It is proxy season and as public companies put out the lists of compensations for their CEOs it is plain that the recession did not damage chief executive pay packages in most cases.
New research shows that the recession was unkind to some CEOs who have recently lost their jobs as part of an epidemic of firings. Employment consulting firm Challenger, Gray & Christmas said that 132 CEOs lost their jobs in February. The figure is a 17-month high and 89% higher than the number for January
KB Home (NYSE: KBH) is losing a very prestigious name on its Board of Directors. The company just announced that Ron Burkle will not stand for re-election to KB’s Board of Directors at the next annual meeting of stockholders. That meeting is being held on April 1, 2010. It’s no April Fool’s Day.
Women make up over 50% of the US workforce now, but the Bureau of the Census shows that women make, on average, only 77% of what men do based on measurements of annual salaries.
24/7 Wall St. looked at research about the Fortune 500 to find the worst places for women to work. The data used is from Catalyst, a non-profit organization which works to promote the status of women in business. Our analysis compared the Fortune 500 women who are executive officers as defined by the SEC to data on the number of female members of boards of directors at the same universe of companies. This is the first time these two lists have been cross-referenced for a public analysis.
There is one headline about management that almost always brings up concerns from the financial community….. CFO Resignations. GameStop Corp. (NYSE: GME) is paying a price this morning because CFO Catherine Smith left the company. To make matters worse, she only joined GameStop late in 2009. Smith took a job with Wal-Mart Stores Inc. (NYSE: WMT) in the Walmart International operations. When CFOs resign and already have a job lined up it is usually less of a concern than when CFOs resign for personal reasons or due to fundamental disagreements. In the case of GameStop, the news implications here might not just be that the added bad news is a ‘one and done’ scenario.
Yahoo! Inc. (NASDAQ: YHOO) holders probably never want to hear the name Jerry Yang again. Well, those same holders will love this… Tonight after the close a filing at the SEC from Yahoo! showed that Jerry Yang is going to be selling stock in the company. David Filo, the other Yahoo founder, is also selling shares. Normally insider selling or founders selling is viewed with some caution. That doesn’t seem to be the case here, and for good reason.
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Things just still are not going well at SAP AG (NYSE: SAP). Its CEO Leo Apotheker has stepped down as the company reached an agreement with him not to renew his contract. The problem is that this departure was only after about 7 months, and it comes at a time when most technology giants are talking up a return of enterprise spending. As a result of today’s management action, the company is going back to a co-CEO structure.
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Vonage Holdings Corporation (NYSE: VG) just disclosed in an SEC filing something that many investors do not like to see, even if it is in small stocks. The company noted, “John Rego, Executive Vice President, Chief Financial Officer and Treasurer of Vonage Holdings Corp., will be leaving the company later this year.”
John Thain, former co-president of Goldman Sachs (NYSE:GS) and CEO of The New York Stock Exchange and Merrill Lynch, who was virtually shamed into retirement after Merrill was bought by Bank of America (NYSE:BAC), may become head of CIT (NYSE:CIT). CIT nearly collapsed last year. It is the largest single private lender to small businesses in the United States.
Several media reports say that Thain could take the top job at CIT, which moved out of Chapter 11 recently and has struggled to become a viable lender again, almost immediately. The fact that CIT will turn to Thain is a sign it has not turned around at all. To make believers out of Wall St. and CIT clients, it has to do better.
Douglas A. McIntyre
There are many companies that deserved to be on this weekend’s slate of unusual suspects that have key current developments to watch in this coming week. Some are unusual trading activity, some are earnings related, and some are event related. This week’s unusual suspects are Alcoa, Inc. (NYSE: AA), Intel Corporation (NASDAQ: INTC), J.P. Morgan Chase & Co. (NYSE: JPM), Berkshire Hathaway Inc. (NYSE: BRK-A), Cyclacel Pharmaceuticals, Inc. (NASDAQ: CYCC), Genzyme Corp. (NASDAQ: GENZ), Immunomedics Inc. (NASDAQ: IMMU), MannKind Corp. (NASDAQ: MNKD), QUALCOMM Inc. (NASDAQ: QCOM), and Stillwater Mining Co. (NYSE: SWC).
The number of biotech stocks on the list this weekend is one more of coincidence than one of design. We have compiled detailed explanations on each stock story below with an outlook of what to watch for in the coming trading days.
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American International Group, Inc. (NYSE: AIG) has done what it could to keep top talent around at the company, and it has been able to get at least some exceptions on the restriction of pay that is being imposed on the firm because of it receiving extraordinary government support. Late on Wednesday came word that Anastasia Kelly, Vice Chairman for Legal, Human Resources, Corporate Affairs, and Corporate Communications, has formally resigned from the company. Ms. Kelly joined AIG in September 2006 as General Counsel. That is also not the only loss announced, and it is likely to not be the last. This may also signal more risk to the billions and billions of dollars the company has received from taxpayers.
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Stephen Burke, the 51-year-old president of Comcast (NASDAQ:CMCSA), has to be the new lead choice to become CEO of Berkshire Hathaway (NYSE:BRK.A) when Warren Buffett retires or dies.
Burke was added to the Berkshire board. He is one of the most visible corporate executives in America because of his role at Comcast, the nation’s largest cable company. He will never become head of Comcast because Brian Roberts, son of the cable company’s founder and its CEO, is Burke’s age. Read More
Microsoft’s (NASDAQ:MSFT) departing CFO Chris Liddell will join GM as Vice Chairman and CFO, according to several media reports. GM is so badly damaged that the move could not even be viewed as an improvement compared to his current job at the world’s largest software company. Liddell was well-regarded by Wall St.
The reason Liddell is moving may be that he was promised the CEO job at GM, or at least as been told the job is his to lose. Ed Whitacre, former AT&T CEO, is acting as GM’s chairman and chief executive but has told employees and the government that he will quickly find a new chief.
Liddell can join the list of GM executives and board members who know nothing about running a car company.
Douglas A. McIntyre
E*TRADE Financial Corporation (NASDAQ: ETFC) has some good news this morning, although this could actually be bad news for those hoping for an immediate takeover. The company has been without an heir apparent in the CEO role until this morning. The online brokerage firm has named board member Robert Druskin as Chairman and as Interim CEO effective as of December 31, 2009. Druskin is well-known in the financial sector and is in his early 60’s, and this has both good and bad implications for the stock depending on how you look at E*TRADE as a prospective investment.
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Bank of America Corporation (NYSE: BAC) is still well under 100 hours of announcing that Brian Moynihan would replace Ken Lewis as CEO of the largest US bank by domestic deposits. CNBC’s Maria Bartoromo just got a sit down interview with Brian Moynihan and asked the question everyone wanted to know about acquisitions versus divestitures.
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Citigroup’s (NYSE:C) announcement that it will pay back its TARP funds was not enough news for the day from the banking sector.
Bank of America (NYSE:BAC) will not hire Robert Kelly current CEO of Bank of New York Mellon (NYSE:BK) He does not want Ken Lewis’s job.
Wells Fargo (NYSE:WFC) has disclosed that it will pay its $25 billion TARP obligation.
Douglas A. McIntyre
Bank of America Corporation (NYSE: BAC) will soon be out of the TARP. The report was first out by CNBC’s Charlie Gasparino right after 5 PM that Bank of America is about to do a large capital raise to exit out of the TARP. Then the Wall Street Journal reported that Bank of America will be exiting the TARP. Its figure for a capital raise is $20 billion in new capital. It is also reported that Greg Curl may become interim-CEO.
Bank of America has now issued a press release noting that Bank of America will repay the entire $45 billion in TARP to U.S. taxpayers. The bank will ask holders to approve an increase in shares and will use $26.2 billion in excess liquidity in the repayment here. Asset sales are to be approved by the Federal Reserve ($4 billion approximately). It plans about $18.8 billion in proceeds from common equity equivalent securities sales and about $1.7 billion through restricted stock issuance.
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General Motors may be looking more like Government Motors every day. Fritz Henderson is stepping down according to a report from CNBC’s Phil Lebeau, citing sources. What is not clear is if Henderson was asked or told to resign in the symbolic falling-on-the-sword maneuver or if Henderson just couldn’t take running the company under the constraints with the government being involved in every decision.
Of course several things have not gone as planned under Henderson’s watch with falling unit sales. Either way, this is another blow for the government’s “oversight and pay shouldn’t matter” stance it has when running giant corporations. American International Group, Inc. (NYSE: AIG) CEO shuffling may only now be working for the government, after Benmosche fought back after taking over from Ed Liddy after he threw in the towel. And Bank of America Corporation (NYSE: BAC) hasn’t exactly had every qualified CEO beg to take over the CEO role there held by Ken Lewis on an interim basis.
A press conference with “major changes” is scheduled this afternoon, so more details should follow. The saga continues….
JON C. OGG
Silicon Storage Technology, Inc. (NASDAQ: SSTI) is trading up on a private equity and management-led buyout. SST is flash memory maker based in Sunnyvale, California. While the company has entered into a definitive merger agreement to be acquired for $2.10 per share, it is almost impossible not to wonder (at best) if this price is a fair value to the Silicon Storage shareholders who would be getting cashed out if a majority approves the deal.
First off, the company is being acquired by Prophet Equity LP’s Technology Resource Holdings, Inc. as well as by members of Silicon Storage’s management team. The $2.10 price is also only a 13% premium to yesterday’s close. It seems some believe that the private equity and management-led buyout will have to pony up more. Shares are above the buyout price.
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SIRIUS XM Radio (NASDAQ: SIRI) announced that Gary Parsons has resigned as Chairman of the Board of Directors. The satellite radio giant has appointed Eddy Hartenstein, an independent director, to serve as non-executive chairman. An excerpt from Parsons’ farewell note was:
Jon Corzine recently lost the gubernatorial race in New Jersey. He is also a very wealthy Wall Streeter that is a former disciple of Goldman Sachs Group Inc. (NYSE: GS). He is also a democrat that is very friendly with the Obama administration. And now the strange rumor mill is getting stranger….
Charlie Gasparino on CNBC just threw out the idea that Corzine could potentially be in the running for the CEO role at Bank of America Corp. (NYSE: BAC) as the replacement for Ken Lewis….. after he touted his book again. Gasparino noted that he asked Bank of America about this and the ‘rumor’ was not denied but was given a ‘no comment’ answer which Gasparino expanded upon.
In this new world under the ‘new normal’ it seems that anything is possible.
JON C. OGG
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