Xstrata pay compromise saves face but little else 27 Jun 2012 Mick Davis’s tweaked “retention” package may be enough of a sop to put pay on the back burner as the miner tries to save its Glencore merger. But it makes a muddle of incentives. Tying awards to previously unseen cost-cutting potential poses dangers. It’s still a poor scheme.
Wall Street defeated by Ivory Tower in Virginia 27 Jun 2012 The U. of Virginia’s president beat back an ouster supported by hedgie Paul Tudor Jones and a former Goldman Sachs exec. But victory may be pyrrhic. For Thomas Jefferson’s school to survive in a bleaker fiscal world, the paradigm shifts Teresa Sullivan resisted look unavoidable.
Murdoch all but erases discount he inflicted 26 Jun 2012 When the phone-hacking scandal struck News Corp and its shares last year, a Breakingviews calculator found the company trading in the market at about 30 pct less than its sum-of-the-parts value. Plans to spin off the publishing arm may complete an improbable run to close the gap.
Sandberg does neither herself nor women any favors 26 Jun 2012 Becoming the first female director at a prominent company like Facebook should be good for all. But joining a rubber-stamp board the CEO treats haughtily won’t help Sheryl Sandberg’s sterling reputation. Women should fight for representation where they can make a real difference.
Chesapeake leaves investors wondering what’s next 25 Jun 2012 The U.S. gas producer is feverishly trying to dispel a cowboy reputation, including by shaking up the board. But emails suggesting Chesapeake colluded to buy land on the cheap are a setback. With all that’s happened so far, it’s also hard to believe this scandal will be the last.
Icahn may owe Goldman, but the reverse is true too 21 Jun 2012 The banking titan is suing CVR Energy, an oil refiner the uppity billionaire just bought. Goldman defended CVR and alleges Icahn blocked payment of $18.5 mln of fees. Theirs is a classic Wall Street rivalry. Maybe Icahn reckons Goldman has made enough off his activism already.
Chesapeake gets short-term gravitas at the top 21 Jun 2012 At 73, former Conoco boss Archie Dunham can’t have plans to stick around and unseat Aubrey McClendon from the energy empire he has built. So investors are disappointed. But he does have his legacy to protect and the god-given heft to keep Chesapeake’s reckless founder in line.
Corporate earnings hopes are still too high 21 Jun 2012 Analysts are paring back profit forecasts as euro zone worries clog the wheels of global commerce. Yet history suggests that when earnings go into reverse, the shift is rarely gradual. Investors may still be expecting too much from companies, at least in the near term.
Quest board cleverly squeezes more out of MBO 20 Jun 2012 The software company’s directors were put on the defensive when boss Vincent Smith, who owns a third of the firm, teamed up with an LBO shop for a lowball bid. But offering new shares to Dell leveled the playing field and bagged shareholders a 12 pct higher offer.
UK exec pay reforms set sound standards 20 Jun 2012 Companies will have to put a single number on CEO pay, and shareholders will have the last say on remuneration policy. This isn’t government meddling, it is empowering owners to hold managers to account. Good bosses should welcome the changes, which could legitimise their awards.
Dimon double gives Congress wasteful distraction 19 Jun 2012 Lawmakers from both chambers spent a total of four hours grilling JPMorgan’s boss over a loss that never put taxpayers at risk. Congress should ensure banks are well supervised, but with a runaway deficit and anemic job and GDP growth, they have more pressing work to do.
Good thing Ackman sees J.C. Penney as long-term bet 19 Jun 2012 Because it’s a dog right now. The U.S. retailer’s president abruptly left after eight months - and with $15 mln for his bad work. J. C. Penney shares fell another 9 pct and now trade around where activist Bill Ackman first bought in. Bold turnarounds are tough in the public glare.
Lazard’s new investor isn’t passive by nature 19 Jun 2012 Nelson Peltz says his 5.1 pct stake in the Wall Street advisory shop is a bet on the current plan and management. It’s a coup to win over the uppity activist – Peltz was behind campaigns at Heinz and State Street. But CEO Ken Jacobs also probably doesn’t have much room for error.
Xstrata shareholders should say no 18 Jun 2012 The $45 mln three-year retention package to keep CEO Mick Davis at a merged Glencore-Xstrata is an insurance policy against the damage the company would suffer if he quit. But the premium is excessive. Investors should take a stand, even if that means losing the deal.
India’s Congress wins mock fight; now for real one 18 Jun 2012 The government outfoxed its tricky coalition partners to get Pranab Mukherjee, now finance minister, nominated for the ceremonial role of president. But Sonia Gandhi’s party needs to do more to fire up the economy. A strong replacement for Mukherjee would show the way.
Rajat Gupta goes down but insider trading may not 15 Jun 2012 Guilty verdicts against the former McKinsey boss and P&G director should scare the bejeezus out of corporate America and Wall Street. But until the rules on passing tips are more clearly defined and miscreants truly fear being caught, the case’s deterrence value will be limited.
Review: Groupon’s baby CEO grows up – to a point 15 Jun 2012 The daily deals website was the fastest company to achieve $1 bln in sales. Frank Sennett’s new book, “Groupon’s Biggest Deal Ever,” gives a blow-by-blow account of the startup’s rapid ascent. But investors looking for clues to Groupon’s sustainability may be disappointed.
Too big to fail anxiety fuels Jamie Dimon circus 13 Jun 2012 One thing binds the politicians, pundits, protesters and investors outraged by the $2 bln loss of a well-capitalized, profitable private company. Nobody believes taxpayers are really off the hook for Wall Street’s failures. The real casualty of the debate is the Dodd-Frank Act.
Lazard’s newest director reveals dearth of choice 13 Jun 2012 The investment bank just put Dick Parsons on its board, six years after railing against his leadership at Time Warner as part of a Carl Icahn campaign. Lazard may have been talking its client’s book at the time. But finding unimpeachable directors must be proving quite tough.
Memo to Sorrell: think like an owner 13 Jun 2012 Almost 60 pct of WPP shareholders voted against the pay of the ad group’s CEO. If Martin Sorrell thinks like an owner, as he claims, he should take the hint and take a cut. He could well end up ahead. Pleased investors might then push up the value of his own WPP holding.