By the end of my interview with FCC Chairman Julius Genachowski, I found myself wondering if he had any idea how important his agency's role would be in this Internet era. After all, his office now touches just about everything of interest to tech and Internet enthusiasts, from national broadband speeds to wireless exclusivity contracts to regulating video content on the Internet and on television. We spoke, in the 25 minutes or so he had available, primarily about the National Broadband Plan, which is the office's 370-page announcement that it intends to bring the American broadband infrastructure, costs, … Read more
Updated August 21, 2008 at 11:02 AM PST with comments from Glassdoor's CEO.
Glassdoor.com uses an online questionnaire so employees can rate their companies and CEOs. I took the questionnaire. It's all the usual stuff, like what do you think of the leadership abilities and competence of senior management, would you recommend your company as a place to work, that sort of thing.
I thought it would be interesting to track the stock performance of the
public companies with CEOs that had the highest approval ratings versus those with the lowest approval ratings.
Guess what I found?
Over the past five years, shares of all the companies whose CEOs had the highest approval ratings were in the black, while shares of all the companies whose CEOs had the lowest approval ratings were either in the red or flat. We're talking 8 of 8 in the black, 8 of 8 in the red or flat.
What does that tell you?
First, that we live in America, the great land of greed and capitalism. If you're stock is in the money, the CEO's a god. If your options are under water, he's a dog. And don't flame me, it's what employees had to say, not me. But for what it's worth, I don't think that's a bad thing.… Read more
In baseball, you get three strikes and you're out. As for technology CEOs, that depends. It depends on the magnitude and visibility of their screw-ups, the aggressiveness of the board, all kinds of things.
Sometimes it just takes one event, if it's big and hairy enough. On the other hand, I've seen CEOs swing and miss dozens of times for years on end, and they're still in the game.
Let's take a look at five recent examples of CEOs getting canned and see what we come up with:
Patricia Russo of Alcatel Lucent. It came as no surprise when Alcatel Lucent announced on July 29 that CEO Russo would step down. She had a decent run at the helm of Lucent, but the 2006 merger with Alcatel has been a disaster for both companies. This is a great example of one huge, high-visibility strike doing a CEO in. Incidentally, Chairman Serge Tchuruk is out, as well.… Read more
The concept of corporate governance implies consistent and effective laws, methods, and metrics for governing our nation's public companies. The sad fact is that there is no such thing. It's a myth. Here's why:
People talk about the fiduciary responsibility of boards of directors. What that means, in plain speak, is that boards are supposed to:
1) Hire and fire the CEO and appoint other corporate officers 2) Compensate the CEO and other corporate officers 3) Oversee corporate strategy 4) Represent shareholders in the transparent and effective governance of the company
As an ex-officer of several public companies and as a consultant, I've been involved with lots of boards, executive staffs, investment banks, VCs, corporate attorneys, and the like. At least in my experience, boards don't operate the way they're supposed to.
Let's take the last point first. Shareholders are offered a slate of directors and a handful of issues to rubberstamp. That means they have two choices: accept or reject.
Now, let me ask you this. If your spouse or doctor says, "Here's my recommendation, take it or leave it," what do you do? That's right, you take it. Is it the best thing for you? Who the heck knows? You had a gun to your head so you nodded up and down.… Read more
Every kid knows the fairy tale of Hansel and Gretel, but I bet you've never heard the story of Jerry and Sue, right? Well, read on.
Not so long ago, in merry old Silicon Valley, lived a family named Yahoo. When hard times and famine hit, the father - an old advertising executive named Bostock - led two of his children - Jerry and Sue - into the forest.
Why did Bostock do that to his kids? Some say he did it so he'd have fewer mouths to feed, but nobody knows his motives for sure.
Lost in the forest, Jerry and Sue finally came upon a huge house made of gingerbread. The house was called Microsoft, and inside lived a witch named Ballmer. Some say the witch was evil, but he was more likely just desperate to reinvigorate his ancient, slumbering home with some youth.… Read more
Corporate fraud didn't start with Enron, Tyco, and WorldCom and it didn't end with them, either. Fraud is rampant in the technology industry. What most employees, investors, and consumers don't realize is how much it costs them.
Excuse me for stating the obvious, but you'd be surprised how many people think there's some magic pile of dough somewhere that pays for companies to comply with investigations, contest charges, and remedy issues. In fact, the costs are born primarily by the corporation. That means it comes right out of shareholders' and employees' pockets. Consumers also pay, albeit indirectly.
And yes, we're talking about costs that materially impact earnings, balance sheets, and cash flow. We're talking about internal and outside lawyers, accountants, consultants, crisis PR, D&O (directors and officers) insurance, Sarbanes-Oxley compliance, exit packages, and even recruiting costs to replace executives.
Of course, the biggest cost is in terms of loss of market capitalization.… Read more
If you've ever been involved in any sort of home construction, you know it always takes longer than the contractors say it will. For the past 10 weeks, the Tobaks have been doing a swimming pool project. So far, so good.
Last night, as the Bay Area cooled down from a three-day heat wave, my wife said, "It would sure be nice to get water in the pool in the next two weeks."
"What do you mean?" I exclaimed, "You know the pool company is scheduled to come out tomorrow and fill it up on Tuesday. Two weeks? We'll be swimming in two days!"
"Uh huh," she said.
The next morning, my wife pulled the pillow off my snoring head and announced, "We have no water."
I replied with a blank, bleary-eyed stare.
"The pool guys are all here and we have no water."
"Okay," I replied, "I'm getting up."
Apparently, a stuck check valve in our irrigation system had been dumping precious water faster than our well pump could pump it. Our holding tanks were dry.
No water meant the pool guys couldn't do their thing. An hour later, the whole gang packed up and left.
When you live in a rural mountainous area, this sort of thing happens from time to time. That means every few years.
So I'm sitting here trying to figure out how my wife knew something was going to happen. She couldn't possibly have known. Wait, I know. She sabotaged the irrigation system just to appear prescient. Nah, that's just crazy.
When I asked her about it, she said she'd just had a feeling.
That got me thinking: Is there such a thing as intuition? And if so, what is it and how does it matter to you and me?… Read more
A long time ago - I think it was 1995 - I was seated at a long dinner table in a rather nice home in Santa Fe, New Mexico. Around the table were all the officers and directors of Cyrix - the microprocessor company that was later acquired by National Semiconductor.
One of our directors was Jack Kemp, quarterback and politician extraordinaire. Jack, who can really work a room, eventually turned the conversation to politics. The question put to the table was whom did we like in the upcoming Republican primaries and why.
I instantly panicked. I didn't even … Read more
Here's the first installment of Train Wreck's first recurring post: Dysfunctional Executive Watch. It'll show up whenever there's enough material. Enjoy the lunacy, and let us know if you've got something to report.
You've got fraud On Monday, the Securities and Exchange Commission filed civil charges against eight former executives of AOL Time Warner for fraudulently inflating online advertising revenue by more than $1 billion. Four of the executives agreed to pay millions in fines and return ill-gotten gains. Charges against the other four, including former CFO John Michael Kelly, are still pending.
The company had previously agreed to fork over $500 million to settle civil and criminal charges brought by the SEC and the Justice Department.… Read more
Maybe I'm missing something, but I don't believe I've ever seen a negotiation handled, with all due respect, as dysfunctionally and amateurishly as the way Yahoo has handled its negotiation with Microsoft.
Saturday's shenanigans seemed more like a reality television show than two industry giants sitting down to negotiate a deal.
Unfortunately, negotiating with Microsoft is not a job for amateurs. There was a time when the two companies were more-or-less evenly positioned in this dual, but that time has come and gone. The weekend's activities have left Microsoft holding all the cards.… Read more