By Paul Hodgson - CCO and Senior Research Associate
Compensation Analyst Ashley Kotzur found this WSJ article on the proposed package for Hostess Foods’ rescue CEO.
Hostess fears that, without Mr. Driscoll, its plan to breathe new life into its struggling business and emerge from bankruptcy could be in jeopardy…. [the deal would] guarantee Mr. Driscoll $1.5 million in a yearly base salary plus annual cash incentives and a "long-term incentive compensation award of up to" $2 million.
That’s a pretty hefty base salary for a company this size and, apparently they’re not disclosing what the potential cash incentive might be….
Sounds Like the Start of a Bond Film
Events Team Leader Mark Magee spotted another WSJ article on February 10th about Bombardier.
Bombardier Inc. (BBD.B.T) received an order for 24 CRJ1000 NextGen regional jets from an unidentified airline that's worth about $1.32 billion if all options are exercised, the Montreal-based plane and train maker said Friday. The airline customer, which requested anonymity, placed a firm order for six jets, valued at about $297 million at list price, and has taken options for 18 more, Bombardier said.
Anonymity? What’s that about?
The Newest Transformer: Ingredion (It's a Decepticorn)
Ashley spotted this press release from Corn Products. Mark explains the headline: Just in case you’re not a Transformer fan, Autobots are the hero robots and Decepticons are the baddies. He dubbed this move a “Decepticorn” because, well, why try and hide you’re a corn company if you’re a corn company?
Corn Products International, Inc. (NYSE:CPO), a leading global provider of ingredient solutions to diversified industries, today announced that it intends to change its name to Ingredion pending shareholder approval at its annual meeting in May. The new name better reflects the company's position as a leading supplier of starch and sweetener ingredients to a range of industries, including packaged food, beverage and brewing.
How about Ingreedycorn? That works too.
This week’s winner of the CEO Quotation of the Week Competition goes to Emerson’s CEO David Farr, collected by Mark again.
Diversified manufacturer Emerson Electric Co. (NYSE: EMR) plans to acquire $5-$6 billion in assets by 2015, primarily in the areas of industrial automation and process management. At the same time, the company plans to sell $2-$3 billion in assets. The CEO told the company’s annual investor conference, “We’re going to drive our growth. We can’t sit back on our ass and wait for it to come to us.”
Whoever thought CEOs would sit back on their ass and wait for things to happen?
You'd Think That Would Be a Given
Mark also spotted this in a No Action letter among Citigroup’s SEC filings. The SEC ruled it could be excluded, but wouldn’t you think that the board would want a director like this?
The proposal directs the company to add "a full time director who is knowledgeable in Business Economics to the Board of Directors for representing the interest of the owners of the corporation (primarily the holders of common shares)" and "having the right of directly communicating with shareholders by email."
Directors communicating with shareholders and representing their interests? What will they think of next?
Red Hot Fares and Crews at Ryanair
Thanks to Research Analyst Nathaniel Flanner for spotting this slap on the wrist for cheap airline Ryanair.
In February 2012 Ryanair faced some negative press after the U.K.'s Advertising Standards Authority (ASA) banned two of the company's ads after receiving 17 complaints. The ASA said the ads were likely to "cause offence." The adverts showed women posing in bra and pants with the headline "Red Hot Fares & Crew! One way from £9.99". Ryanair claimed that the ads do not "objectify" women. Ryanair claimed that, since crew members volunteered to take part, it could not be seen to "objectify" women.
Doing a lot of claiming there, Ryanair, and as Nathaniel points out, there are no women on Ryanair’s board. But I did a little digging and found that Ryanair are serial offenders in the offensive commercial line. For example, in 2010, Ryanair ran adverts depicting rival Easyjet CEO Sir Stelios Haji-Ioannou as Pinocchio and suggesting he was lying about Easyjet's punctuality. The ad called him “Easy Jet’s Mr. Late again”. That was the subject of a libel suit that Ryanair settled out of court.
Then in 2008, Ryanair was told to withdraw an advert featuring a model in schoolgirl-style clothes and a headline "hottest back to school fares". The ASA said the "irresponsible" image appeared to link teenage girls with sexually provocative behaviour. The advert showed the model with a bare midriff in a short skirt, tie, shirt and knee-high socks in a classroom.
Then there were three more ad withdrawals in 2007, two in 2006 and one each in 2005 and 2004.
One wonders what it is about Ryanair that makes them incapable of learning a lesson. Is this the same ad agency designing these ads? Or perhaps there is a clue in a quotation from Sir Stelios about Michael O'Leary, CEO of Ryanair: “It is not very often that someone as arrogant and as powerful as O'Leary is forced to apologise to someone else in public and in writing.”
I miss Britain.