Zac Bissonnette
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Kenneth Feinberg Tries Desperately to Stay Relevant
If you were to calculate a headlines/efficacy ratio for government and corporate leaders, executive pay czar Kenneth Feinberg would have to rank pretty high on the "most press for least accomplished" list.
Now that Bank of America (BAC) and Citigroup (C) are out from the somewhat watchful eye of Mr. Feinberg, he has only American International Group (AIG), the car companies, and GMAC to meddle with at little benefit to anyone.
So what does he do to keep himself occupied? He chats on the phone with Goldman Sachs (GS) CEO Lloyd Blankfein about how that company can better align pay for its executives, even though he has no authority over -- or interest in -- that company's policies.
Now that Bank of America (BAC) and Citigroup (C) are out from the somewhat watchful eye of Mr. Feinberg, he has only American International Group (AIG), the car companies, and GMAC to meddle with at little benefit to anyone.
So what does he do to keep himself occupied? He chats on the phone with Goldman Sachs (GS) CEO Lloyd Blankfein about how that company can better align pay for its executives, even though he has no authority over -- or interest in -- that company's policies.
Continue reading Kenneth Feinberg Tries Desperately to Stay Relevant
Magazine Sales Are In: 'Real Simple' Is Big Winner, 'Good Housekeeping' Is Biggest Loser
The Audit Bureau of Circulations reported today that newstand circulation for magazines fell 9.1% in the second half of 2009. Overall circulation -- including subscriptions -- fell too, but newstand circulation is a better indicator of the health of the industry because it is a more timely reactor to economics changes, and many magazines have kept their circulation up with deep subscription discounting. For instance, a one-year subscription to Glamour is being offered for just $7 on Amazon.com. Interestingly, the two-year rate is $14.97, a reversal of the usual "commit to 2-years and get a lower per-issue price" deal that publishers offer. That may be a sign of optimism on the part of the industry, suggesting a belief that greater pricing power will return as the economy improves.Treasury Does Not Have the Authority to Allow Ken Lewis to Violate Securities Laws
Defenders of former Bank of America (BAC) CEO Ken Lewis, who is now being charged with civil fraud by New York Attorney General Andrew Cuomo, are quick to point out that Lewis may have been pressured not to reveal massive losses to shareholders by regulators -- namely Ben Bernanke and Hank Paulson.Continue reading Treasury Does Not Have the Authority to Allow Ken Lewis to Violate Securities Laws
Borders' New CEO Gets Pay Bump
Last week, Borders Group Inc. (BGP) announced that CEO Ron Marshall was resigning as CEO, effective immediately, to go run A&P.Executive Vice President and Chief Merchandising Officer Michael J. Edwards was promoted to CEO in the wake of poor results and rumors of a possible bankruptcy on the horizon. On Wednesday, the company's stock got a nice boost when Bill Ackman -- a major shareholder and major creditor of the company -- suggested that he would not push the company into bankruptcy.
Continue reading Borders' New CEO Gets Pay Bump
Former Lehman Executive Calls for Ouster of High School Teacher
The following story is overflowing with irony. The reason is partly because of one man's lack of irony: Hugh "Skip" McGee, the former head of investment banking at Lehman Brothers, sent a five-page screed to the board of trustees at his son's private Texas high school after a teacher referred to bankers as "sleazeballs". DealBreaker has published the letter in its entirety. If you have a lot of time on your hands, read and look for Skip's complaints about the lack of cross-dressing at the pep rally, among other things.His demands? The teacher, the upper school principal, and the headmaster should all resign over the injustice. That's right: a former executive at Lehman Bros. is demanding accountability.
Continue reading Former Lehman Executive Calls for Ouster of High School Teacher
The Toyota Conspiracy?
The USA Today's DriveOn blog considers the possibility of what would appear to be the mother of all conspiracies: "Are the Obama administration and Rust Belt members of Congress taking political advantage of Toyota to bolster the fortunes of Detroit automakers?"The blog post continues:
The unprecedented move to keep Toyota from selling models under recall could ve (sic) viewed as economic punishment, rather than consumer protection. Neither LaHood nor Toyota think that owners of cars covered by the recall should stop driving them. The cars may be too potentially dangerous to be sold, but they are fine to drive as long as you're aware of telltale warning signs that they may try to roar off on their own. Imagine a drug recall where the government stops sales in stores, but doesn't tell people to throw away the bottles in their medicine cabinets.
Continue reading The Toyota Conspiracy?
Upper Deck Settles Yu-Gi-Oh! Lawsuit
One of the more bizarre cases of corporate espionage and theft of intellectual property has come to an end, with trading card manufacturer Upper Deck settling a lawsuit filed against it by Konami, admitting to counterfeiting Yu-Gi-Oh! cards.
Konami, which owns the rights to the Yu-Gi-Oh! brand, sued Upper Deck last year, accusing the company of illicitly manufacturing and distributing over 600,000 trading cards. Upper Deck executives, including the company's CEO, invoked their 5th Amendment right against self-incrimination in court, and Konami was seeking damages of between $50 million and $150 million.
Continue reading Upper Deck Settles Yu-Gi-Oh! Lawsuit
Movie Gallery Prepares Yet Another Bankruptcy Filing
Shares of Netflix, Inc. (NFLX) jumped more than 20% Thursday after the company posted strong quarterly earnings and an impressive outlook.Meanwhile, Movie Gallery is preparing to file for bankruptcy. Again.
The Wall Street Journal reports (subscription required) that this latest restructuring could come next week, and involve the closure of two-thirds of the company's 1,800 locations. The company will seek to swap a significant amount of its $600 million debt load for equity, wiping out the current equity stakes held by Sopris Capital Advisors LLC and Aspen Advisors LLC.
Continue reading Movie Gallery Prepares Yet Another Bankruptcy Filing
Borders CEO Ditches Books for Groceries
Shares of Borders Group (BGP) tumbled yesterday after the company announced that CEO Ron Marshall was resigning, effective immediately, to become CEO of Great Atlantic & Pacific Tea Company (GAP), the parent company of the perpetually struggling A&P chain of grocery stores.Executive Vice President and Chief Merchandising Officer Michael J. Edwards will step in as interim CEO.
Continue reading Borders CEO Ditches Books for Groceries
Will Fashion Lead Magazines out of the Recession?
It's been a long time since there's been any good news for the print media, but this is a start: ad pages at leading fashion magazines are significantly year over year. InStyle pulled off an incredible 33.5% jump in year over year ad pages for its March issue, and Vogue eked out a 0.6% increase. Harper's Bazaar was up 4.4%. Elle was up 4%. The big laggard was W, which saw its ad count fall 23.4%.
Continue reading Will Fashion Lead Magazines out of the Recession?
GM Returns to Its Roots: Lousy Corporate Governance
The New York Times reports that "General Motors ended its search for a chief executive on Monday by naming Edward E. Whitacre Jr., its chairman and interim chief, to the job permanently, a person with knowledge of the decision said Monday."And with that, GM's chairman will now be the company's permanent CEO. None of this is to cast stones at Whitacre's ethics or competence, or the work he's done at GM so far, but here's the truth: it is a pretty universally held principle of corporate governance that separating the chairmanship from the CEO is a good idea.
Continue reading GM Returns to Its Roots: Lousy Corporate Governance
Geithner Is 'On the Outs' with Obama, Photo Says?
The New York Post reports that Geithner is "on the outs" with Obama. After examining a recently taken AP photograph, the paper noted: "Judging from Treasure Secretary Tim Geithner's position (third to the left of Obama), he looks to be on the outs after reportedly bumping heads with the president over his plan to fix Wall Street."An indication of just how rampant the speculation about Tim Geithner's fate as Treasury Secretary has gotten, his standing to the left of Paul Volcker and Barney Frank during a press conference is now cause for concern about his fate. The Post helpfully notes that "Customarily, Geithner has been at Obama's side whenever the president discussed topics related to Wall Street."
Continue reading Geithner Is 'On the Outs' with Obama, Photo Says?
More SEC Incompetence: Warnings of Moody's Fraud Ignored
Another week, another tale of gross incompetence, bureaucratic bumbling, stupidity, laziness, and arrogance at the SEC.This time, it comes from Eric Kolchinsky, an executive at Moody's, who called the SEC in September to warn the agency that his company might be committing securities fraud. Ya know, the kind of the thing you'd think the SEC would be interested.
Continue reading More SEC Incompetence: Warnings of Moody's Fraud Ignored
Barbados Bails Out Four Seasons Project
The government of Barbados agreed last month to guarantee a $60 million loan to re-start construction of a Four Seasons high-end development. In exchange for the loan guarantee, the government will take a 20% stake in the project.A $60 million loan guarantee doesn't sound like much -- but for a country as tiny as Barbados, it's significant. Barbados has a GDP of $3.41 billion, compared with $14.2 trillion for the United States. So, relative to GDP, this is the equivalent of the United States government offering a $249.8 billion loan guarantee.
Can you imagine the populist outrage that would ensue if President Obama announced that the government was providing a $249.8 billion loan guarantee for a resort.
Continue reading Barbados Bails Out Four Seasons Project
John Bogle Lashes Out at Institutional Investors
Vanguard Group founder John Bogle may be 80 years old, but the crusader for individual investors is still going strong, continuing to lash out at the lazy, incompetent, and conflicted institutional money managers who have failed in their fiduciary responsibilities to their investors.In a brilliant op-ed piece in the Wall Street Journal, Bogle writes that "... far too many of our corporate and financial agents have failed to honor the interests of their principals -- the mutual fund investors and pension beneficiaries to whom they owed a fiduciary duty. The ramifications were widespread -- for the failure of money managers to observe the principles of fiduciary duty played a major role in allowing our corporate managers to place their own interests ahead of the interests of their shareholders."
Continue reading John Bogle Lashes Out at Institutional Investors
Chasing Value: Hasbro Earnings Makes My Point
MEMC CEO Forgoes Bonus; Money Will Go to Retrain Workers
Commodities, Markets Turn Higher on Rumors of Greek Bailout
