Corporate Governance

Shareholders lose when moguls collide

29 Jan 2008

John Malone and Barry Diller are headed to court over the breakup of IAC. Both have irrational requests. The best outcome for shareholders would be a fair auction, or spinoff, of all the component parts.

European bank regulators look too slow

29 Jan 2008

The news of SocGen s problems didn t get to Washington on time. That failure of communications is typical of a Balkanised regulatory system. As European banks become more international, national supervision seems subscale. A stronger system could prevent a worse crisis.

Hedge fund code no guarantee of self-preservation

22 Jan 2008

The UK hedge fund voluntary code is a sensible attempt to address some of the big issues that have got the industry in trouble in the past. But hedge funds today face very different challenges against which these rules may prove a chocolate fireguard.

World Bank turns to China for economic guidance

21 Jan 2008

China has just become a contributor to the bank, which borrows from the rich to lend to the poor. An obscure Chinese academic, Lin Yifu, will be the new chief economist. It s a sign of the institution s weak position it needs China more than China needs it.

Banker bonuses border on obscene

18 Jan 2008

Paying themselves bonanzas in a year when the financial system suffered a heart attack and Wall Street had to be rescued by rapid central bank rate cuts undermines the legitimacy of capitalism. If this provokes an envious backlash, financiers have only themselves to blame.

Bonuses fly while banks sink

18 Jan 2008

Compensation at Wall Street s five biggest investment banks rose 9% to $66bn last year impressive considering the banks market caps shrunk by a $50bn. The average banker pocketed $350,000 for wiping out an average $274,000 of shareholder value. Nice work if you can get it.

Outbreak of peace at BCP not as positive as it looks

16 Jan 2008

It s good news that the Portuguese bank s shareholders have, at the third attempt, agreed a new CEO. But that doesn t tackle the root of the bank s problems. Until BCP removes its poison pills, there s no guarantee history won t repeat itself.

Class-action lull faces subprime kick

10 Jan 2008

Actions by the plaintiff's bar have been plumbing historical lows. But litigation remains a significant burden on US companies. Thanks to the subprime mess, lawyers will still have plenty to keep themselves occupied.

BarCap whittles down CEO succession race

8 Jan 2008

The subprime mortgage crisis seems to have scuppered Grant Kvalheim s hopes of running the UK investment bank. Jerry del Missier now seems to be the only candidate to take over when boss Bob Diamond leaves. But in this environment, that s hardly set in stone.

Bear Stearns boss to give up the joint

8 Jan 2008

At last Jimmy Cayne is passing the CEO torch. The 73yearold s stewardship from the golf course and bridge table during the firm s darkest hour was more than an embarrassment. The board would be acting charitably to allow him to remain chairman.

Thain prepares Merrill for a kitchen-sinking

21 Dec 2007

Temasek s mooted $5bn capital injection indicates that the Thundering Herd s new boss will take another $8bn or more of writedowns. He needs the Singaporeans to replenish capital without resorting to fireselling assets like its Bloomberg stake.

Marsh & McLennan finally examines a split

21 Dec 2007

Boss Michael Cherkasky is out as well. He cleaned the stables well after two major scandals. But the group s awkward structure was his downfall. Combining insurance brokerage, consulting and a detective agency is neither simple to manage nor sensible.

Perry shows activism can succeed in Japan – sort of

19 Dec 2007

Japan can be a frustrating place for investors, as Perry Capital's struggle with NEC shows. But Perry hasn't failed. It got the chipmaker to accelerate its costcutting efforts. This small success offers other investors a faint glimmer of hope.

Citi could’ve done better with chairman title

11 Dec 2007

It s good that Citi is separating the CEO and chairmanship. And it s not like Win Bischoff is a lightweight. But his experience mimics that of new CEO Vikram Pandit s, he serves on too many boards and, though not a Weillacolyte, he s certainly an insider.

Subprime conflagration jumps the debt firebreak

3 Dec 2007

It was originally fuelled by gobs of leverage, which forced entities like Bear Stearns hedge funds to dump assets to meet margin calls. But unleveraged funds, like those run by Florida, Montana and Connecticut, are being scorched. Only patience can help limit the damage.

Kerkorian given a gift wrapped in poison

27 Nov 2007

The takeover defence adopted by Tesoro allowed the wily billionaire to withdraw his tender offer for 16% of the US oil refiner. With refining shares plunging since he kicked the deal off, Tesoro s board gave Kerkorian an out at shareholders expense.

Citi’s pricey debt is just the tip of the iceberg

15 Nov 2007

It s not the only firm that will have to stump up to borrow money: the cost of debt for banks could remain high well into next year. But that s not all. If subprime writedowns and credit concerns worsen, many could be forced to raise equity as well and that ll be expensive.

Chuck prints much less money than Stan on exit

9 Nov 2007

Prince is leaving Citi with a nestegg worth less than $30m. O Neal left Merrill with $160mplus. Partly that reflects Citi s weaker stock performance. But the bigger bank seems to be less generous at the top, too. Let s hope it can stick to that as it looks for a new CEO.

Citi needs a plumber with a taste for dismantlement

4 Nov 2007

Chuck Prince took over amid regulatory tumult, but gave the impression he hadn t mastered Citi s complexity. The bank needs a confidenceinspiring leader unwedded to Sandy Weill s legacy of expansion, with an understanding of the waterworks of finance, like John Thain, and a willingness to take them apart.

ACS founder is the problem, not its directors

2 Nov 2007

Five independent directors are to resign at ACS amid boardroom rancour and a withdrawn $6.2bn management buyout offer. They tried to run an auction, but the company is fraught with conflicts that are of the founder s doing. Shareholders should take it out on him.