Why Bad Directors Aren't Thrown Out 205
An anonymous reader writes "For publicly-owned companies, the CEO gets most of the spotlight. If the company is successful and the stock goes up, the CEO gets the credit. If the company stumbles, the CEO gets the blame. But an article at the NY Times points how the board of directors for most companies seem to get a free pass, even when their decisions or their CEO selections consistently go wrong. 'Last year, there were elections for 17,081 director nominees at United States corporations, according to the service. Only 61 of those nominees, or 0.36 percent, failed to get majority support. More than 86 percent of directors received 90 percent or more of the votes. Of the 61 directors who failed to get majority approval, only six actually stepped down or were asked to resign. Fifty-one are still in place, as of the most recent proxy filings.' The article uses Hewlett-Packard as an example; the past several years have seen poor CEO choices, the abominable Autonomy acquisition, and billions in write-offs for other failed endeavors. Yet HP's directors were all re-elected."
The reason why there are bad directors (Score:5, Insightful)
Sure, corporate interlock isn't as bad as it once was (don't believe anybody who claims it doesn't exist anymore) but the real reason is that the whole system is an asshole club based on friends and schmoozing. We don't have a mechanism to put good people in charge, and the people running things don't want it that way.
There isn't much social mobility in this country. Directorships and positions like them are just part of a big scam to perpetuate dynastic transfer of wealth.
The system is rigged.
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http://michaelochurch.wordpress.com/2013/03/25/gervais-macleod-16-healthy-culture-vs-why-you/ [wordpress.com]
Notice in the comments I have talked about how hiring CEOs based on years of experience doing the same job is a bad idea.
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Well, you have to admit, most CEOs have a lot of experience at driving companies in the ground and asking for bailouts...
Re:The reason why there are bad directors (Score:5, Interesting)
CEOs have a lot of experience at driving companies in the ground and asking for bailouts.
And unfortunately innovative bail-out strategies are more important skill for US business than running a company that actually invents cool stuff.
The detroit automaker bailouts proved that. Rather than let them fail so the dozen small US automakers with near-production-ready electric cars and motorcycles could compete (and buy the factories and hire the talent they need in the big-3-bankruptcy sales), the government keeps bailing out the "too-big-to-fail" automakers who proved they can't invent a decent car if their very existance depends on it.
Good thing (for them) that it doesn't. Bailouts are a far easier way to get big bonuses than doing actual good work.
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CEOs have a lot of experience at driving companies in the ground and asking for bailouts.
And unfortunately innovative bail-out strategies are more important skill for US business than running a company that actually invents cool stuff.
The detroit automaker bailouts proved that. Rather than let them fail so the dozen small US automakers with near-production-ready electric cars and motorcycles could compete (and buy the factories and hire the talent they need in the big-3-bankruptcy sales), the government keeps bailing out the "too-big-to-fail" automakers who proved they can't invent a decent car if their very existance depends on it.
Good thing (for them) that it doesn't. Bailouts are a far easier way to get big bonuses than doing actual good work.
Actually, the interesting thing is that if the Government hadn't bailed out the Detroit auto makers, Ford would be the only one left intact. They didn't take a bailout and were able to ride out to the storm. GM and Chrysler would have had to go through the Bankruptcy process.
The innovators are left out in the cold (Score:2)
CEOs have a lot of experience at driving companies in the ground and asking for bailouts.
And unfortunately innovative bail-out strategies are more important skill for US business than running a company that actually invents cool stuff.
The detroit automaker bailouts proved that. Rather than let them fail so the dozen small US automakers with near-production-ready electric cars and motorcycles could compete (and buy the factories and hire the talent they need in the big-3-bankruptcy sales), the government keeps bailing out the "too-big-to-fail" automakers who proved they can't invent a decent car if their very existance depends on it.
Good thing (for them) that it doesn't. Bailouts are a far easier way to get big bonuses than doing actual good work.
Actually, the interesting thing is that if the Government hadn't bailed out the Detroit auto makers, Ford would be the only one left intact. They didn't take a bailout and were able to ride out to the storm. GM and Chrysler would have had to go through the Bankruptcy process.
What you have failed to point out is that the lesser known and much smaller vehicle manufacturers in the US which could have benefited from the demise of Chrysler and GM are again, left out in the cold because the biggies are getting all the attention from the government
Re:The reason why there are bad directors (Score:5, Interesting)
aka: Class Solidarity (Score:3)
Corporate boards glad hand the execs for the same reason as boards and executives in utterly unrelated lines of large businesses hang together as a lobby if one is threatened by labor/regulation/public vilification that would help the others: class solidarity. They by-and-large see the interests of their peers as identical to their own, even when they're objectively not. An excellent recent example, fighting attempts by the US Federal government to bring the major banks to heal after they nearly dragged the
Re:The reason why there are bad directors (Score:5, Interesting)
They appoint the CEO and decide his remuneration. That's probably their most important job and, as the article states, HP's board has failed at this task.
They probably can do little positive for companies, but bad decisions can have a big impact.
Re:The reason why there are bad directors (Score:5, Informative)
The reason is blame taking is the CEO's real job.
CEOs at big companies often have very short tenures; and no even abject failures are not necessarily career enders. It really comes down to investor perceptions. If the company is/was a mess to start with or the objective (I'll get to that) is thought to have not made any sense; they usually go on to other things without much trouble. Yes the existing board and management always blame the departing CEO for their ills if things are not great because lets face it, if you have to assign blame who better than they guy/gal who isn't there anymore? This works well because blaming the CEO (even if completely undeserved) is credible enough to protect the company and its board from share holder legal actions or votes that might require other board-members or management to be removed.
Often CEO's will be moving on to "pursue other interests", "spend time with families", etc almost regardless of success or failure and almost always with a giant cash payout. Sure companies that are experiencing really good time might bring in a care taker CEO that hangs on longer; and sometimes you have founding father type CEO (Jobs for example), but most are brought in to effect some thing, they have demonstrated they can do in the past. Maybe its move the target demographic for the product, major re-branding, off shoring efforts; but something along those lines. They can either do it or they can't. At the end of the 18-24 months its time for them to go; even if they are successful as being good at getting one of those projects that sucks up an entire corporations' focus and doing day to day well after the dust settles are different skills and its rare one guy has both.
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The reason is blame taking is the CEO's real job.
CEOs at big companies often have very short tenures; and no even abject failures are not necessarily career enders.
Sign me up! I'll be happy to put in two years at $12M/yr. I'll even let them blacklist me and ruin my reputation when they fire me (after giving me a $10M separation package). I guess I'll have to live in a box and try to stretch out my $34M in savings.
It does matter (Score:2)
uhhh... (Score:2)
Re:uhhh... (Score:5, Funny)
Actually, I thought the headline referred to George Lucas or Michael Bay.
Re:uhhh... (Score:5, Funny)
Nah, they are experts compared to Uwe Boll who came to mind when I read the headline.
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Uwe Boll and the directors mentioned aren't so different. They deliver horrible work, then ask government for more grants for their next blunder.
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I was thinking M. Night Shyamalan.
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Yeah, "I see dead people, they're everywhere" does seem like a decent description of most corporate boards.
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You should read the article, because it doesn't resemble how the US political system works at all. If it did, these feckless board members would be removed all the time.
Re:uhhh... (Score:5, Insightful)
If boards worked like the US political system, there would be two distinct groups of board members: about half wearing neckties, and the other half wearing bow-ties.
Every few years, people would say "those folks wearing bow-ties are completely screwing everything up. Let's kick them out, and replace them with the necktie wearers."
A few years later: "those folks wearing neckties are completely screwing everything up. Let's kick them out, and replace them with the bow-tie wearers."
And so on...
Meanwhile at the country club, the necktie and bow-tie wearers are enjoying scotch and cigars together, gently ribbing each other for wearing the wrong goofy neck-decorators.
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I don't think I've ever seen a proxy ballot where I could vote against anybody. It's always -- Vote to confirm the directors and the recommendations or withhold. That's a candy-ass rigged system.
The deck is stacked in director's favor (Score:5, Interesting)
Director elections are stacked in favor of the incumbents due to the way the elections are structured. The directors nominate candidates for the board, usually through their governance or nominating committee. It's in their interests to keep the status quo and nominate themselves to be the only choices on the ballot. Nearly every corporate ballot (proxy ballot) has just enough director nominees to fill the available slots so there really isn't a choice. Corporate governance is a slow process and companies don't really want a lot of turnover on the board. In most situations this is a good thing, for investors and for the company as a whole.
However, this process does have the effect of protecting directors when things go south as it takes a real grass roots movement from stockholders to get other names nominated for the director slot. Most commonly you'll see this when a large holding company decides to pool their stocks and distributes an alternate proxy.
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Plus, shareholder power is distributed (Score:2)
There are typically a lot of shareholders and even those that may hold relatively large blocks of the voting stock are still typically in a minority position. So it is hard to mobilize them to do anything in concert, such as rejecting a corporate nominee.
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My grandmother had some shares in a regional bank, which, through a couple of acquisitions, ended up as Bank of America. My cousin, brother, and I each got 1/3 of the shares, so, at $0.01 per share dividend, I get a check for $0.18 every three months. My mother insists that we cash them.
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I get a yearly ballot for directors for the Lee County Electric Cooperative. You can vote yes or no for each candidate. I always vote no for everyone.
Doesn't make a difference, but I feel better.
Re:The deck is stacked in director's favor (Score:4, Insightful)
The other big injustice is that most people can't actually vote their shares at all.
The average person puts their money in a mutual fund of some kind. Unless that fund is dedicated to a single stock, the fund manager will vote the shares. You can have enough money in the fund to own 1000 shares of every stock held by the fund, but you won't get to vote any of them. Oh, and the same goes for your pension, assuming you're lucky enough to still have one. Even though you earned the money by working, your employer will hold onto it, vote the shares it is invested in, and if you're really lucky they might even give you what you've earned when you retire. Then again, they might just declare bankruptcy and you can get in line.
That's a big part of why the status quo prevails - almost all the votes are cast by institutions.
Half the problems on Wall Street boil down to "other people's money."
Nokia CEO ? (Score:5, Insightful)
This is in fact the real questions:
* How the Nokia board slowly changed to the point it elected a CEO that bring Nokia to his fall.
* How can the board allow disruptive and destructive action from the CEO without limitation or even a reaction ?
Re:They just can. (Score:5, Interesting)
It was a dynamic market, and they didn't see Smartphone Apps becoming the driving force.
There is only one diagram you need to understand [blogs.com] (from this informative article [blogs.com] to see that this is bullshit. When Steven Elop came into Nokia, Nokia's Smartphone market share was increasing [blogs.com]. Nokia may have had a problem coming five years out, but at the moment they were doing fine.
The irony of this was that, if Elop had just left Symbian and Meego alone, he would probably have had a better chance of driving Windows phone to success than he has now. Just look at how current Nokia phones are a generation behind the competition in terms of weight and features and think how much better they could be if Nokia just had the purchasing power for decent components. Have a look at how the user interface of many of their phones doesn't feel like anyone ever tested using it. Think what a difference it would have made if they didn't get rid of all their UI experts who would have been able to identify and start to fix all the problems in Windows 8.
Re:They just can. (Score:4, Interesting)
To further illustrate your point, about what would have happened had Nokia not adopted Elop's Nokia/Microsoft partnership, allow me to quote from the same source you cited have already cited, (mobile-industry analyst Tomi Ahonen)
http://communities-dominate.blogs.com/brands/2013/03/preview-of-the-smartphone-wars-bloodbath-year-4-smartphones-galore-this-year-will-be-pretty-stable-w.html [blogs.com]
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and think, this could have been Nokia in 2011 when the N9 on MeeGo launched.
And think, if that had happened, then Tizen would have has a chance. But instead Microsoft inserted malware into Nokia's corporate structure and Tizen will flop just as MeeGo flopped. Tizen also could have had a substantial leg up if Intel had spent less time castrating Moblin to only work on Intel hardware — none, in fact, since they had no need whatsoever for their own distribution — and more time working on the interface, which was quite good and which could have been even better. It was tryi
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He was doomed before the board chose him.
And WP was doomed before Nokia chose him, just read the market share progression. All the Microsoft great promise of a brighter future with WP7, WP7.5, WP8 tuned to be just big lies: the market share simply continued to decrease.
The drama is that Nokia was in the way of fixing there problems, allowing transition from Symbian to Meego with Qt, when the new CEO destroyed almost anything. At the time of this disruptive action, there was a lot of speculation about how a quick ans total switch to WP could possib
oh oh oh i know (Score:5, Insightful)
Could it be because capitalism is just an excuse to get the idiots at the bottom to think that Aspiration Will Get You Up There while those at the top are just a bunch of layabouts scratching each others' backs and mostly giving not a fuck about anything beyond making enough money to buy another yacht before they receive their golden parachute?
The world runs thanks to careful centralised regulation and provision of education and research combined with small, agile businesses - and in spite of behemoth corporations.
"If the company stumbles, the CEO gets the blame"? (Score:2)
In what parallel universe is this true?
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The one where people doing the work do not get laid off before "the CEO gets blamed". The one where the workers designing/developing the companies products and future are not alienated, pissed off, or bullshitted out, by someone's brother in law getting hired.
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Ruling class (Score:5, Insightful)
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they're your ruling class silly. Your masters. They own you. Sure, you could do something about that. But you'd need a lot of power. Somethin' like a government body. And that'd be socialism (cue dramatic music).
There is another solution. It was all the rage about 250 years ago. But people need to be dragged down even further until they are willing to risk their cushy livelihoods for a real change of the guard.
Fuck it. I probably already have an FBI file.
I think you mean rebellion (Score:3)
Sure, you might scr
It's not working out the way you imagine (Score:2)
The more powerful the regulators become, the more it is in the interest of those regulated to control or influence the regulators.
The incumbent regulated then use the regulators they influence or control to exclude competitors, fatten their profit margins, or extract subsidies.
Obviously some regulation and the accompanying trade offs are necessary for a well-functioning society, but the abuse I just described happens every single
Alternative? (Score:2)
Besides, there's plenty of ways to regulate a government. That said, it is a complex problem. You don't get to throw up your hands and say "The Free Market (tm) will take care of it!" and call it a day. Also, you have to be willing to accept the idea of elitism. e.g. that some people are better at some things than
Dude, dark ages (Score:2)
Tell that to Uwe Boll. (Score:2, Offtopic)
Worst. Director. Evar.
http://www.mediamikes.com/2010/03/interview-with-director-uwe-boll/ [mediamikes.com]
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The late Ed Wood [wikipedia.org] says "hi".
And also "braaains", but in a stilted and really rather pathetic tone.
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I think they'd buy out the Mortal Kombat franchise and then sell it in tablet form.
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So putting him on the HP Board would probably be good.
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HP's stock price would soar - they would have a board member with management skill far above the existing board
Eerily familiar (Score:5, Interesting)
This sounds a lot like why corrupt politicians who impose bad policy constantly get reelected and appointed to office. For instance, we still have people like Rumsfeld, Kissinger, and the rest of that wrecking crew exerting their influence, damn near fifty years on. Must be a psychological issue.
Comment removed (Score:5, Insightful)
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You got it!
I'm about 4 years out of college with my first real company. I founded it and it's doing great so... I probably am fighting my own future interests here although I totally agree. I have employees who are being paid crap wages. I'm doing well because I understand the market, am willing to take risks, and exploiting my employees.
In my defense at least some of them aren't worth what I pay them. However I do have at least one person who should be making $60 USD / hour whose making $15 USD / hour. Ano
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Please explain then how roughly 80% of the millionaires in the US are first generation wealthy.
Re:The Big Lie (Score:4, Insightful)
A million dollars really doesn't mean what it used to. Note the GP's chosen word; BILLIONAIRES. A millionaire is arguably just upper-middle-class due to inflation and other economic effects, particularly if you're talking about someone with low-seven-figures total net worth, depending on the part of the country you're in. If you invest well, over the course of a decent upper-middle-class type job, I could totally see lots of self-made millionaires at retirement age. This doesn't mean the game isn't rigged for the upper-upper-class, as GP is arguing.
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"I always wanted to be a millionaire. Never thought my ticket would be a house in Van Nuys"
- Former co-worker
Re:The Big Lie (Score:5, Informative)
Warren Buffet is the son of a four-term congressman who owned a stock brokerage and gave him his first job. He graduated high school in Washington, DC while his father was a sitting member of congress, then was promptly enrolled at U. Penn to study business.
Please stop spreading this "started from nothing" bullshit. It is a myth.
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.
Buffet spent 3 years working an entry level as an investment salesman for his father in a small brokerage in the financial hub of Omaha Nebraska for a salary of a couple of thousand per year.
If you think that is something that automatically leads to being considered the greatest investor of the 20th century you are frigging nuts.
Have you noticed the last 20 years? (Score:2)
Re:The Big Lie (Score:5, Insightful)
Everyone loves a rags to riches story, so most of the 'big successes' will play that story up for all it's worth. They'd rather not admit that they went from moderately wealthy with connections to extremely wealthy. Dig deeper and you'll find their rags of childhood were made by Gucci most of the time.
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Please explain then how roughly 80% of the millionaires in the US are first generation wealthy.
He said that it was a myth that hard work is rewarded. You're saying that the people who are rewarded worked hard. These are not, in fact, contradictions.
Suppose you have 20 million people who work really hard. 19.999 million of them end up treading water their entire lives, with a fair bit dying without being able to pay for decent medical care. One thousand of them become millionaires. Every one of those millionaires worked hard, and yet almost everybody who worked hard didn't amount to much of anyth
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That sad thing is you really think that crap is true. Most people are not as dumb as you think. The vast majority of libertarian / tea party type folks I know; don't expect to ever be billionaires. Most of us just want to be able to claim a few acres of own and be left alone. Which we probably could do if "teh liburls" would not try to tax us for breathing.
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YOU could, whether future generations could is an open question ... the ability of capitalism to avoid wealth concentration in the absence of redistribution is an open question (obviously crony capitalism is even better at wealth concentration, but that's a different matter ... you can have relatively large government without crony capitalism, see Sweden for instance, or even Switzerland which is a whole lot more socialist than most libertarians pretend).
In the end feudalism is perfectly compatible with ana
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Except that largely, the reward for more hard work is more hard tiredness and premature aging.
Hard work MAY pay off, and is more likely to than couch surfing, but luck and who you know dominate the equation.
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An AC above posted a nice story ...
http://exiledonline.com/failing-up-with-citigroups-dick-parsons/ [exiledonline.com]
There is nothing wrong with entrepreneurial networking, the problem is that the top is littered with networks of little better than confidence men looking for fellow sociopaths to sell their cons ... and as the article shows, the very very top is by far the worst.
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Your example on the other hand sounds more like someone that had shown they could do something to a lot of people instead of just getting a plum job handed to them on a plate
Not news. It doesn't matter (Score:5, Interesting)
In The Trial of Socrates, I.F. Stone wrote, "The "destruction" Socrates predicts for the bad ruler is little or no consolation to the ruled." All you have to do is recall the destruction of Germany, first at the hands of the New York Fed and the Versaille Treaty, then at the hands of the Nazis, to know how true this really is. After WWII Germany was in ruins... but hey, they we were rid of Hitler!
Stop investing in feudalism and start leading your life like it mattered, and you wouldn't have to listen to the inevitable crap as if it were news. We don't have to continue to swallow the same old crap from conservatives whose paramount consideration is there own wealth & power.
This isn't news, it's history repeating itself in the endless loop of greed, avarice and will to dominate rather than learn. Apparently, glory is a concept that reincarnates itself to the detriment of most anyone who thinks they deserve to live more grandly than the previous asshole.
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Hmm...right now? My mortgage is $450, my phone bill is $30, my internet connection is $32, water/trash $90, electricity $200, food $200, car insurance $70, maybe $100 a month on gas if I drive around a lot that month (typically I do less than that.) If we want to account for other misc stuff, round that up to $1300. $1300 is on a bad month, so yeah, 1920 is plenty, in fact I could retire on that.
We all like New York, but not all of us live there. I live in a decent looking neighborhood in the suburbs of the
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Who are these people with no money? Outside of say north korea or some other extremely socialist country, these people don't exist.
We complain about how abhorrent the working conditions in china are, yet nobody actually looks at what is going on there. The media makes a big stink about the suicides of workers, but the suicide rate is about the same there as anywhere else.
Personally, I'm comfortable with how I live. Yet somebody from France would think that it's abhorrent to make less than $14 an hour and wo
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We import far too much and get gouged by the importers. It's a consequence of an economy based around selling raw materials in bulk at a cheap price - just like Argentina only we've been luckier at finding buyers.
It's a silly discussion anyway because the USA has a huge shadow economy of migrants that are not legally allowed to work so undercut the minimum wage when they do. All that bullshit about everything going to China due to competing on wages do
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Protectionism is every bit of a "corporate" profit thing as it is a "union profit" thing. In fact, unions pushed for that much harder than any corporation did. That whole thing was all about saving jobs, and it had the result of taking away jobs elsewhere for the reason you just stated. They did the same with the sugar tariffs. Or this:
http://www.time.com/time/nation/article/0,8599,1978963,00.html [time.com]
Hey look at that, we're paying our tax dollars to brazilian farmers for giving us...nothing...
Actually though we
Obligatory Stupidity (Score:2, Interesting)
Normally what one does when confronted with bad corporate governance is to disinvest. But Hewlett Packard is in the Dow Jones Industrial Average, so "index funds", which are popular because they extract minimal fees, are obligated to invest in HP.
Activism, it seems, is not in an index funds nature, and so the proxies are routinely signed, keeping bad board members on the job.
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Index funds are balanced by large pension funds like Calpers, hedge funds, activist investors, private capital looking to buy out companies, etc.
HP's board cam very close to being thrown out due to dissatisfaction from these investors.
http://www.guardian.co.uk/business/2013/mar/21/hewlett-packard-shareholder-rebellion-directors [guardian.co.uk]
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The two longest-serving directors, John Hammergren and Kennedy Thompson, were rebuked for a series of missteps including the ousting of two chief executives in as many years, with 46% and 45% of votes cast against their re-election.
Sounds like a fairly comfortable margin to me.
You make the article's point (Score:3)
You make the article's point - after all that has happened at HP over so many years as close as they got to consequences for the board was "cam (sic) very close to being thrown out" (your words).
Nothing else needs to be said, I rest my case.
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Vanguard was mentioned, as was Dodge&Cox.
H.P.’s two largest shareholders are Dodge & Cox, a large mutual fund company in San Francisco, and Vanguard, one of the largest asset managers, which offers a range of mutual funds and index funds. Index funds have no choice but to own H.P. shares, since the funds mirror indexes and H.P. makes up a significant part of the Dow Jones industrial average and the S.& P. 500.
Vanguard wouldn’t say how it voted its H.P. shares, and Dodge & Cox didn’t respond to my inquiries. But a source with knowledge of the voting, who asked not to be identified because he isn’t authorized to disclose the results, said both Dodge & Cox and Vanguard voted in favor of the full H.P. slate of directors. (Both companies will eventually have to disclose their votes, but not until September.)
Some needs to dump out kim jong before they all ge (Score:2)
Some needs to dump out kim jong before they all get nuked.
But even when some like this is down at the smaller companies level and you don't risk a public execution some people are ifly about makeing a move.
Simple solution (Score:5, Informative)
Of the 61 directors who failed to get majority approval, only six actually stepped down or were asked to resign. Fifty-one are still in place, as of the most recent proxy filings.
61 - ( 51 + 6 ) = 4
The other four were dragged out and burned at the stake by irate shareholders. Encourage this response and I'm certain the other BoD members will straighten their acts out. You only need to make a few examples.
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Re:The free market selects for bad personalities (Score:4)
So I make a very ordinary salary as a software engineer, but could probably raise it by 25% by changing jobs but not venturing too far outside my comfort zone.
However, I've got friends who went from earning roughly as much as I did, to quadrupling what I'm making, simply because they play fast and loose: lying about past salaries, standing job offers, etc, to get raises; and taking jobs they're not always qualified for, simply because they're good at bullshit.
What this is REALLY saying, is that they're doing well because the free market values liars and bullshitters. The people who are the most profitable to employers however, are the people whose personalities and personal moral code precludes them from earning too much, allowing employers to get a bigger spread between 1) what they pay employees, and 2) what those employees contribute to their bottom line.
The reality is a bit more complex than I make out (bad directors persist, because big institutional investors want stability and don't want to rock the boat; nepotism (sometimes a good thing!!); information asymmetries everywhere, etc., etc.). Simply put, being a slimy, lying cunt pays -- and not everybody can be a director, because not everybody has the stomach to do what they need to do to get there.
I am tempted to declare this, one of the best posts in Slashdot's history.
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Yes, yes, and yes. And, to the person who says this is one of the best posts in Slashdot history: yes.
I work at HP (Score:2)
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Yup, one of the more senior leaders in our area has been moving around even within the same general area for years. He likely makes FAR more than the typical senior developer, but contributes almost nothing. Anybody who works for him basically ends up having to cover for him and manage around him. Somebody on the team chatted with a previous boss of his who was moving on to another company and his boss commented that he keeps moving around due to incompetence. That boss had let go a bunch of people in a
Proves corporations are just like people (Score:2)
People who go through a series of marriages and divorces to the same dysfunctional, destructive types of spouse, and wonder why things never change
"Bad" directors reflect share control (Score:2)
It stretches credulity to claim that these powerful investors can't get the directors and the control over the company that they want. Instead, I believe what we're seeing is exactly what they want. It's worth remembering that
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In other words, puppets.
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Bad Directors Eventually Wash Out (Score:2)
There are mechanisms in the marketplace that tend to select out bad directors over time or at least put them into marginal and less profitable firms:
The first line of defense against bad management and bad directors are the shorts. I presume that most of you know what I mean when I say that but for the benefit of those who don't a short is somebody who, in exchange for payment of a fee to the owner, borrows shares with a promise to return them at a future date. In the meantime the short controls the shares.
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Good post. Which is why when you government trying to regulate naked shorting you know that is regulation being bought and paid for by the folks at the top to help keep them there. Shorts are good thing. The real tragedy is that when our banks were nearly shorted into the ground a few years back now; we let the pols interfere.
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That's your opinion. However, as I understand the English language the word activist is defined as one who is an especially active and vigorous advocate of a cause. In the case of Carl Ichan the cause is the financial best interests of the shareholders. A less noble cause perhaps than what you have in mind when you use the word but a cause none the less.
My batchmate made diro! to my own company! (Score:2)
Look at the voting ownership (Score:2)
Look at Netflix for example. No matter how many stupid failures their CEO stumbles over.....It's because Netflix is barely a public company where most of the stock is held by a tiny group of 3 or 4 hedge funds. Each of which is run by ONE guy. So most of the voting shares are held by a half dozen people who all know the board personally.
You do the math.
Why use HP as a litmus test? (Score:2)
...when it's traditional to use pH?
The problem with technology... (Score:2)
Cut-n-paste just makes it way too easy to be a vanity paranoid psycho cluebie.
Re:This is news? (Score:5, Insightful)
Yes. The idea that "If the company stumbles, the CEO gets the blame" IS news.
If the company does great, the CEO gets a bonus for having made great decisions.
If the company does poorly, the CEO needs a bonus to make the touch decisions.
If the company does about even, the CEO needs a bonus 'to retain top talent'.
Re:This is news? (Score:5, Interesting)
The problem is that most investment these days is done on a short term basis, people rarely hold their shares long enough for more than the next quarter to matter. I personally hold for much longer, and I refuse to buy into a company where the people running it need to be replaced. If I lose faith in them, then I sell my shares.
I suspect that's a lot of what's going on, if you don't have faith in the board of directors, chances are you sell your shares. And as such, it would be expected that in the overwhelming majority of cases the board would get to keep it's job.
For people who aren't in it for the long term, I'm sure they're even less likely to care much less vote the bums out.
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... they're just credited as 'Alan Smithee.'
Bad directors get fired all the time. Alan Smithee [wikipedia.org] is a voluntary attempt on the part of a director to disown a film.
The Directors Guild of America believes in the auteur theory. Every film must have a director. But occasionally, the producers interfere with a director's creative control of a film to such a degree that the only honest option is for the director to disown the film. "Alan Smithee" allowed aggrieved directors to remove their name from the credits while preserving the formal conceit that the fi