Corporate Governance

Now *HERE* is an independent board.

Daniel F. Akerson - Managing Director, The Carlyle Group

Charlene Barshefsky - Senior International Partner, Wilmer Cutler Pickering Hale and Dorr LLP

Ursula M. Burns - Senior Corporate Vice President and President of Business Group Operations, Xerox Corporation

Kenneth I. Chenault - Chairman and Chief Executive Officer, American Express Company

Mr. Peter Chernin - President and COO, News Corporation

Vernon E. Jordan Jr. - Senior Managing Director, Lazard Freres & Co. LLC

Jan Leschly - Chairman and Chief Executive Officer, Care Capital LLC

Richard A. McGinn - Partner, RRE Ventures

Edward D. Miller - Former President and Chief Executive Officer, AXA Financial, Inc.

Frank P. Popoff - Chairman, Chemical Financial Corporation

Robert D. Walter - Chairman and Chief Executive Officer, Cardinal Health, Inc.

Kudos for American Express in (what I presume) recommending to Dolan that he shouldn't be on their board.

Post to the blog saying what you think, and you run the risk of being told what other people think.

Well, other people dont think that the board, or Patricia Dunn went far enough.

Considering that California prosecutors are preparing indictments, I'm getting much closer to agreeing - Patricia Dunn, the firm's lawyers that were involved, and potentially Mark Hurd if he winds up involved in the mess should be ousted immediately.

People were calling for the ouster of former CEO Peter Dolan for simply doing a bad job. The board was basically forced into it because the CEO may have broken the law.

It's a shame they waited this long to do this - bad performance is enough to oust a CEO, it shouldn't have come to this.

In any case, here's the names of the people on the board of BMY. I'm not sure whether or not they should be congratulated for their good decision or avoided for waiting so long.


James D. Robinson III
Non-Executive Chairman, Bristol-Myers Squibb and Chairman
and Chief Executive Officer, RRE Investors
Former CEO of American Express, member of the board of directors of Coca Cola, First Data Corp, and Novell.

Robert E. Allen
Retired Chairman and Chief Executive Officer, AT&T Corporation

Lewis B. Campbell
Chairman, President and Chief Executive Officer, Textron Inc.
Member of the Board of Directors of Dow Jones.

Vance D. Coffman
Former Chairman and Chief Executive Officer, Lockheed Martin Corporation
Member of the Board of Directors of 3M. Member of the Board of Directors at Deere & Company.

James M. Cornelius
Interim Chief Executive Officer, Bristol-Myers Squibb and Guidant Board Chairman Emeritus
Former CFO of Eli Lilly. Co-Founder of Guidant. Also a Director of The Chubb Corporation, The DirecTV Group, Inc. and Given Imaging, Ltd.

Louis J. Freeh
Former Vice Chairman, MBNA America Bank, N.A. Former director of the FBI.

Laurie H. Glimcher, M.D.
Irene Heinz Given Professor of Immunology, Harvard School of Public Health and Professor of Medicine, Harvard Medical School

Leif Johansson
President, AB Volvo and Chief Executive Officer, The Volvo Group

Vicki L. Sato, Ph.D.
Professor of Management Practice, Harvard Business School, and Professor of Molecular and Cell Biology, Harvard University.
Retired President of Vertex Pharmaceuticals. Member of the Board of Directors of PerkinElmer Corporation, Infinity Pharmaceuticals and Alnylam Pharmaceuticals.

R. Sanders Williams, M.D.
Dean of Duke University School of Medicine and the Vice Chancellor for Academic Affairs at Duke University Medical Center

Most of the information in the bios of the above people were NOT found on the BMY board of directors web page but instead through google searches.

That's reassuring.

Chair Patricia Dunn is going to remain on the board, but stop Chairing it as of January. CEO Mark Hurd gets the Chairman title and Richard Hackborn becomes lead independent director.

Good work by the board to move quickly to put this behind them and to appoint a lead independent director immediately.

Dunn should have resigned from the board, but she also shouldn't have green-lighted identity theft either.

Hurd is to be congratulated for the good work he's done with HP and how he's kept his name out of the press throughout this entire mess.

Who's on the board?

Lawrence T. Babbio, Jr.
Vice chairman and president of Verizon Communications, Inc.
Former director of Compaq and current director on ARAMARK.

Sari M. Baldauf
Executive Vice President at Nokia

Richard A. Hackborn
Former Chairman of the board of HP from January 2000 until September 2000
Former Vice President at HP until his retirement in 1993.

John H. Hammergren
Mr. Hammergren has served as Chairman of McKesson Corporation since July 2002 and President and Chief Executive Officer since April 2001

Mark V. Hurd
CEO of HP.

Robert L. Ryan
Former CFO of Medtronic

Lucille S. Salhany
Former director of Compaq.

Robert P. Wayman
CFO of HP.

Here's a little snapshot of the year for Merge:

1. Company delayed filings with the SEC
2. Company announces "revenue recognition and tax accounting issues" with an acquisition it did in 2005 although it has to restate back to 2002.
3. Company announces it has to investigate anonymous complaints, not saying what they might be.
4. Every law firm in the country specializing in suing publicly traded companies files class action lawsuits against the firm.
5. CEO Richard Linden quits. (looking sort of forced out quits)
6. Interim CEO appointed after CEO walks also quits on the same day the CFO and SVP of business development all quit, all looking somewhat forced out. (William Mortimore, Scott Veech, and David Noshay)
7. Interim co-President and co-CEO Brian Pedlar quits. Not forced out. Quits. The company recieved a letter from Mr Pedlar's lawyer telling them he quits. Not from Mr Pedlar - from his lawyer. When was the last time you had your lawyer sending in your resignation letter? If this doesn't scream RED FLAG, I don't know what does. Third CEO this year to leave. There's a beautiful image.

Now, the board wants a poison pill? That sounds embarassing - that sounds like they know they should all be fired for letting whatever happened in front of them for four years.

So, who's on this board now?

Chief Executive Officer, Kenneth D. Rardin
former Chairman and CEO of Park City Solutions, a leading eHealth company that specialized in Electronic Health Records, systems integration and consulting.


Ambassador Kevin E. Moley
Ambassador Moley most recently served as the permanent representative of the United States of America to the United Nations and other international organizations in Geneva, Switzerland.


Kevin G. Quinn
Mr. Quinn is the founder of WYE River Group, a private investment advisory company specializing in corporate and public finance.


Robert A. Barish, MD
Vice Dean for Clinical Affairs and Professor
Department of Surgery and Medicine
University of Maryland, Baltimore, MD


Dennis Brown
Former Chief Financial Officer, Retired
Apogent Technologies Inc.
Lake Forest, IL


Michael D. Dunham
Senior Vice President, Business Development
Industrial and Financial Systems (IFS North America, Inc.)
Milwaukee, WI


Robert T. Geras
President
LaSalle Investments
Chicago, IL


Anna M. Hajek
Managing Partner
CLARITY GROUP, LLC
Chicago, IL


R. Ian Lennox
RIL Investments, Inc.
Group President & CEO, Pharmaceutical & Biotech Markets, MDS (a health and life sciences company); prior thereto, President and Chief Executive Officer, MDS Drug Discovery & Development, MDS; prior thereto, President & Chief Executive Officer, Phoenix Life Sciences Inc. (a clinical research organization); prior thereto, President and Chief Executive Officer, Drug Royalty Corporation Inc. (a pharmaceutical royalty interest acquisition company)


Ram Ramkumar (appointed 2005)
Chairman & Principal shareholder of Process Research Ortech
Previously served as Chief Executive Officer of Inscape Corporation, a TSE listed company
Mr. Ramkumar is also Director of Cedara Software Corp., a TSE listed medical imaging company


Richard Reck
President
Business Strategy Advisors, LLC
Hinsdale, IL

Yahoo has the full details - STEC is the ticker symbol.

Yahoo story

The part that should set off alarm bells is "sales under will result in an increased number of shares in the company's public float and are expected to increase liquidity."

The CEO, President, and CFO have entered into plans to sell 5.4 million shares of their stock, there's only about 46 million outstanding and only 18 million shares floating.

The insiders are selling off 10% of the company to the public. Don't get me wrong - they have the right to diversify their personal holdings, but expanding the size of the float by a third is going to hurt this stock.

The insiders will still own about 50% of the outstanding stock, so they still have a lot of skin in the game, and you have to love a company with no debt.

It's probably a good stock for the long term, but I'd wait for the insiders to get out before buying.

posted by Larry Diamond  # 11:36 PM 0 comments

Hedge funds aren't just for the super-rich. We also probably have investments in them. Pension funds invest in them, both corporate and public. So do many financial services firms.

So they do serve us too, just a bit indirectly.

They have the opportunity to outperform mutual funds as they dont have some of the restrictions that a mutual fund has - specifically, they can short stocks. Mutual funds can't short stocks. Hedge funds can.

On average, hedge funds *should* outperform mutual funds on that basis alone.
But without audited statements from the hedge funds, it causes a trust issue when looking at performance - you have to know the manager. But you wouldn't trust your retirement to managers you knew nothing about, would you? Really?

I'm fully in favor of hedge funds - in fact, I'd like to see a middle tier available between hedge funds and mutual funds created where you have none of the trading restrictions of a mutual fund and the annoying millionaire status requirement for hedge funds but you also have all of the reporting requirements of a mutual fund so you're not investing in the wild west. That I'd be all over.

But people should realize that hedge funds are not out to enrich the general public - they're out to enrich their investors, as well they should be. A corporate board that has "too many" hedge fund representatives might not be looking out for the general investing public.

Also - what do hedge funds do best? They trade.
What aren't hedge funds known for? Operating companies.
Can they find a person to take the CEO job? Sure.
Can they find a person who'll take a CEO job to grow a company for the long term? No - they're not in it for the long term, they're in it to make their investors money and then look for the next great idea.

Now - find a company that the hedge funds aren't near and maybe there's something to talk about.......

I can't believe this is real. I thought this was a scam, but no, MSNBC/Newsweek has it now.

How could a big respectable company like HP do this sort of thing?

Intrigue in High Places

HP's chairwoman is Patricia Dunn. I'm not sure about the legality of this, but I'm sure she's got a lawyer right now.

At first I thought this was a joke, but it's being re-printed elsewhere.

Thomas Perkins quits HP board

George Keyworth is leaving the board after leaking information to the press.
Apparently HP tapped their directors personal phone lines to figure out who was leaking.

I'm not sure if this is good corporate governance or not, but REALLY interesting to follow either way.

The stock is about 20 and started the year about 30. The company initiates a poison pill. No reason, they just thought it was a good idea. not a great vote of confidence in the firm.

Who's on this board? None of these people seem suspicious (yet).

Max Link, Ph.D. - Chairman
Samuel Broder, M.D. - Chief Medical Officer, Celera Genomics and Celera Diagnostics
Karen A. Dawes - Principal, Knowledgeable Decisions, LLC
L. Patrick Gage, Ph.D. - Director
Bradford S. Goodwin - Director
Laurence Jay Korn, Ph.D. - Director
Mark McDade - Chief Executive Officer
Jon S. Saxe, Esq. - President, Saxe Associates

Pep Boys (PBY) has had some problems over the past year, but the organization has moved to put better people in place. The board also dropped the poison pill they had. The CEO resigned in July, some of the old board resigned (some for non-related reasons) - some new members were added in the past few weeks to appease the hedge funds pushing for changes.

But now the "Corporate Governance" section of their home page goes right back to their firm wide home page - there is no page listing who's on their board!

So let me see if I understand this - this public traded company significantly owned by hedge funds who's had a bunch of organizational changes recently with no information about who's running the company.

They're getting the company organized up to be sold - but do you really want to be buying stock in a company that won't tell you who's running it?

The sad part of this is that I was getting ready to write that it was good that they dropped the poison pill. After doing some research, I'd be very wary of this stock.

Comverse Technology
Vitesse Semiconductor
UnitedHealth Group
Brocade Communications
American Tower
Brooks Automation
KLA Tencor
Juniper Networks
Rambus
Zoran
Safenet
Broadcom
Witness Systems
Mercury Interactive
Apple Computers

Valassis Communications was going to acquire Advo (AD), but sued to prevent its merger citing that Advo "materially misrepresented the financial health of the company...".

I haven't looked into either of these companies, except that I know Advo is suing to ensure the merger happens anyway.

I don't know about Advo, but it seems pretty common sense to me that the Valassis people had to know Advo would countersue and this was going to be some long running litigation. The Valassis people had to figure that paying the lawyers would be cheaper than buying Advo.

Who's on the Advo board?
S. Scott Harding - CEO since October 2004

John Mahoney - Non-Executive Chairman of the Board since June 2004 and Executive Vice President and CAO of Staples, Inc. and is also a director for Boston Sand and Gravel and Tweeter Home Entertainment Group.

Todd C. Brown - formerly of ShoreBank and Kraft Foods

David Dyer - President and CEO of Tommy Hilfiger Corporation, former CEO of Lands' End

Bobbie Gaunt - former interim CEO in 2004 while they looked for a new CEO. Could the decision have been made long ago to sell off the company while it had value? Also a Director of the Great Atlantic & Pacific Tea Company and formerly of Ford

Charles M. Herington - President and CEO of America Online Latin America and serves on the Boards of Coors Brewing Company and Adolph Coors Company and NII Holdings, Inc. (formerly known as Nextel International).

Karen Kaplan - President of a subsidiary of The Interpublic Group of Companies, Inc.

Howard Newman - associated with Warburg Pincus, LLC, a private equity investment firm, since January 1984 and has been a partner of Warburg, Pincus and Company since January 1987. Mr. Newman is also a Director of Newfield Exploration Company, Cox Insurance Holdings, Plc., Encore Acquisition Company, Spinnaker Exploration Company, and several privately owned companies.


None of these people seem particularly suspicious, but you don't sue to prevent a merger and accuse people or misrepresentation because they had cold feet.

reposted from the old blog from August 23, 2006

XM Satellite Radio boss Hugh Panero has resigned from the board of Internet phone company Vonage, just seven months after joining.

Vonage says Panero quit Aug. 18. The company has no plans to replace him. It cites "the demands of his role at XM" for his decision to resign.

Now I'm certainly not saying that the XM radio brass reads my little blog. I'm fabulous, but I'm not that fabulous.

This is just good corporate governance and good common sense. If your house has a big problem, you dont make sure the house down the block doesn't have a big problem - you put your own house in order first and foremost.

reposted from the old blog from August 10, 2006

Again, I'm sure this is just coincidence, or something, but...

Gary M. Parsons Chairman of the Board of Directors of XM Radio

Mr. Parsons was Chairman of the Board of Directors of Motient Corporation from March 1998 to May 2002.

http://www.isp-planet.com/news/2002/mtnt_020429.html
Bankrupcy court has approved a debt-for-equity swap with bondholders that will eliminate most of the value held by shareholders, leaving the company free to reopen on May 1, 2002.

reposted from the old blog from August 10, 2006

I'm not saying these people are bad either, but Nathaniel A. Davis who is the President & Chief Operating Officer was President, COO and a member of the board of directors of XO Communications from late 1999 through early 2003.

XO Communications filed a petition to reorganize under Chapter 11 of the U.S. Bankruptcy Code in June 2002 and completed its restructuring and emerged from Chapter 11 in January 2003.

reposted from the old blog from August 9, 2006

Gary M. Parsons
Chairman of the Board of Directors

Hugh Panero
Chief Executive Officer and Member, Board of Directors

Nathaniel A. Davis
President, Chief Operating Officer and Member, Board of Directors

Thomas J. Donohue
Member, Board of Directors

Eddy W. Hartenstein
Member, Board of Directors

George W. Haywood
Member, Board of Directors

Chester A. Huber, Jr.
Member, Board of Directors

John Mendel
Member, Board of Directors

Jarl Mohn
Member, Board of Directors

Jack Shaw
Member, Board of Directors

Jeffrey D. Zients
Member, Board of Directors

reposted from August 9, 2006

* Jeffrey A. Citron, Director, Chairman and Chief Strategist.
* Michael F. Snyder, Director and Chief Executive Officer.
* Betsy S. Atkins, CEO of Baja Ventures.
* Peter Barris, Managing General Partner of New Enterprise Associates, LLC.
* Morton David, Former Chairman and CEO of Franklin Computer Group.
* Orit Gadiesh, Chairman of Bain & Company, Inc.
* J. Sanford (Sandy) Miller, General Partner at Institutional Venture Partners.
* Hugh Panero, President and CEO of XM Satellite Radio.
* Tom Ridge, First Secretary of the Department of Homeland Security, Former Governor of Pennsylvania.
* John J. Roberts, Former Global Managing Partner of PricewaterhouseCoopers LLP.
* Harry Weller, Partner at New Enterprise Associates, LLC.

I'm not saying these people are criminals or bad or anything, but Citron has had legal problems in the past, Panero's the CEO of XM, who's stock isn't doing well, and Atkins is a former director at Lucent.

Citron is the founder of broker-dealer Datek Online Holdings, the subject of a Securities & Exchange Commission investigation of alleged improper use of the Nasdaq Stock Market's Small Order Execution System

reposted from the old blog from August 8, 2006

The Board of Directors of Atmel ousts the CEO over alleged misuse of corporate funds. It's not every day that you can point to people doing the right thing, but these people deserve some notice for doing the right thing for the company and the shareholders.

http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker=atml&script=410&layout=-6&item_id=892818


Board of Directors

David Sugishita

Non-Executive Chairman of the Board
Steven Laub

President and Chief Excutive Officer, Atmel Corporation
T. Peter Thomas

General Partner, Institutional Venture Partners
Pierre Fougere

Chief Executive Officer, Fougere Conseil
Chaiho Kim

Professor, Santa Clara University

reposted from the old blog from July 23, 2006

Chairman of the Board Charles Dolan wanted to have a three billion dividend doled out to the family and the other shareholders. Some people on the board didn't want to do it because it wasnt in the best interest of shareholders and were removed by Charles Dolan.

On March 2, 2005, Cablevision Systems Corporation (the "Company") received a letter from Charles F. Dolan, the Chairman of the Company, stating that he was acting on behalf of holders of the Company's Class B Common Stock ("Class B holders") owning a majority of the Class B Common Stock, informing the Company that the Class B holders have removed each of William J. Bell, Sheila A. Mahony and Steven Rattner as directors of the Company. The letter did not specify any reason for the removals. The letter also stated that such holders have elected Rand Araskog, Frank Biondi, John Malone and Leonard Tow as directors


So, he got his cash out of the firm and here's who voted to damage the company:

Board of Directors

Charles F. Dolan
Chairman, Cablevision Systems Corp.

James L. Dolan
President and Chief Executive Officer, Cablevision Systems Corp.
Chairman, Madison Square Garden

Patrick F. Dolan
President, News 12 Networks

Marianne Dolan Weber
Chairman, Dolan Family Foundation

Rand V. Araskog
Principal, RVA Investments

Frank J. Biondi
Senior Managing Director of WaterView Advisors LLC

Charles D. Ferris
Partner Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

Richard H. Hochman
Chairman, Regent Capital Management Corp.

Victor Oristano
Chairman, Alda Limited Partners

Thomas V. Reifenheiser
Former Managing Director of JP Morgan Chase

Vice Admiral John R. Ryan USN (Ret.)
Chancellor, State University of New York

Brian G. Sweeney
Senior Vice President eMedia

Vincent Tese
Former Chairman and Chief Executive Officer of The New York State Urban Development Corporation

Dr. Leonard Tow
Chief Executive Officer, New Century Holdings, LLC.

reposted from July 23, 2006

I like being able to point to a good director.

He quit because he had concerns about the company.

A member of the board of directors of XM Satellite Radio resigned Thursday after the company reported a larger-than-expected loss in the fourth quarter. XM reported a net loss of $268.3 million on $177 million in revenue in the fourth quarter of 2005, and a full-year net loss of $666.7 million on revenues of $558.3 million. The company said growing marketing and customer acquisition costs led to the larger loss. Those financial results let one member of the company's board, Pierce J. Roberts Jr., to resign. Roberts said he was "troubled" by the company's financial situation and that the company needed to make major changes to avoid "a significant chance of a crisis." XM officials brushed off Roberts' concerns, saying that the company was on track to reach cash-flow breakeven by the end of this year. XM finished 2005 with just under six million subscribers, far ahead of satellite radio rival Sirius, and plans to have nine million subscribers by the end of this year.