough left to spend $27 million on two condos.
Meanwhile, Mr. Schwartz had pulled his $4.5 million property off the market and is renting it out.
Thankfully, these guys aren’t out of the woods yet. They’ll likely spend years dealing with a slew of class-action lawsuits stemming from the collapse of the company they destroyed. As Gary Weiss recently reported, Bear Stearns is no stranger to lawsuits.
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Filed under: Management, Bear Stearns Cos (BSC), Housing
Although they might have messed up Bear Stearns (NYSE: BSC) far worse than anyone could have imagined such a venerable institution could be messed up, you’ll happy to know that current CEO Alan Schwartz and chairman and former CEO James Cayne are staying on top of their real estate holdings.
Back in February — while his company was in the midst of imploding — James Cayne spent $27.4 million on two adjacent apartments at New York City’s Plaza.
Something is badly wrong with corporate governance/executive compensation when a guy can sit by — or in Cayne’s case, play bridge and smoke doobies — while one of the financial world’s most revered institutions collapses under his watch — and still have enough left to spend $27 million on two condos.
Meanwhile, Mr. Schwartz had pulled his $4.5 million property off the market and is renting it out.
Thankfully, these guys aren’t out of the woods yet. They’ll likely spend years dealing with a slew of class-action lawsuits stemming from the collapse of the company they destroyed. As Gary Weiss recently reported, Bear Stearns is no stranger to lawsuits.
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Filed under: Management, Industry, Citigroup Inc. (C), Merrill Lynch (MER), Morgan Stanley (MS)
The board of directors of Morgan Stanley (NYSE: MS) has sent a letter to shareholders defending John Mack, the company’s chairman and CEO, and urging rejection of one shareholder proposal to push him out of the chairman’s job. According to MarketWatch, “The endorsement came in response to a letter earlier this month from CtW Investment Group, an organization representing several unions, calling on shareholders to withhold their votes from Mack.” The letter also suggested that two Morgan Stanley directors be pushed out.
Shareholders in the investment bank are understandably red with rage. Morgan Stanley’s stock has lost almost 50% of its value over the last year and, at one point, was down almost two-thirds. The brokerage has already fired its president, but some who have lost money do not think that is enough. The CEOs at Merrill Lynch (NYSE: MER) and Citigroup (NYSE: C) have already lost their jobs because their companies where so badly hurt by investments in subprime mortgage instruments.
Separating the CEO and chairman jobs at banks and brokerages is probably a good idea, especially if the chairman has the role of overseeing risk management. Boards seem to have been blind to the massive chances that financial companies took when they put substantial sums into volatile securities.
Mack should count himself lucky to keep his job at all. Remaining CEO and passing the chairman’s job to someone else to encourage a balance of power make sense and should be a model for other firms. Someone has to keep an eye on the risk profile of companies that have already lost billions of dollars.
Douglas A. McIntyre is an editor at 247wallst.com.
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Filed under: Management, Industry, Citigroup Inc. (C), Merrill Lynch (MER), Morgan Stanley (MS)
The board of directors of Morgan Stanley (NYSE: MS) has sent a letter to shareholders defending John Mack, the company’s chairman and CEO, and urging rejection of one shareholder proposal to push him out of the chairman’s job. According to MarketWatch, “The endorsement came in response to a letter earlier this month from CtW Investment Group, an organization representing several unions, calling on shareholders to withhold their votes from Mack.” The letter also suggested that two Morgan Stanley directors be pushed out.
Shareholders in the investment bank are understandably red with rage. Morgan Stanley’s stock has lost almost 50% of its value over the last year and, at one point, was down almost two-thirds. The brokerage has already fired its president, but some who have lost money do not think that is enough. The CEOs at Merrill Lynch (NYSE: MER) and Citigroup (NYSE: C) have already lost their jobs because their companies where so badly hurt by investments in subprime mortgage instruments.
Separating the CEO and chairman jobs at banks and brokerages is probably a good idea, especially if the chairman has the role of overseeing risk management. Boards seem to have been blind to the massive chances that financial companies took when they put substantial sums into volatile securities.
Mack should count himself lucky to keep his job at all. Remaining CEO and passing the chairman’s job to someone else to encourage a balance of power make sense and should be a model for other firms. Someone has to keep an eye on the risk profile of companies that have already lost billions of dollars.
Douglas A. McIntyre is an editor at 247wallst.com.
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Filed under: Earnings reports, Google (GOOG), Adobe Systems (ADBE), FedEx Corp (FDX), Goldman Sachs Group (GS), General Mills (GIS), Morgan Stanley (MS), NIKE, Inc’B’ (NKE), Lehman Br Holdings (LEH)
Here are some highlights from this past week’s earnings coverage from BloggingStocks:
Also, Google Inc. (NASDAQ: GOOG) is recession proof? Ted Allrich wonders if there are any safe stocks. Jim Cramer doesn’t expect much from tech stocks. And Aaron Katzman looks at the effect of rising grain prices.
Upcoming results to watch for include Walgreen Co. (NYSE: WAG), Tiffany & Co. (NYSE: TIF), Oracle Corp. (NASDAQ: ORCL), ConAgra (NYSE: CAG), and KB Home (NYSE: KBH).
Visit AOL Money & Finance for more earnings coverage.
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Filed under: Walt Disney (DIS)
This post is one of several on business heirs apparent. Let us know in the comments whether you think Colin Hanks can live up his father’s legacy, and be sure to check out the other heir apparent posts.
 I wonder if Tom Hanks ever stops to reflect on how lucky his career has been. I mean, I know this has been said before, but I still can’t get over the fact that one of the biggest celebrity thespians of our era first came to prominence on a goofy sitcom called Bosom Buddies. If it wasn’t for some species of divine intervention, Tom Hanks would have been just another deep footnote of the ’80s. Although some might consider Bachelor Party a classic — I’m not sure who that would be — Tom Hanks’ actual breakthrough role came in Disney’s (NYSE: DIS) Splash (here’s a bit of trivia for you: Splash was the first film released by Touchstone Pictures). Years later, he would go on to star in some of the most memorable movies of our time — Philadelphia, Forrest Gump, Apollo 13, and The Green Mile. Yep, we all know Mr. Tom Hanks.
But have you ever heard of his son, Colin? He was the product of Tom’s first marriage to a lady named Samantha Lewes (she unfortunately passed away in 2002). Colin Hanks may not be as famous as his dad, but, according to his page at IMDB, he is an actor in his own right, and has done a lot of television work — he’s worked on Numb3rs, The O.C., and he’s been on many episodes of the sci-fi show Roswell. And he’s not doing too shabby in the movie business. He’s appeared in King Kong, two other movies starring the one and only Jack Black, Orange County and Tenacious D in the Pick of Destiny, and the recent internet thriller Untraceable.
Continue reading Heir apparent: Colin Hanks, looking to make a splash
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Filed under: Earnings reports, Google (GOOG), Adobe Systems (ADBE), FedEx Corp (FDX), Goldman Sachs Group (GS), General Mills (GIS), Morgan Stanley (MS), NIKE, Inc’B’ (NKE), Lehman Br Holdings (LEH)
Here are some highlights from this past week’s earnings coverage from BloggingStocks:
Also, Google Inc. (NASDAQ: GOOG) is recession proof? Ted Allrich wonders if there are any safe stocks. Jim Cramer doesn’t expect much from tech stocks. And Aaron Katzman looks at the effect of rising grain prices.
Upcoming results to watch for include Walgreen Co. (NYSE: WAG), Tiffany & Co. (NYSE: TIF), Oracle Corp. (NASDAQ: ORCL), ConAgra (NYSE: CAG), and KB Home (NYSE: KBH).
Visit AOL Money & Finance for more earnings coverage.
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Filed under: Walt Disney (DIS)
This post is one of several on business heirs apparent. Let us know in the comments whether you think Colin Hanks can live up his father’s legacy, and be sure to check out the other heir apparent posts.
I wonder if Tom Hanks ever stops to reflect on how lucky his career has been. I mean, I know this has been said before, but I still can’t get over the fact that one of the biggest celebrity thespians of our era first came to prominence on a goofy sitcom called Bosom Buddies. If it wasn’t for some species of divine intervention, Tom Hanks would have been just another deep footnote of the ’80s. Although some might consider Bachelor Party a classic — I’m not sure who that would be — Tom Hanks’ actual breakthrough role came in Disney’s (NYSE: DIS) Splash (here’s a bit of trivia for you: Splash was the first film released by Touchstone Pictures). Years later, he would go on to star in some of the most memorable movies of our time — Philadelphia, Forrest Gump, Apollo 13, and The Green Mile. Yep, we all know Mr. Tom Hanks.
But have you ever heard of his son, Colin? He was the product of Tom’s first marriage to a lady named Samantha Lewes (she unfortunately passed away in 2002). Colin Hanks may not be as famous as his dad, but, according to his page at IMDB, he is an actor in his own right, and has done a lot of television work — he’s worked on Numb3rs, The O.C., and he’s been on many episodes of the sci-fi show Roswell. And he’s not doing too shabby in the movie business. He’s appeared in King Kong, two other movies starring the one and only Jack Black, Orange County and Tenacious D in the Pick of Destiny, and the recent internet thriller Untraceable.
Continue reading Heir apparent: Colin Hanks, looking to make a splash
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Filed under: Management, Applied Materials (AMAT)
The Wall Street Journal takes an amusing look at the results of SEC efforts to require more detailed and meaningful disclosure about executive pay. Referring to Applied Materials (NASDAQ: AMAT), the Journal reports that “this year, it expanded by 76% the word count of its proxy’s compensation section. In all, the compensation section contains 16,245 words — twice the length of the U.S. Constitution and its 27 Amendments — along with 10 formulas, 10 tables and 155 percent signs.”
The result is a document that’s incredibly confusing, full of formulas like this one:
Weighted Score = (Performance Measure 1 x Weight as Percentage) + (Performance Measure 2 x Weight as Percentage).
But in a way, we shouldn’t be surprised. Applied Materials has paid its executives millions in compensation, but its stock price is lower than it was in 2001!
The reason that such long pay disclosures are required is that there is no particularly reasonable way to explain why top executives were paid millions while shareholders lost money. To use the random walk analogy, it’s like trying to ask a drunk staggering around in a field why he’s walking in the path he’s walking. He’s drunk! It can’t possibly make sense.
If a company needs 16,245 words to explain why it paid its executives the amount it paid them, they’re most likely full of crap.
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Filed under: Management, Applied Materials (AMAT)
The Wall Street Journal takes an amusing look at the results of SEC efforts to require more detailed and meaningful disclosure about executive pay. Referring to Applied Materials (NASDAQ: AMAT), the Journal reports that “this year, it expanded by 76% the word count of its proxy’s compensation section. In all, the compensation section contains 16,245 words — twice the length of the U.S. Constitution and its 27 Amendments — along with 10 formulas, 10 tables and 155 percent signs.”
The result is a document that’s incredibly confusing, full of formulas like this one:
Weighted Score = (Performance Measure 1 x Weight as Percentage) + (Performance Measure 2 x Weight as Percentage).
But in a way, we shouldn’t be surprised. Applied Materials has paid its executives millions in compensation, but its stock price is lower than it was in 2001!
The reason that such long pay disclosures are required is that there is no particularly reasonable way to explain why top executives were paid millions while shareholders lost money. To use the random walk analogy, it’s like trying to ask a drunk staggering around in a field why he’s walking in the path he’s walking. He’s drunk! It can’t possibly make sense.
If a company needs 16,245 words to explain why it paid its executives the amount it paid them, they’re most likely full of crap.
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