The proposed breakup of Motorola into two companies just doesn't make any sense. Here's my thinking: --It's just crazy for a board to cave in to someone like Carl Icahn. He doesn't have the long-term interests of anyone in mind other than his own, and his is...
We've now seen two financial firms fail in the subprime mortgage mess--Countrywide Financial and Bear Stearns. What do they share in common? Spectacularly bad corporate governance. There's been a long-running debate among shareholder activists and corporate leaders whether "good governance" equals "good business," or merely consists of...
I've been beating up on the Sprint Nextel board of directors for months and it appears that someone in Kansas agrees with me: four out of 13 directors are stepping down. See this account. Two directors, Linda Koch Lorimer and Keith Bane, told the Securities and Exchange...
IBM is out with an interesting new study that I think speaks volumes about what top managements should be thinking about these days. Essentially, IBM is arguing, based on a survey of 250 companies globally, that we have crossed from one world--in which chief executive officers worry only about shareholders--into...
Right now, a lot of people are piling on Eliot Spitzer for portraying himself as being so righteous in stamping out evil even while reportedly seeking out the services of high-priced call girls. People seem to be surprised. But I'm not. I was very lonely out there in the...
Fortune magazine has a cover story on Indra Nooyi, the relatively new CEO of Pepsi. It makes for interesting reading and I recommend it. We've had this discussion about Indian CEOs in the Corner Office before but the thing that strikes me about Nooyi is that she...
This is a fascinating battle where two fundamental impulses--the right of shareholders to earn the best possible returns and the role of an independent media in the American democracy--come into conflict. Disclosure: I've been writing for the Times for seven years, but think I can step back...
I made that pronouncement in my previous posting and now I'm being challenged to explain what I mean. I relish the opportunity. This is more than a one- or two-quarter recession. This is the end of a nearly 30-year cycle that started when Ronald Reagan took office...
By now, it's the perceived wisdom that people who are chief executive officers should not also be chairmen of the board. Institutional Shareholder Services and all sorts of rating agencies state, with complete conviction, that the job should be split--at all times, and at all companies. But...
CEO pay is "too high in most cases," say about one in three directors of U.S.-based public companies in a just-released survey by Heidrick & Struggles International and the Center for Effective Organizations CEO at the University of Southern California's Marshall School of Business. The survey also found...
The Wall Street Journal's Joanne S. Lublin says today that in the latest version of management musical chairs, outside directors are moving insde as chi'ef executive officers. Because it's such a hassle to access the Journal site, here's the jist of what she...
Countrywide Financial Chief Executive Officer Angelo Mozilo seems to have finally obtained some public relations advice--he's announcing that he'll voluntarily give up $37.5 million in severance and consulting pay in connection with Bank of America's takeover of his failed firm. He made this announcement the day before Countrywide reported $422 million...
Chief executive officers and top managers have been giving lip service to the concept of ethnic and sexual diversity for many years--with only scant results. Many boards have a token African-American and a token woman, but their presence has no impact on the organization. The number of women on boards...
This is a tough question to ask because Meg Whitman has been a legendary Silicon Valley CEO for 10 years and one of America's leading women CEOs, but ask it we must: does her expected departure from eBay at the age of 51 signal a management failure on her part?...
For many years, CEOs regarded boards as necessary evils. Their goal was to stack the board with people who wouldn't challenge management's authority. After Enron and Sarbanes-Oxley, boards veered in the other direction--they included more independenty directors who were more inclined to challenge and question a CEO and his or...
Okay, let's get real. We've had a series of colossal failures--Chuck Prince at Citicorp, Stanley O'Neal at Merrill Lynch and Angelo Mozilo at Countrywide Financial. All three are losing their jobs or their companies, yet each is walking away with at least $50 million in golden parachutes. This...
Ever since the Enron-era scandals, boards have been becoming more independent, better-organized and tougher on management. Without a doubt, much of that has been necessary. But the great risk is that boards overshoot their core mission and discourage executives from taking risks. This is the heart of...
It ain't supposed to work this way. Howard Shultz launched Starbucks Coffee and eventually brought in Jim Donald, first as head of the company's North American business and then in 2005 as president and chief executive, Donald's elevation to the CEO's job allowed Shultz to retreat from the frontlines to...
The latest McKinsey Quarterly is out with a story that asks, are mergers and acquisitions over? The obvious answer is no, of course. But McKinsey's article makes a very important observation: the wave of private equity and hedge fund deals in the United States may be flaming out, but there is...
I'm indebted to Thomas Kirchner, a fellow business commentator, who has a radical idea. If the goal of organizing a CEO's compensation is go give him or her a real personal stake in how the business performs, why not look at how Porsche has structured the compensation of CEO Wiedeking?:...
