1. Remember the Neediest Executives!
Imagine you're in control of a company that, after years of defending the safety of one of its key products, decides to withdraw it from the market, citing safety concerns.
|Merck's Needy Cases Fund
Executive sweets from the makers of Vioxx
Imagine that your stock has dropped 38% as a result, erasing $39 billion from the company's market capitalization.
What do you do next?
Why, make sure your executives are well compensated in the event of a sale, of course!
At least that's what
(MRK - Get Report)
, the manufacturer of no-longer-sold pain reliever Vioxx, said it did this week.
filing Monday, Merck said it had adopted what's called a "Change in Control Separation Benefits Plan" for 230 top executives.
Should these executives be let go within two years of any merger or acquisition of Merck, the lucky folks would win up to three years' of salary, bonus and health care benefits, among other goodies.
No word on what goodies Merck's 63,000 other employees would receive.
Merck's board says it adopted the plan "in recognition of the importance to the Company and its shareholders of avoiding the distraction and loss of key management personnel that may occur in connection with rumored or actual fundamental corporate changes."
To which we respond, because it was key management personnel that got Merck into its latest mess, why is it important to shareholders to keep them around?
2. Meaner Than a Junkyard Fax
You know, we used to think of Canada, Our Friendly Neighbor to the North, simply as a place where we could invest in blue-chip stocks like
But that's changed. Now we think of Canada simply the next-best-thing to Switzerland, as far as banking privacy is concerned.
As we learned from
The Globe and Mail
last week, the Canadian Imperial Bank of Commerce -- better known as
-- has had an odd system in place for what to do with paperwork associated with transferring certain investments of certain customers.
It faxes a copy of those customers' sensitive personal information -- stuff like bank account numbers, home address and social insurance number -- to a junkyard owner in West Virginia.
Yes. Thanks to a phone number mixup, CIBC in 2001 started faxing copies of certain investment transfer requests to one Wade Peer in West Virginia, the
reported. The number of customers who suffered a privacy breach is unclear; CIBC acknowledges that 29 customers were affected, while Peer, according to the
, says he's received hundreds of misdirected CIBC faxes. (Peer's lawyer declined to speak with
or make her client available for comment.)
|Debits, Credits, Hubcaps
CIBC's Appalachian division
Peer has claimed CIBC has been unresponsive about fixing the problem, with errant faxes arriving as late as last week; CIBC, in turn, says Peer led it to believe the glitch had been fixed in 2002.
Either way, the mixup has been a major headache for CIBC. The bank ordered employees to cease internal transmissions of client information by fax. It has posted apologetic messages to customers on its Web site. Both Canada's Finance Minister and Privacy Commissioner have launched investigations.
We understand that many Canadians chafe at American arrogance and imperialism. And why shouldn't they chafe? Even a lowly American junkyard can bring a Canadian financial institution to its knees.