U.S. oil billionaire’s divorce is no private affair 22 Mar 2013 Investors stripped half a billion from the value of Continental on news that founder and 68 pct owner Harold Hamm is getting divorced. That may not do the threat justice. Splitting the tycoon’s $11 bln fortune leaves Continental exposed to hefty stock sales or a feud at the top.
HP board needs to add an "r" to evolution 21 Mar 2013 After Chairman Ray Lane and two other directors squeaked back into office with less than 60 pct of the vote, a board colleague said the body would “evolve.” A more radical shake-up of both directors and strategy is called for. A new chairman open to a breakup would be a start.
Mining saga highlights pitfalls of Chinese M&A 21 Mar 2013 The $1.4 bln takeover of Australia’s Sundance is under pressure after the apparent arrest of its suitor’s chairman. Chinese bidders must grapple with demanding regulators, fickle financiers, and shifting patronage. For their targets, it’s a reminder to treat offers sceptically.
Besieged boards need updated defender-in-chief 19 Mar 2013 Over a long career, lawyer Martin Lipton has become synonymous on Wall Street with takeover defense. But with shareholder activism ascendant and often on target, his contrarian screeds sound dated. This week’s M&A confab in New Orleans could put them further to the test.
Shareholder ire outlasts recovering market 14 Mar 2013 Company owners are demanding a slew of reforms this proxy season despite near-record stock prices. Overpaid executives, entrenched directors and combination chairmen-CEOs vex them most. Directors, even at solid performers like Disney, would be wiser to listen than resist.
Activists bring oil execs back down to size 14 Mar 2013 First they claimed the scalp of Chesapeake boss Aubrey McClendon for egregiously abusing his position. Now dissenting shareholders have all but ousted SandRidge’s Tom Ward and forced Nabors to cut pay. These are welcome victories in a sector notorious for big, mollycoddled egos.
VW’s mega-profit hides risky governance weak spot 14 Mar 2013 The carmaker’s 25 bln euros of pre-tax earnings are the highest ever for a listed German company. Despite a dismal European car market, current prospects are bright. But in the long term, politically charged and family-dominated governance is a source of vulnerability.
Shareholders must remind lawyers who’s in charge 5 Mar 2013 Legal eagles are eyeing cases over company stock-plan violations after pouncing on say-on-pay votes and proxy disclosures. The new litigation supposedly benefits stockholders. But it seems more of a feast for lawyers. Big investors ought to call out the weaker suits.
Like it or not, U.S. Treasury needs a banker 4 Mar 2013 New Secretary Jack Lew is a budget and legislative whiz, but he lacks important financial nous. The revolving door with Wall Street may still rankle, especially with bailout critics, but hiring someone like Morgan Stanley CFO Ruth Porat as his deputy would help fill the gaps.
Travel budgets could spare U.S. boards legal bills 4 Mar 2013 Financial fraud is easily hidden abroad. That’s the trap Caterpillar fell into, and now it has snared directors of mining company Puda Coal. Judge Leo Strine recommends on-site visits. They’re not always necessary, but boards owe investors closer scrutiny of operations overseas.
Warren Buffett’s no-dividend policy on thin ice 4 Mar 2013 In his annual letter the Sage of Omaha defended his stance against cash payouts. But Berkshire Hathaway is underperforming and Buffett reckons it won’t match its glory days again. That’s likely to increase the chances of a dividend, whether from Buffett or his successor.
Tip bankers like waiters 1 Mar 2013 Forget Europe’s bonus caps for bankers. Why not put a ceiling on salaries and let clients reward good service, just as they do in restaurants? Banker pay could shrink to a more realistic level. After all, this is a business that likes to boast about serving its customers.
SEC goes where Chesapeake board feared to tread 1 Mar 2013 The watchdog has launched an investigation into the gas company’s disgraced CEO Aubrey McClendon. Shareholders suing the company will welcome the news. But Chesapeake’s directors should have set up a more impartial inquiry themselves. That oversight could prove costly.
Weak CEO the least of Groupon’s woes 1 Mar 2013 The troubled Internet daily deal firm has fired witty boss Andrew Mason. But with overseas operations a mess, coupons in decline and a controversial chairman calling the shots, the company has bigger problems. Few talented executives would fancy trying to turn things around.
New Standard set for governance best practice 28 Feb 2013 Do as you would be done by. And to that end Standard Life has published a comprehensive review of its corporate governance activities. Just as company boards need to be held to account, so too fund managers. All big asset managers should follow the example.
Companies need more lawyers on board 26 Feb 2013 Not so much the bill-by-the-hour variety, though they help cover bosses’ behinds. Rather, hiring attorneys as directors may cut risk, promote stability and boost value. Based on new research, investors should be glad that lawyers are turning up more often in U.S. boardrooms.
Apple’s halo loses shine in investor fight 25 Feb 2013 Greenlight Capital founder David Einhorn won a legal point, but better governance wasn’t his main objective. Apple and its lawyers come off amateurish. Calpers, despite worthy aims, looks careless. The SEC also missed a trick. The result is a distraction for shareholders.
Citi pay plan raises the bar, just not enough 22 Feb 2013 Shareholders forced the mega-bank to rethink its compensation scheme for top executives. New, more rigorous targets for boss Michael Corbat and others are overdue. One important performance metric, however, seems to keep expectations too low.
Apple owners don’t need consumer-like innovation 22 Feb 2013 Investor David Einhorn’s idea of creating new preference shares is essentially an idea he proposed last year, with some fresh packaging. The trouble is it lacks the simplicity that is Apple’s hallmark. And for shareholders it’s not obvious “iPrefs” will have iPhone-like appeal.
Miners’ boards need a tune-up for austerity era 21 Feb 2013 Of the four big miners to change CEOs recently, only BHP Billiton managed to do it smoothly. The bosses may have messed up, but company boards are not blameless. They need to do better as the commodity cycle enters a new - and more challenging - phase.