Comments

Not only that, but in this bailout environment, merging two large companies creates yet another large company that is 'too big to fail'. If you can't find a productive way to invest money in your own company, please don't create another TBTF.

Posted by Bob Gaynor at January 26, 2009 12:30 PM

CEOs are like a box of chocolates...

Posted by Candy Man at January 26, 2009 12:48 PM

Bob...I agree, although I thought TBTF stood for something else at first glance!

Posted by Candy Man at January 26, 2009 12:49 PM

They'll learn when someone steps-up and says STOP, but until boards become truly independent and objective this kind of lunacy will continue. As for TBTF - to me it's becoming more and more a case of a Tone-deaf Boss' Troubling Fantasy every time I hear of some merger that seems only meant to make the company scary-big to politicians.

By my count there were 30K+ layoffs announced today, pretty soon there will be no such thing as Too Big To Fail because a company with 100K employees going under will just sound like an average day in the world of the newly jobless It's very very sad.

Posted by Andrew Hayden at January 26, 2009 2:42 PM

Andrew,

Cheers! I believe we're in the midst of a BFD (the last letter being acronymatic for "D"isaster). I'm sure you're well aware of the two other letters...

Posted by Candy Man at January 26, 2009 9:11 PM

This from the man who came to Detroit last year and before the Detroit Economic Club said, "I think there's one too many" automakers. Are others thinking the same of banks right now? After the speech, Mr. Lewis also said, in a rather pedantic self-righteous tone, "I think the American people are suspect of just giving more money and buying more time. They want to see that the companies have in fact changed and the strategies have changed." After the original bailout of $25 billion, Bank of America was recently back to the Treasury Department for an additional $20 billion. Do you think someone needs to remind Mr. Lewis of his own words? Should Treasury have withheld the additional $20 billion? Speaking of accountability, where did the original $25 billion go? Bank of America got the additional $20 billion without being held accountable for the first $25 billion. This is insanity.

Posted by Judith Ellis at January 26, 2009 11:21 PM

Judith,
No I don't think anyone needs to remind Mr. Lewis of his words. They need to remind his replacement....and then tell his cell mate what a thief he was for taking billions of tax payers money and returning nothing. This kind of behavior needs to have both consequence and penalties. Insanity is probably not a strong enough word.

Posted by Andrew Hayden at January 27, 2009 1:08 PM

"This kind of behavior needs to have both consequence and penalties."

Andrew - I so agree this statement.

I heard John Thain this morning making lame excuses why he redecorated his office for some $1.22 million last year BEFORE the bailout. It was so disturbing listening to this guy; he appeared to be in an alternative universe. I was grossed out.

What Thain conveniently left out was that he had given employee bonuses of some $2 to $3 billion right before the Bank of America takeover. Merrill Lynch reported a substantial loss last year while employees were getting PAID!

While doing the interview this morning, Thain seemed to be vying for another CEO position, perhaps speaking to other board members of other companies. He spoke with contrition and arrogance, an odd mingling which probably signifies insincerity. What's wrong with these guys? What's wrong with the board members of these companies?

If board members want to continue to allow their CEO's to mismanage money and act unethically, go at it. But when taxpayers are bailing these private industries out, well, that another matter altogether.

I just read that the NY Attorney General has just subpoenaed him regarding the bonuses. I wonder if this will end justly? Someone always pays for unethical behavior. But we most certainly need those who practice such to be held accountable.

Posted by Judith Ellis at January 27, 2009 2:23 PM

The Pfizer mega merger is interesting in so far as all their attempts to create value through merger have so far been reported to have difficulties in the integration. From 1999 to 2006, the stock dropped from $50 to $30 across two mergers.

If we remain optimistic, they should have now had the benefit of considerable organisational learning.... in other words 3rd time lucky (if should it be planned luck...

We'll see in due course.

I agree that CEO behaviour becomes problematic when the public are propping up the company via government intervention.

For light relief, here's a clip of an event we did for Pfizer (or more correctly, the 'aftershow' of an event we did on creativity and innovation. I am reliably informed that it did not cause the drop in share price lol

http://uk.youtube.com/watch?v=KsIgYjQvsDw&feature=channel_page

All the best

Peter Cook

Posted by Peter Cook at January 28, 2009 7:20 AM

Why do these guys keep their bonuses?

http://www.youtube.com/watch?v=tD0t3k0dnoc

Posted by Judith Ellis at January 29, 2009 11:48 PM

When asked to name just one big merger that has lived up to expectations, Leon Cooperman, former co-chairman of Goldman Sachs' Investment Policy Committee, answered, "I'm sure that there are success stories out there, but at this moment I draw a blank." Yet despite the absolutely dismal track record of mergers and acquisitions, the financial industry keeps pushing them because they are a big money maker for all the poobahs involved, just not very good for the employees, clients, customers and, as often as not, the shareholders. The only real goal of many a merger and buyout is to clean out the assets (technology, intellectual property, brand equity, etc.) of the smaller company with no regard for the ‘little people’ involved. As Judith said "Someone always pays for unethical behaviour." Unfortunately, the "someone" is usually not the person(s) behaving unethically.

Posted by Bob Walker at January 30, 2009 3:45 PM

Now, I know that to many Rudy Guiliani is a hero after 911. OK. He did not fall apart. But what in the heck is he talking about now? He actually defended these billion dollar bonuses today with the lamest excuse I have ever heard, so lame it doesn't need repeating. I sincerely doubt that heroes can just go from upstanding to not standing. So, will the real Guiliani please stand up?

Posted by Judith Ellis at January 30, 2009 5:38 PM