Suggested Reading - Where the Jobs Are, Forbes

David Serchuk, a reporter for Forbes, wrote a story today that examined where the jobs are and where they are not. Serchuk also referred to recent research by Liberum in which we recently predicted executive turnover would begin to rise as the economy moves through the Fall and into the Winter months.

Recommended Reading - The Right Way to Pay the CEO of GM, Forbes

Jack Dolmatt-Connell, an executive compensation consultant, wrote a totally on point piece for Forbes on the best way to structure the pay for General Motors’ CEO. Unlike so many CEOs at public companies, Dolmatt-Connell suggests the following (which I wholeheartedly agree with):

The new CEO’s pay should be tied to his or her performance and linked to the company’s recovery, not just awarded to be competitive.

It should be put together the way private-equity-backed firms do it. That is the best model for creating a true risk-reward proposition. It is elegantly simple, featuring modest base salaries and bonuses, significant upside potential via stock options that promote shareholder value creation, little to no downside protection in the form of severance arrangements, and a required personal investment in the company.

Such a pay structure can be easily understood by investors and taxpayers, and it creates a laser-like focus on significantly increasing enterprise value and guiding the company toward becoming a stable, viable and competitive organization that repays the taxpayer. With this plan, shareholders and taxpayers win, but the CEO and executives also win, and potentially win big. If the CEO doesn’t succeed, he or she gets very little, and the taxpayers’ loss is minimized.

The auto companies are not the only firms that should be considering this approach to executive compensation. Let’s hope President Obama’s team considers Dolmatt-Connell’s suggestion on executive compensation. Should GM file for bankruptcy it is imperative a new compensation package be established for all GM executives.

Stay tuned.

Recommended Reading - The CEOs You Don't Know, Forbes

Matthew Kirdahy wrote a piece in Forbes yesterday that examined a number of highly successful CEOs not generally covered by the financial press.  Kirdahy focused on eight CEOs:

John B. Hess, HessJohn B. Colson, Quanta Services  Robert Parkinson, Baxter International   David A. Smith,  PSS World Medical  Richard Leeds, Systemax  Paul Dykstra, Viad  Dean Foate, Plexus  William Sullivan, Agilent Technology  

The CEOs listed and their companies are worth a quick read.

Recommended Reading - Klause Kneale on Chief Executives, Forbes

Klaus Kneale has written a brief apologist piece in Forbes on chief executives and the particular problems they and their companies currently face.  According to Kneale,

The title of chief executive has become fraught with peril. All blame, no reward. Every chief executive, good or bad, is overpaid. (According to whom? Everyone, apparently.) Grabbing the reins of a distressed company will be a sure-fire way to get publicly villainized and possibly sued. Turnaround artists who are chief executive candidates will ask, “Can I have the same powers and responsibilities but a different job title?” No.  

Check out the short piece, it’s worth a quick read.  While I don’t personally agree with Kneale’s conclusions I have found it useful to read how he views their role.

Recommended Reading - U.S. Downturn Boosts Shareholder Activism

Forbes wrote an insightful synopsis of a recent study conducted by Oxford Analytica on the increasing influence of activist shareholders as the U.S. economy and American corporations face a slow down in demand. The article pays particular attention to executive compensation and corporate governance issues.

Novartis CEO Successor May Have Been Selected

According to an article in the Swiss weekly SonntagsZeitung, picked up by Forbes 7/23/07, Novartis AG NVS (NYSE) chief executive Daniel Vasella might propose current Vaccines & Diagnostics chief executive Joerg Reinhardt as his successor.