I'm a stockholder in a big company ? for the sake of this discussion, let's call it Acme.
A few years ago Acme suffered some significant setbacks as a result of the September 11 attacks. None of these setbacks threatened the viability of the firm, but as we all remember, 9/11 shook us all.
While dealing with these events, Acme's CEO was seen by many as resolute and firm. Especially in such uncertain times, his leadership was seen as a steadying influence by many, especially by the market (and the share price).
Soon after this, the CEO introduced a new, aggressive and far-reaching business plan for Acme, which included multiple hostile takeovers and subsequent spin-offs, and some simultaneous divestiture of core operations (outsourcing them to other firms). At the time, several members of the board questioned some of the plan's assumptions, especially its cost estimates. There was a minority shareholder protest, but the CEO's charisma and popularity carried the day.
Now, a few years later, the largest of these acquisitions is still problematic for Acme, months after the plan stated that it would be successfully completed. Runaway cost overruns have the firm in a sea of red ink, since revenues from core operations are even lower than projected. Analysts now doubt that the newly acquired firm can ever develop to the point that it shares Acme's culture of decision-making, and the scheduled spinoff as a subsidiary firm is now a large question mark.
The original business case used by the CEO and his team to justify this plan has since been shown to be deeply flawed, with assumptions that have proven to be incorrect. This has damaged the firm's credibility with the markets, and the CEO's popularity as well.
The division tasked with completing Acme's merger operations has recently suffered from ethics scandals, and as a result, those employees and the firm may still be the target of legal action in the courts. Whether the violations were approved by senior executives is still unclear, but possible - another risk to the firm and its stock value. Morale is terrible, and staff attrition is a huge problem. Additionally, many key operations have been outsourced to subcontractors, and quality assurance has been and continues to be an issue.
Accordingly, there are rumors of infighting in the executive suites. One key executive, respected by the board and by shareholders (and whose name was briefly floated as a possible CEO candidate during the last executive search) is now said to be virtually ignored by the CEO and his key staff. He is expected to resign if the CEO's employment agreement is renewed later this year. Another long-time executive, intimately involved with the development of the failed business case, recently resigned "for personal reasons", and has been viewed as a sacrificial offering to appease stockholders.
The CEO's firmness, seen as an asset back in 2001 and 2002, now seems to be a drawback. He has resisted acknowledging any missteps or mistakes, or that the original planning for his wide-ranging initiative was flawed ? to the point that many see his behavior as arrogant and autocratic. He continues to stand behind department heads whose performance has been criticized by members of Acme's board.
Most recently, the CEO and his number two both made public statements again supporting some of the base assumptions of the original business case justifying the hostile takeover ? assumptions that have repeatedly been found to be unsupportable by outside auditors and analysts. These statements hurt the company's stock price in the market, and cause many shareholders to doubt the ability of the executive team to navigate the problems they find themselves in.
Should Acme's board renew the CEO's contract? If you were a shareholder, would you vote for him? Is this too subtle?
"If you are part of a society that votes, then do so. There may be no candidates and no measures you want to vote for ... but there are certain to be ones you want to vote against. In case of doubt, vote against. By this rule you will rarely go wrong." -- Robert A. Heinlein
Let's run government like a business...
by Phantom Stranger 1 Replies latest social current
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Phantom Stranger
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Double Edge
The problem with your argument is that the scenerios can almost be used with every administration. BTW, the "CEO" (prez) can't spend a dime of the "company's" money.... only congress has approval for doing that... so should all members of congress resign? Additionally, when this "CEO" took over, he took over increasing sinking financial numbers from the previous "CEO" ... he inherited an ailing "company".