Herbalife: the ultimate financial plaything 15 Feb 2013 Carl Icahn is joining Bill Ackman and Dan Loeb in the war over the nutritional supplements seller. One idea of his is another Herbalife buyout. The controversial business model and rich cash flow make it easy for Wall Street to keep imprinting fresh narratives on the company.
Bumi shareholders should back incumbent board 13 Feb 2013 Competing plans to salvage value at the coal miner both have serious flaws. But current management, rather than Nat Rothschild, is best placed to achieve an all-important split with Indonesia’s Bakrie family. Once assured by a promised break fee, investors should offer support.
Loyalty dividends offer antidote to short-termism 12 Feb 2013 The EU is mulling plans to combat short-termism among institutional investors. One idea, to give shareholders variable voting rights, could create harmful inequalities and governance headaches. But rewarding loyalty through higher dividends is sensible and fair.
SandRidge board needs more reasons, fewer excuses 11 Feb 2013 Activist fund TPG-Axon wants to replace directors. A response that’s big on scare tactics doesn’t cut the mustard. One rebuttal - that such an overthrow could trigger a $97 mln payout to the CEO - only betrays the board’s weak governance record. Shareholders deserve better.
Peugeot’s writedown shocker isn’t end of trouble 8 Feb 2013 The struggling French carmaker is slashing the book value of its plants by more than 4 bln euros. This is partly due to new accounting guidelines, but the company’s outlook remains bleak. If its turnaround doesn’t materialise, the family group may soon need a bailout.
Apple and Einhorn could both use cleaner design 7 Feb 2013 The iPhone maker has combined three governance fixes better considered separately by shareholders. Also a bit unwieldy is an idea to unlock the value of the company’s cash that has led the hedge fund boss to try to block the changes. Both would gain from Apple’s famed simplicity.
Corporate governance: EADS 1 – France 0 6 Feb 2013 The French government couldn’t appoint its preferred candidate, Anne Lauvergeon, to the Airbus maker’s top spot. Instead, former Thales CEO Denis Ranque will get the job. EADS reformed governance after its failed merger with BAE. The new system seems to be working.
Chesapeake may have shot itself in foot on CEO pay 6 Feb 2013 Departing boss Aubrey McClendon is getting a $47 mln golden handshake. But the under-fire executive is retiring. That should allow the gas driller to claw back up to $30 mln rather than lavishing more largesse on McClendon. That gives investors a good case to sue.
Murdoch and Malone make better allies than rivals 5 Feb 2013 The media moguls are squaring off again. John Malone’s Liberty Global wants to buy Britain’s Virgin Media - a rival to the Rupert Murdoch-backed BSkyB. But the two UK companies complement each other. Collaboration would work in their favour, leaving third player BT as the loser.
Dell’s $24 bln LBO involves a club of one 5 Feb 2013 And Silver Lake, the sole private equity firm included, isn’t even really the club. Michael Dell is contributing his 14 pct stake in the PC maker, cash and an investment from his MSD Capital. Time was mega-deals needed a team of buyers. For now, they remain more exclusive.
Unlocking salary secrets could pay extra bonuses 4 Feb 2013 A new proposal in the U.S. Congress would allow employees to reveal their compensation freely. Though the aim is to curb gender discrimination, the effects are likely to be much more far-reaching. Such information should improve labor market efficiency and reduce inequality.
Chesapeake CEO exit puts energy bad boys on notice 30 Jan 2013 Aubrey McClendon’s abuse of shareholders has finally cost him his job. Defenders claimed he was vital to the gas driller’s future. But the oil company’s stock is already rallying. Fellow Wild West chiefs like SandRidge’s Tom Ward and Hess’s John Hess now look on borrowed time.
Wall Street minnow gets whale-size bonus 29 Jan 2013 Jefferies is paying CEO Richard Handler $19 mln for 2012, a 36 pct increase. That matches the firm’s share price gain last year. But it’s also a whopping 6 pct of earnings - excluding an even bigger retention deal. The same multiple would net JPMorgan boss Jamie Dimon $1.2 bln.
Ackman vs Icahn is an epic but pointless battle 25 Jan 2013 A personal feud between the two New York billionaires has erupted anew. Though it’s emblematic of their approach to investing and escapist fun for financiers, the two men play important roles in the markets. Their aggressions are better directed at supine boards than each other.
No-retreat strategy may backfire on SandRidge CEO 25 Jan 2013 Rebel investors want the oil chief’s head over his financial excesses and conflicts of interest. So Tom Ward resorted to new rules making it harder to remove him. Offering governance concessions, as fellow bad boy McClendon did at Chesapeake, would be a surer way of surviving.
Wall Street finds new way to put investors second 24 Jan 2013 Banks may finally be bowing to pay pressure, but they’re still shirking shareholders. JPMorgan wants to stop them from voting on a breakup while Goldman Sachs wants a chairman/CEO split off the ballot. It sounds like these supposedly master sellers are afraid they can’t close.
Corporate surgery may be in order at Novartis 23 Jan 2013 The Swiss pharma giant has hired back an old hand to replace veteran Chairman Daniel Vasella. That implies continuity, not change, at Europe’s second-biggest drugmaker. Still, new chair Joerg Reinhardt might ask whether the sprawling group needs to do fewer things better.
Siemens needs corporate governance overhaul 22 Jan 2013 Shareholders of the German group will give short shrift to corporate principles when they re-elect Gerhard Cromme as chairman. Rules had to be changed to allow the man who also chairs ThyssenKrupp to run again. But Siemens badly needs fresh faces to cope with its many challenges.
JPMorgan flaws should ring alarms everywhere 18 Jan 2013 The huge U.S. bank is supposed to be among the top risk managers. If the conflicting mandates, discredited theory, inadequate checks and primitive technology behind its $6.2 bln trading losses in 2012 are really as good as it gets, plenty of regulators and investors should worry.
Lloyds should change CEO bonus vesting, not size 18 Jan 2013 A storm is brewing over Antonio Horta-Osorio’s bonus. Like banking peers, Lloyds was shamed in 2012 for past mis-selling of mortgage insurance. Yet there was progress in restructuring and the boss deserves any payout due. To become palatable, the award could be deferred not cut.