This level of compensation is outrageous and is tantamount to stealing from shareholders. Public corporations are that and should be run for the benefit of stockholders not for the enrichment of executives and boards of directors who have a fiduciary responsibility to the stockholders. It is pure poppycock to believe that one or a small group of top executives have earned millions of dollars simply because they are holding the reins. This is particularly so for those who are fortunate enough to be at venerable companies where they have merely occupied a seat and have done little or nothing to enrich the shareholders via dividends or stock price. If these outrageous compensation practices continue then the corporate veil should be abandoned and the executives and BODs should be held personally accountable financially for profitability declines and negligent acts of the corporation. Those greedy execs and BODs need to have their skin in the game just like shareholders.
Giant carrier subsidies for mobile devices are wreaking havoc on the wireless industry, says T-Mobile USA (DTEGY.PK) exec Cole Brodman, whose company has seen major subscriber losses due to the fact it doesn't offer the heavily subsidized iPhone (AAPL). Nomura recently lamented the impact iPhone subsidies are having on Verzion (VZ, VOD), AT&T (T), and Sprint's (S) margins. [View news story]
Telecoms are utilities which should be run for the benefit of its customers but in general they are not. Instead they benefit their top executives and BODs. If these individuals had to run their own companies and truly had skin in the game they would not make most of the poor decisions with which they burden their shareholders. Apple, to its credit, has successfully bullied the carriers into the absurd proverbial notion that "We'll make it (telecom profits) up on volume." Did any of these execs study a realistic breakeven analysis, monitor it, take into account the need or cost of more bandwidth, provide benchmark contractual contingencies or simply sign off caverlierly like AT&T did on the break-up fee with T-Mobile? Or perhaps they were mesmerized by the Steve Jobs aura? In any case those telecom BODs should not be reelected and those execs involved should at least be demoted if not shown the door.
Is A Verizon Dividend Cut Impending? [View article]
How about some empirical analysis instead of speculation?
January 24, 2012 Earnings call transcript, Francis J Shammo:
"Thanks, John, and good morning, everyone and happy new year. Before we get into the details, let me start with a few summary comments. We finished the year very strong, creating value for our shareholders in 2011 by generating a total return of 18.2% through a combination of stock price appreciation of 12.1% and our dividend payments. Our stock price appreciation outpaced our peers, as well as the S&P, Dow Jones and broader indices. For the fifth consecutive year, our Board of Directors approved a dividend increase, indicating their confidence in the sustainability of our business model, cash flows and our improving earnings profile into 2012 and beyond."
Fanciful. Since when do large public corporations accommodate stockholders, particularly with CEO's with outsized compensation? Reality dictates. Today's management teams primarily reflect self-aggrandizement...... position and control, certainly not shareholder well-being. What truly builds shareholder value is inspired investors who become enthralled by awareness of a story, a product or service or string of earnings or sales. The best ingredient for stockholder value is optimism...that's the true catalyst to higher prices. Like any CEO it really doesn't matter what Mr. Cook decides at Apple as long as the cauldron brews optimism that translates to demand for the stock. Don't be surprised if the cash on hand surpasses $100B in the near term...it's irrelevant. What matters is can Mr. Cook and team maintain the Jobs legacy.
Avon Products (AVP) gains 5.3% AH after announcing it will split its Chairman and CEO roles. Andrea Jung, who currently holds both titles, will be named Executive Chairman, and the company will "undertake an external search" to find a new CEO. Avon shares have been battered this year by weak earnings and an SEC probe, with the decline leading some to view it as an acquisition target. [View news story]
Avon. This is what is wrong with feckless Boards of Directors: they meekly misplace their loyalty to shareholders and the greater good of the corporation for allegiance to the CEO in the light of blatant poor performance.
Verizon's (VZ) alliance (I, II) with Comcast (CMCSA) and Time Warner (TWC) could spell trouble for DSL providers such as AT&T (T), CenturyLink (CTL), and Frontier (FTR), argues Karl Bode. As it is, DSL is often at a competitive disadvantage to rival wireline broadband technologies, and now DSL providers may also have 4G LTE services to contend with. [View news story]
Perhaps trouble for CTL and FTR but T is still building out U-verse. In addition, T has the wherewithal to secure content.
Taking Notice Of Chimera's Late Reporting Filing [View article]
Thank you, Zvi, for taking the time to provide an illuminating precursor to the actual outcome of the untimely filing. Even intelligent managements often fail to realize in these circumstances continued support of the company requires communication to the shareholders even it is only to state that an explanation will be forthcoming shortly. Notwithstanding this not so unusual "bump in the road" for a REIT of this type these days what longer term prognostication can you offer for Chimera?
Best Buy (BBY) slashes its price for the HTC Flyer tablet from $499 to $299. H-P's decision to unload TouchPads for $99 "permanently changed consumer acceptance of prices that were always idiotic for tablet(s)," writes Karl Denninger. "Firms enjoying high margins on them now (cough-AAPL-cough) are going to get trashed." [View news story]
The key to successul marketing of a product is not simply price but a combination of image, innovation and most importantly but forgotten by wannabes, customer service.
Great customer service fosters trust and repeat business. Backed up by continued product innovation cements the deal. Try all the other tablet manufacturers' customer service departments; they cannot hold a candle to Apple. In my opinion competitors' CS departments stink, the right hand doesn't know what the left handIs doing. Some even treat customers with disdain, the calls to foreign call centers with fake American first names, the hangups, the swtching to one department then another, the insufferable wait times and in the end, often the non-resolution or owning up to the problem. Apple commands a premium price and owns the market for a reason: they deserve it. As long as Apple sticks to and can continue Steve Jobs' vision no competing company will touch them. The competition so far just doesn't get it having just addressed only one element of the marketing mix, the price and simply copied the iPad series with little if any innovation while ignoring customer service and the customer experience.
Though the iPad (AAPL) dominates the tablet market worldwide, Samsung's (SSNLF.PK) hardware has an early lead in the Indian market. CyberMedia Research estimates Samsung accounted for 45.8% of Indian tablet sales in the 9 months ending June 30, while the iPad, hindered by its premium pricing, had an 18.4% share. (previously) [View news story]
There is a certain amount of hubris in Apple's pricing structure. Hoarding cash and not regularly distributing a portion of the huge profits in the form of dividends will eventually come back to haunt them. No company escapes the economic demand curve or competition forever. Take note Apple executives.
The Coming Mobile Innovation Is Not in Data, But in Voice [View article]
Adaption of new technology depends on innovation and visionary leadership coupled with skilled general management. Simply buying or merging companies does not produce success; in fact, many times it is counterproductive to the acquiring company. Acquiring companies often overpay for their targets and lose sight of the need for continued creative marketing and top notch supply sourcing, engineering, manufacturing and quality control capability. Once in-place management too often reap windfall buyouts and though they may remain with the newly merged entity for a time either grow fat and lazy or their efforts are discounted or dismissed.
The lesson here is likely that Microsoft particularly, Google and to a lesser extent, Apple, will not lead the way to the next technological innovation be it a form of integrated voice and picture technology or some other transformative related iteration; rather, some nascent, hungry startup with a small nucleus of bright, excited undercapitalized individuals paying attention to detail and mindful to the needs of their potential users will.
Johnson & Johnson's (JNJ) William Weldon has been ripped as one of America's most-overpaid big company CEOs, and it looks like the coin will continue even on his way out the door: Weldon stands to collect pension benefits and deferred compensation valued at $143.5M after his retirement. [View news story]
Giant carrier subsidies for mobile devices are wreaking havoc on the wireless industry, says T-Mobile USA (DTEGY.PK) exec Cole Brodman, whose company has seen major subscriber losses due to the fact it doesn't offer the heavily subsidized iPhone (AAPL). Nomura recently lamented the impact iPhone subsidies are having on Verzion (VZ, VOD), AT&T (T), and Sprint's (S) margins. [View news story]
Is A Verizon Dividend Cut Impending? [View article]
January 24, 2012 Earnings call transcript, Francis J Shammo:
"Thanks, John, and good morning, everyone and happy new year. Before we get into the details, let me start with a few summary comments. We finished the year very strong, creating value for our shareholders in 2011 by generating a total return of 18.2% through a combination of stock price appreciation of 12.1% and our dividend payments. Our stock price appreciation outpaced our peers, as well as the S&P, Dow Jones and broader indices. For the fifth consecutive year, our Board of Directors approved a dividend increase, indicating their confidence in the sustainability of our business model, cash flows and our improving earnings profile into 2012 and beyond."
Southern Company: One Of The Best Long-Term Investments You Will Find [View article]
Deconstructing Apple [View article]
Avon Products (AVP) gains 5.3% AH after announcing it will split its Chairman and CEO roles. Andrea Jung, who currently holds both titles, will be named Executive Chairman, and the company will "undertake an external search" to find a new CEO. Avon shares have been battered this year by weak earnings and an SEC probe, with the decline leading some to view it as an acquisition target. [View news story]
Microsoft: Massive Income And Growth Potential In 2012 And 2013 [View article]
Verizon's (VZ) alliance (I, II) with Comcast (CMCSA) and Time Warner (TWC) could spell trouble for DSL providers such as AT&T (T), CenturyLink (CTL), and Frontier (FTR), argues Karl Bode. As it is, DSL is often at a competitive disadvantage to rival wireline broadband technologies, and now DSL providers may also have 4G LTE services to contend with. [View news story]
Apple's Tim Cook Should Be More Of An Autocrat [View article]
Taking Notice Of Chimera's Late Reporting Filing [View article]
Best Buy (BBY) slashes its price for the HTC Flyer tablet from $499 to $299. H-P's decision to unload TouchPads for $99 "permanently changed consumer acceptance of prices that were always idiotic for tablet(s)," writes Karl Denninger. "Firms enjoying high margins on them now (cough-AAPL-cough) are going to get trashed." [View news story]
Great customer service fosters trust and repeat business. Backed up by
continued product innovation cements the deal. Try all the other tablet
manufacturers' customer service departments; they cannot hold a candle to
Apple. In my opinion competitors' CS departments stink, the right hand doesn't know what the left handIs doing. Some even treat customers with disdain, the calls to foreign call centers with fake American first names, the hangups, the swtching to one
department then another, the insufferable wait times and in the end, often the non-resolution or owning up to the problem. Apple commands a premium price
and owns the market for a reason: they deserve it. As long as Apple sticks
to and can continue Steve Jobs' vision no competing company will touch
them. The competition so far just doesn't get it having
just addressed only one element of the marketing mix, the price and simply copied the iPad series with little if any innovation while ignoring customer service and the customer experience.
Though the iPad (AAPL) dominates the tablet market worldwide, Samsung's (SSNLF.PK) hardware has an early lead in the Indian market. CyberMedia Research estimates Samsung accounted for 45.8% of Indian tablet sales in the 9 months ending June 30, while the iPad, hindered by its premium pricing, had an 18.4% share. (previously) [View news story]
The Coming Mobile Innovation Is Not in Data, But in Voice [View article]
Once in-place management too often reap windfall buyouts and though they may remain with the newly merged entity for a time either grow fat and lazy or their efforts are discounted or dismissed.
The lesson here is likely that Microsoft particularly, Google and to a lesser extent, Apple, will not lead the way to the next technological innovation be it a form of integrated voice and picture technology or some other transformative related iteration; rather, some nascent, hungry startup with a small nucleus of
bright, excited undercapitalized individuals paying attention to detail and mindful to the needs of their potential users will.