meek-investor

If you behave like this, you deserve to be cursed, reviled, and generally hated. Unfortunately many business leaders are exactly like this, which is why a business tycoon is considered by society as a figure to be loathed. The "this" I refer to is Stephen Elop, Chairman of Nokia being entitled to a $25m payout for the the sale of Nokia's handset business to Microsoft. Nokia, as everybody knows, has been in dire straits for quite some time. In 2010, the Board fired its existing Finnish leaders and brought Stephen Elop, from Microsoft, as the CEO to "rescue" Nokia. Elop abandoned Nokia's operating system Symbian and tied its fortunes to Microsoft by adopting the Windows platform. It did not work and Nokia has continued to slide. During Mr Elop's tenure, Nokia's market capitalisation fell  by $ 14 bn - that's the amount Nokia's shareholders have lost. Finally Nokia has decided to sell its handest business to Microsoft for under $ 10 bn. Elop...

The Church of England has taken a line on executive pay. You may ask what has that body got to do with the world of business. Well , there is the small matter that the Church manages a £ 5.3 bn portfolio and is a shareholder in many companies. And, of course, it is a voice of morality, however much you may agree or disagree with it. The Church of England has said that it will not vote in favour of executive pay proposals that have bonuses more than 4 times the salary. While its influence as a shareholder might be somewhat limited, its voice has the benefit of a moral argument. Just a little while ago shareholders in HSBC voted to limit bonuses to a maximum of 10 times annual pay. Readers may pause here to consider the obvious question. Who on earth earns bonuses many times his salary ? This blogger has seen a lot in business. Outside of the financial services industry,  there is virtually no place where an employee can earn 10 times his salary as a bonus. So what's so special ab...

You normally associate business leaders with high intellect, sound judgment, and in general, greater ability than many of us, mere mortals. Then I read this front page report in today's Guardian in the UK. I had promised to myself that I'd stop writing about either bankers or Goldman Sachs after my last two posts on the subject. But what can you do when somebody makes a speech like that. And where does he chose to make these remarks ? In St Paul's cathedral, no less. If you know of any greater act of appalling judgement, please let me know.

Every year, the second leg of the soap opera (see previous post for the first leg), is the drama over the increase in remuneration for the employees. If there is one person, everybody in the company loves to hate, it’s the guy or gal titled “Remuneration Manager”. Many years ago we had a worthy in the company I worked in. It was widely known that he had AIDS (now that was the time when AIDS first surfaced – OK OK I know it was a long time ago). The “news” caught on like wildfire. It became so widely known that the originator of the rumour had to issue a clarification that he meant Annual Increment Deficiency Syndrome ! Some very involved research study is done and the recommendation is made that the average increase should be 3.97%. This goes through at least 27 layers of approval. If it’s a foreign company, it goes right upto the HQ , wherever it is in cuckoo land. Imagine some firang/waiguoren, who can’t point out your country on a map, deciding the rem of Miss Rajalakshmi / Wang Xia...

It is human to forget about your health when you are healthy. You are young and fighting fit and who wants to think of sickness and hospitals ? May you be blessed to remain that way always. But just in case ….. Its a feature of our times that, God willing, we’ll all live longer. But as we live longer, a variety of old age diseases and disabilities will become inevitable. Medical costs can be one of the biggest liabilities of the future and it is only prudent that we provide for it. This post argues that employer provided insurance is the worst system that can be. It’s a dinosaur that should be quickly made extinct. Here’s why . In the good old days, when you joined a company and you retired from it, the employer providing medical cover was a great idea. The employer even provided for cover after your retirement. Perfect. And then came Armageddon. Just look at what happened to General Motors. This stone age practice has continued. Employers still provide medical cover in countries where...

Tom Peters is a legend in the business world. He's such a legend that this doesn't even have to be said. But that doesn’t make him always right. Occasionally, he can be wrong, for he is after all, human. In this instance, I think he is dead wrong. I refer to his blog post – “I do not wish you harm” . He rails and rants against Robert Diamond, the President of Barclays plc for his “earning” $36.5m consequent to the purchase of Barclays money management business by Blackrock . He objects to the grin on Diamond’s face calling it “appalling – insensitive – stupefying – outrageous – disgusting - sickening in June 2009”. He seems to be objecting to the public spectacle when “thousands are in the process of receiving pink slips”. Read the comments on this post which are even more vitriolic. Blackrock , a US based money management firm is buying the fund management division (Barclays Global Investors) of Barclays for $ 13.5 bn. Barclays, an UK based bank has been badly hit by the fina...

How would you like a job offer somewhat like this - guaranteed 5 year contract – you cannot be sacked - first year wages $ 15.5 m, or $ 43000 every day - automatic wage increases every year so that the fifth year wages is tripled at $ 48m. That’s a pay hike of 25% per year - all these wages are irrespective of performance. Doesn’t matter at all how you perform - you really have to work only 100 days in a year. The real work is only for 90 minutes in those days – but add and subtract getting ready for work, maybe 4 hours - you are allowed to make money on the side. And the money you make on the side is going to be a multiple of your wages. So much so, that your wages is actually small change. That’s why its called wages; not salary ! - your cost to your company is $ 60m a year - the government is very kindly helping you out by having a special tax rate of 25% to give you an incentive to come - your employer is supposed to be a “non profit social trust” And there is a not a pipsqueak in...

Kenneth Feinberg would rather be called anything else. But the name that is sticking is “the pay czar”. He’s the guy appointed by the Obama administration to oversee pay for the top executives in companies that have received US government bailouts. While his remit is only the companies that have been bailed out, his framework will, no doubt, receive wider consideration amongst all American corporates. In any other circumstance, we would think the US is actually Stalinist Russia. Governments deciding executive pay in the US ?? Even one year ago, we would have laughed at it. No more. By its own greed and unbelievable tone deafness, corporate America has brought this upon itself. Feinberg has an impossible job. It would be humanly impossible to state anything on executive pay without the majority disagreeing. But he comes with an impressive background. He was the guy who decided the compensation for individual 9/11 victims, which was accepted without much noise. What can he do here ? Publ...