Corporate Governance

Losing its chauffeur is least of AA’s worries

2 Aug 2017

The UK roadside repair group fired boss Bob Mackenzie for gross misconduct and said full-year performance will be worse than expected. AA’s turnaround has disappointed and it remains saddled with debt. The only positive is that it will now be less dependent on one key executive.

Cox: Snap’s IPO may benefit investors after all

1 Aug 2017

Multiple share classes will be banned from the influential S&P 500 Index, after the disappearing-message app's disastrous debut rankled fund managers. Though one-share-one-vote violators like Facebook will be grandfathered in, the decision could help end a long era of feudalism.

Barclays gets scant credit for new trimmer figure

28 Jul 2017

The bank is retreating from Africa, shrinking quickly to focus on its core business and has a new returns target of 10 percent. There’s no timeframe to hit the goal, which may explain why shares are trading well below book value. CEO Jes Staley can fix that by losing more fat.

Daimler could be next on the break-up autobahn

26 Jul 2017

The German carmaker is thinking of turning its divisions into legally separate entities. Engineering group Siemens did that with its healthcare unit, which it plans to list. Carving out Daimler’s trucks could unwind a long-standing conglomerate discount of perhaps 30 bln euros.

BBC stars will gain from radical pay transparency

19 Jul 2017

The UK public broadcaster has named everyone who earns more than 150,000 pounds a year. The main conclusion is that valuing TV presenters is guesswork. As with chief executives of listed companies, disclosing compensation will just enable them to demand even higher wages.

Mayo board’s exodus sets spicy governance example

18 Jul 2017

Hampton Creek may have used dodgy methods to boost sales of its eggless mayonnaise. Now most of the Silicon Valley startup’s directors have quit after they clashed with the co-founder and CEO. It’s a last resort, but boards at Theranos and Uber, for example, might have tried it.

RBS path to normality gets a little shorter

12 Jul 2017

The UK bank will pay $5.5 bln to settle allegations it mis-sold mortgage-backed bonds, not too out of whack with rivals’ deals. RBS still has a long list of legacy issues to resolve, but the risk is becoming background noise. Boss Ross McEwan is a step closer to paying dividends.

Refiner uses crude tactics in Japanese M&A tussle

4 Jul 2017

Idemitsu’s bosses are trying to clinch a merger with a rival, over objections from Idemitsu’s own founding family. Diluting the family through a $1.2 bln share sale is a value-destructive workaround. The move reflects corporate Japan’s disdain for investor rights.

UGGs could be cozy fit for buyout barons

28 Jun 2017

A pushy investor in $2.2 bln Deckers, owner of the trendy sheepskin-lined boots, issued an odd ultimatum to the board: sell the company or face a fight at the ballot. The numbers may stack up for private equity. It's a question of whether valuation and retail risk are too high.

Governance coup caps first leg of Uber’s journey

21 Jun 2017

Travis Kalanick quit as CEO amid pressure from the ride-hailing app's investors. His stewardship had become a distraction. For a private firm to jettison its controlling shareholder suggests a modicum of market discipline in startup land – if he really does take a back seat.

Publicis broadcasts ad world’s shortcomings

19 Jun 2017

A shareholder group says the French media agency flattered its operating margin by including a one-off compensation payment. The company defends its accounting but the case is a dose of unhelpful publicity for an industry facing a bid-rigging probe and claims of opaque pricing.

Investors may be new killer species at SeaWorld

14 Jun 2017

They voted against the re-election of the $1.5 bln theme-park group’s chairman in an apparent rebellion over pay. It’s a stunning rebuke in the absence of a proxy fight and with a newly minted Chinese 21 pct stakeholder. Activism doesn’t always require an activist.

Bonderman gaffe spreads toxicity past Uber exhaust

14 Jun 2017

The TPG founder’s sexist joke at a meeting about sexism shows how far the ride-hailing app has to go to change its culture. He at least quickly took responsibility and quit the board, unlike CEO Travis Kalanick. But the financier’s poor judgment may worry other firms he advises.

Carmaker emissions scandal finds exec pay sequel

14 Jun 2017

Advisers have designed a hidden scheme that would let Renault-Nissan secretly pay bonuses to Chairman Carlos Ghosn and others. It’s unthinkable that such a plan can be implemented. Recent scrutiny over exhaust emissions has already shown that exploiting loopholes doesn’t pay.

Tesla shareholders reveal deep abiding faith

8 Jun 2017

Even after excluding Elon Musk’s 22 pct stake, a proposal requiring board members to face a vote every year was rejected. Tesla says it'll add a couple independent directors. Authorizing bad governance, however, makes little sense at a company trading at 30 time 2020 earnings.

Complex pay ties British companies in knots

7 Jun 2017

Tesco paid boss Dave Lewis a 142,000 pound allowance to move closer to work, while Burberry’s Christopher Bailey got a big share award at a delicate time. Both controversies are a distraction. If they kept pay simple, companies and investors could focus on more pressing issues.

Blue Apron offers tasty food, nauseating numbers

2 Jun 2017

The meal-kit delivery firm that's going public serves up delicious meals and sales growth. But look closely at the ingredients. New-customer acquisition costs are surging, they're ordering less and competition is fierce. Like Groupon, the product is fine, the stock best avoided.

Linde-Praxair back Big Gas, investors don’t yet

2 Jun 2017

Both gas-makers’ boards have approved their $74 bln transatlantic merger. Even Linde’s sceptical worker representatives backed down. Yet shareholders aren’t pricing in the benefits of the tie-up. They may be partly right, but at least neither side is putting cash on the table.

Publicis pay hike shows where real power lies

1 Jun 2017

Long-time boss Maurice Lévy will receive 2.8 mln euros as chairman – more than he was paid as CEO. After 30 years in charge of the advertising group he has much to teach his successor. But his presence on the board inhibits fresh thinking at a firm that has struggled for growth.

Exxon climate vote puts sector on notice

31 May 2017

Over 60 pct of shareholders backed a move that forces the $340 bln energy giant to ramp up global-warming disclosure, up from under 40 pct in 2016. Exxon already embraces the climate debate more than many in the industry. Holdout peers will have to follow or risk investor ire.