Management & Leadership

Buffett’s praise of Jack Bogle sounds self-serving

7 May 2017

At his annual Omaha gala, the Oracle gave a well-deserved shout-out to Vanguard's founder. With big slugs of Berkshire Hathaway's portfolio struggling, including Wells Fargo and IBM, returns are converging with the S&P 500. That makes Buffett's strategy look more like Bogle's.

Cost cuts won’t save Pearson or its CEO

5 May 2017

The UK education publisher is planning 300 mln pounds of savings by 2020, with the troubled North America business taking some of the pain. Markets aren’t giving embattled boss John Fallon much credit for the plans, and falling revenue could cancel out the gain to shareholders.

M&S opts for safety over real shakeup

5 May 2017

The UK high street stalwart named Archie Norman as its chairman, days after finding a new boss for its clothing unit. His retail nous will bolster M&S’ turnaround plans. Yet the hire is the latest in a series of safe choices that underestimate the changes sweeping retail.

VW-Fiat Chrysler merger too tempting by half

4 May 2017

Welding together the German and the Italian-U.S. carmakers might unleash cost savings of more than $38 bln. As the auto industry gets more challenging, and Fiat Chrysler boss Sergio Marchionne more eager to sell, that prize may trump memories of previous car deals gone wrong.

ITV boss picks prime time to duck out

3 May 2017

Adam Crozier is leaving the UK’s largest free-to-air TV firm after seven years as CEO. His strategy of building up ITV’s production arm has been vindicated, but the vulnerability of ad revenue and the rise of digital giants like Netflix and Amazon will vex his successor.

Barclays chief learns silence is golden

2 May 2017

Jes Staley vouched for his brother-in-law in a spat with buyout group KKR, a client of the bank. Helping out friends is a good quality in a human being, and a boss. A CEO’s job, though, is to keep a clear line between life and work. Investors have reason to expect it.

Cheap boss is a luxury Bovis can’t afford

2 May 2017

The troubled UK homebuilder's investors approved a hefty pay package for its new boss. He could earn over 100 times the average UK construction worker, up from 76 times for his predecessor. A politically incorrect salary is the price Bovis pays for a much-needed turnaround.

AllianceBernstein shakeup sends active sell signal

1 May 2017

The firing of CEO Peter Kraus is the latest wakeup call for Wall Street stock pickers. Diversification efforts at the AXA-controlled firm failed to offset a long decline in its once-potent equities business. The upheaval suggests other active managers also have nowhere to hide.

Arconic takes battle of letters to Elliott

24 Apr 2017

The parts maker offered to back two of the activist's four board picks but accused Elliott of twice reneging on agreed compromises. The exit of CEO Klaus Kleinfeld after his own intemperate screed has not relieved the tensions. Regular shareholders may by caught in the crossfire.

Markets are wary of new blot on Japan Inc’s image

21 Apr 2017

Fujifilm has discovered dodgy accounting in its Kiwi unit. It is merely a $200 mln flub. But investor anxiety is understandable. What looked like a manageable accounting problem at Toshiba spiralled out of control. The photocopier-maker's mediocre governance is unhelpful too.

Belated O’Reilly exit shows Fox still on back foot

19 Apr 2017

The U.S. cable channel's star anchor is out after a catalog of sexual-harassment allegations prompted advertiser boycotts and protests. The channel's chief architect, Roger Ailes, was booted amid a similar scandal nine months ago. Rupert Murdoch's empire is changing only slowly.

Credit Suisse pay retreat puts chairman on spot

18 Apr 2017

The Swiss bank has bowed to investor pressure by proposing cuts to 2016 bonuses awarded last month and a cap on payouts for this year. New say-on-pay rules necessitated the climbdown. The episode shows an embarrassing lack of foresight by the board and Chairman Urs Rohner.

Activism prods GAM in right direction

18 Apr 2017

The Swiss hedge fund group will review compensation and cap its CEO’s pay because of pressure from investor RBR. The activist’s more disruptive plans may not win backing from other investors. But it can claim credit for forcing change in an industry resistant to shakeups.

Arconic CEO’s foolishness saves its board, for now

17 Apr 2017

Klaus Kleinfeld's unauthorized contact with Elliott Management in the midst of a proxy battle gave directors an easy excuse to let the poor-performing boss go. The affair, though, underscores the hedge fund's argument that the board bears much of the burden for the firm's woes.

Viewsroom: United joins corporate culture chaos

13 Apr 2017

Taking three days to offer a basic apology to the passenger dragged off a flight suggests deeper problems at the U.S. airline. Poor leadership and processes took a toll on Wells Fargo and Toshiba, too. Executives and boards ignore the lessons of cultural failures at their peril.

Active boards needn’t fear activist investors

12 Apr 2017

Dulux paint maker Akzo Nobel wants to stymie a vote on whether its chairman should go, after he rebuffed a $24 bln bid from rival PPG. That makes it look like the company is trying to stifle debate. While activists can overplay their hand, good managers still have the advantage.

Jes Staley’s “honest mistake” still hurts Barclays

10 Apr 2017

The UK bank's CEO will get a pay cut after trying twice to unmask a whistleblower. The regulator thinks bosses shouldn't have to go for honest errors – which Barclays says this was. But it doesn't say good things about internal processes – or Staley's knowledge of them.

Zara may end up bound by family ties

7 Apr 2017

The founder of Spain's Inditex, which owns the fashion chain, placed his stake in a holding company, ensuring his heirs keep control. It looks benign for investors, who have made handsome returns. The problem comes if future retail disruption calls for a break from tradition.

BP’s bonus rethink is still kind to Bob Dudley

6 Apr 2017

The British oil major has caved to shareholder pressure and cut 2016 pay for its chief executive by 40 pct. Dudley has cleaned up BP since the Gulf of Mexico spill. But his latest long-term incentive plan still positions him comfortably ahead of his domestic peer group.

Lowball bank pay targets are lesser of two evils

27 Mar 2017

Barclays and Standard Chartered's bosses will get bonuses even if their banks don't earn back their cost of equity. Unstretching targets, though, reflect the fact neither lender has said when it will start making an economic profit. Paying less won't bring that moment closer.