Fiorina's Soft Landing
1. Baby, You Can Drive My Carly
This week, Carly Fiorina demonstrated how far women have progressed in the executive suite.
They've gotten so far, she taught us, that they're just as likely as men to be rewarded for their incompetence.
Fiorina, of course, lost her job as chairman and CEO of Hewlett-Packard (HPQ) - Get Report Wednesday, amid growing dissatisfaction with her performance. H-P's stock is worth about half of what it was when Fiorina took control of the tech giant in 1999. Not only that, but the company's 2002 merger with Compaq -- a deal that Fiorina championed in a close and bitter proxy contest -- has failed to live up to Fiorina's promises for it.
But though Fiorina is no doubt bummed about being fired, the company did ease the pain for her. The departing executive will receive a severance package, according to press reports, worth $21 million.
Yes. Just like her male counterparts at other flailing giants, Fiorina was able to receive an outrageously generous severance package despite a job performance that was mediocre at best.
You've come a long way, baby.
2. The Good Times at the NYSE? They're Langone.
New York Stock Exchange's
scandalous overpayment of former CEO Dick Grasso claimed another victim this week: Wall Street elder statesman Kenneth Langone, who is resigning from
board, it was revealed Tuesday, to defend his role in the matter.
We're not surprised.
Granted, we're not certain, as New York Attorney General Eliot Spitzer alleges in a civil suit, that any legal responsibility for the debacle lies with Langone, who chaired the NYSE's compensation committee for four crucial years during Grasso's tenure. We'll leave that for judges and lawyers to decide.
But after reading the NYSE's newly public report on what went wrong with Grasso's pay, we come away flabbergasted at how Langone and other members of the exchange's board let Grasso's pay and benefits spin out of control.
A running theme of the report is that hardly any of the people responsible for approving Grasso's pay -- most of them uninformed and/or incurious -- had the slightest grip on minor or major details, such as Grasso's buildup of an embarrassingly large retirement package.
In the tragicomic tale, a few choice details stick out. NYSE human resources chief Frank Ashen, for example, told investigators that he didn't regularly provide to the compensation committee information about part of Grasso's retirement kitty growth because it was considered purely a "benefit," not "compensation."
Benefit, compensation, whatever. It's all money, right?
How Grasso Got Greener
Once the compensation committee realized how big Grasso's retirement kitty had become, they apparently tried to hide that fact from the rest of the NYSE board "in an effort to minimize conversation on the matter," reported one consultant.
And when, at an August 2003 meeting, the full board approved a $139.5 million retirement payout for Grasso, no one bothered to mention that Grasso would subsequently be due another $48 million. It wasn't necessarily a conscious omission on behalf of members of the compensation committee, however, since even several of them apparently didn't know about the money.
Given that most board members were captains of industry, the disengaged ignorance documented in the report is shocking.
If these people had been as clueless at their respective companies as they were at the NYSE, they wouldn't be on Wall Street. They'd be on Skid Row.
3. Voom With a View
Not that we're big fans of
, but even we at the research lab are feeling sorry for those guys.
The Long Island-based cable TV operator has emerged as a loud opponent of a proposal to build a football stadium on the west side of midtown Manhattan -- a project the company believes would encroach on the business of Cablevision's Madison Square Garden sports arena.
One thing we love about Cablevision: Over the years, like a steroid-pumped professional wrestler, the company has gleefully embraced the role of the villain in various public disputes.
So, as in earlier disputes with the Yankees and
, Cablevision has sparked a firestorm of public wrath. In recent days, for example, the Jets have targeted Cablevision shareholders with TV ads equating Cablevision's stadium opposition with its doomed effort to launch the Voom high-definition satellite service.
Well, Voom was a stupid idea. But to equate the millions that Cablevision may spend on self-defensive lobbying with the billion bucks the Jets allege Cablevision wasted on Voom is loopy.
Even loopier was the reaction to the surprise move Cablevision made last week to kill the stadium: The company offered to buy the stadium site from the city's cash-strapped Metropolitan Transportation Authority and build housing there instead.
How serious that offer is, we're not sure. But it did put New York Mayor Michael Bloomberg -- a guy who sees a stadium as a key element of the city's bid to host the 2012 Olympics -- in the odd position of suggesting the underfunded transit authority ignore this high bidder for its property.
Wow. After a year of watching Voom speed toward its inevitable demise, it's refreshing to witness a dispute in which Cablevision is the sensible party.
4. See You in Courtney
For some people, the turn-of-the-century stock bubble represents everything that could go wrong on Wall Street.
But you know what? We miss it.
The latest wave of go-go nostalgia washed over us Monday, following the
Securities and Exchange Commission's
announcement of fraud charges against investment adviser and TV talking head Courtney D. Smith.
Smith, the SEC alleges, publicly touted the shares of telemarketing/shopping-mall-kiosk/car rental company
from 1999 through 2001 in return for $1.1 million in cash and stock secretly paid him by the company's CEO.
Whatever the truth of the allegations -- his lawyer denies the charges -- we must thank Smith for giving us an excuse to wander back down memory lane.
The SEC complaint notes, for example, that Smith managed to get on
seven times over four months to tout GenesisIntermedia -- an average of once every 12 trading days -- spouting apparent nonsense such as how the company was ready to transform itself "from a marketing powerhouse to an Internet powerhouse."
This, about a company that in 1999, 2000 and the first nine months of 2001 lost $8 million, $34 million and $119 million, respectively.
Smith also got to go on
and recommended the company as his "Double Your Money Pick" -- twice.
, reports the SEC, Smith announced that GenesisIntermedia "would be the next
in the Internet space."
CMGI, to refresh your memory, was the Internet incubator company that went from a split-adjusted $2 in early 1998 all the way past $150 two years later.
These days, of course, CMGI is trading back around $2.
Again, kudos to Smith for reminding us that once upon a time, being compared to CMGI was considered a compliment. How are we ever going to explain that one to our grandkids?
5. The Softer Side of Wal-Mart
is supposed to be a people-friendly place, but, gosh, they send mixed messages.
Wal-Mart's Big Beef
The Wall Street Journal
reported Thursday, the company has come up with a memorable response to a unionization drive at one of its stores in Quebec: It's shutting it down.
"We have been unable to reach an agreement with the union that in our view would allow the store to operate efficiently and profitably," a Wal-Mart spokesman told the
Wal-Mart, of course, has long played whack-a-mole with unionization efforts. As the
reminds us, five years ago, a group of Wal-Mart butchers voted to unionize. Within weeks, Wal-Mart announced it would no longer employ any butchers anywhere, and would stock precut, prepackaged beef instead.
Recently, Wal-Mart flooded the airwaves with advertisements and public relations efforts designed to persuade folks how warm and fuzzy a place Wal-Mart is at which to shop and work.
But given the union news, along with past allegations of off-the-clock labor and underpaid cleaning crews, we're having a hard time persuading ourselves that Wal-Mart hasn't built its everyday low prices on the backs of everyday low compensation of its workforce.
But who are we to judge? To settle the issue, let's ask Wal-Mart customers buying steaks in Quebec.
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