When it comes to severance packages, we should all be so lucky to work for
. Or not work for Mattel, as the case may be.
Mattel's Leaders Pocket Plenty of Loans,
columnist Glenn Curtis reported that the toymaker remains overly generous when it comes to compensating executives, past and present.
Jill Barad received roughly $50 million last year when she was ousted as CEO. But that wasn't the worst of it. After Barad left the company, Curtis wrote, Mattel paid special "retention" bonuses totaling $705,000 to four other veeps. You know, just to keep them and make sure they were happy.
In addition, the company continues offering loans with amazing terms to members of its management team. For example, Chief Executive Robert Eckert borrowed $5.5 million last year -- and doesn't have to pay back a cent if he stays with Mattel through May 2003.
Curtis, the author of a new biweekly subscription newsletter called
Era of Value, wrote that investors should keep an eye on such moves.
"Sure, key personnel need to be retained, especially in a time of uncertainty. But ... investors should know exactly where management's loyalties lie -- because it doesn't look like they're with the common shareholder."
Burned by Asbestos
People working on Wall Street and in other neighborhoods near ground zero worry about the possibility of asbestos and
other toxic chemicals being released through smoke emanating from the site of the destroyed World Trade Center towers.
And after a jury last week awarded six plaintiffs $25 million apiece in a contamination-related suit, investors should be concerned about asbestos exposure, too.
Asbestos Verdict Tarnishes Halliburton's Future,
Contributing Editor Christopher Edmonds wrote that the verdict is likely to be a signal to attorneys that the probability of winning a jury trial is better than once believed.
Since 1976, Edmonds reported, Halliburton has received nearly 300,000 claims related to asbestos injuries, and has settled 171,000 of them at a cost of about $127 million. And while Halliburton has been able to cover most settlements through insurance proceeds, continued coverage becomes less certain if trials and verdicts increase.
One energy analyst suggested it would cost Halliburton the equivalent of $2 per share to settle all of the claims filed against it -- but that was before last week's colossal verdict in Mississippi against the energy services giant and two other companies,
, a former pipe-insulation contractor.
So how serious a threat to Halliburton is this? And what does the verdict mean to investors?
Bryan Dutt, a portfolio manager at energy-investment firm Ironman Capital, told Edmonds this: "It may be grossly unfair to Halliburton and other parties, but this is the kind of ruling that has led to the demise of companies. It's not fair, it's not right, but it is the way things can go."
Raytheon Is Misfiring
The defense industry is one of the few sectors going great guns during these turbulent times.
just won what may be the biggest defense contract in history, and
stock has soared 33% since Sept. 11.
Top Gun Raytheon Faces Collateral Damage, columnist Odette Galli warned investors to be wary of the company, whose stock has been pushed hard recently by sell-side analysts.
Galli acknowledged that Raytheon has a tremendous portfolio of missiles and advanced electronics, but said losses and debt accrued through its nondefense businesses will wipe out whatever cash is generated on the defense side. She noted, too, that Raytheon has already raised $1.26 billion this year, but is doing a second follow-on equity offering to strengthen its balance sheet and reduce debt.
Writes Galli: "Does Raytheon have the right products in a hot sector? Undoubtedly. But you won't see much, if any, free cash flow for a while. Earnings are certainly at risk ... and accounting issues remain a concern."
When it comes to getting defensive, Galli said
may be a safer bet.
Rest of the Best of RealMoney
You Want to Make Money, Let's Talk Fundamentals, Brett Messing reminded investors what matters when it comes to making money.
I don't want to spoil it for you, but Messing said earnings
matter and future profitability
. When it comes to the former, he loves
. When it comes to the latter, he hates
Wrote Messing: "No matter how low these guys place the bar, they still cannot jump over it. I love the site and service, but I hate the stock."
After being deluged with email, Cody Willard revisited seven telco stocks he has recommended recently in
Reviewing the Teleconomist's Portfolio.
The upshot is this: All seven of the companies he has highlighted are up, from marginally to nearly 54%. Willard said he continues to believe the firms are well positioned, and identified
as his favorites.