A Fair Day’s Pay?
Many have wondered where the folks in the big corporation boardrooms were while their companies were tanking, and then taking taxpayer money to stay alive. Well, maybe it was a case of not wanting to rock the boat, because board members of big corporations are paid quite well to maintain the status quo of executive management.
As an example: BusinessWeek recently published the pay records of 10 of the highest paid board members of various big-name companies. The average pay to sit on the boards of these companies was $1,686,297 for the year 2008.
The highest paid of the group was Anthony P. Terracciano, who was paid $4,789,993 for sitting on the board of SLM—a giant student loan company. To Terracciano’s credit, he also turned down more compensation in the form of bonuses and additional stock options.
The biggest problem for most directors is that, because of the Sarbanes-Oxley legislation, they have had to increase their annual hours worked from an average of about 100 hours per year, to an average of about 225 hours per year.
A fair day’s pay for a fair day’s work?
Time Out!
The news media has inundated us with so much doom, gloom, hate, and anger, that I’m going to take a Time Out! So, this weekend (maybe longer) I am going to stop watching any news, and simply……..
Try it—maybe you’ll like it!
Bob
Winter Olympics
Well, the Winter Olympics in Vancouver kick off tonight with the opening ceremonies. So, in keeping with the spirit of the games, I thought I’d share a bit of trivia for your contemplation.
- NBC paid $820 Million for the broadcast rights to the games—34% more than they paid for the rights to broadcast the 2006 games.
- The 2010 games are costing Canada $7.85 Billion, of which $1 Billion is for security alone. (What has happened to our world where so much security is needed for a “sporting” event? What is mankind becoming?)
- The most profitable Olympics were held in Los Angeles in 1984, with $464 Million (today’s dollars) profit.
- Rumors estimate the cost of the next winter games in Sochi, Russia at $33 Billion.
- The most expensive Olympics were held in Beijing in 2008 where they dropped a cool $40 Billion. (I imagine much of that expense was for facilities that did not exist prior to the games).
- The Royal Canadian Mint extracted gold, silver, and copper from 6.8 TONS of electronic trash headed for the landfill, to make 615 Olympic and 399 Paralympics medals.
- Today’s Olympic Gold Medals are 92.5% silver (the rest copper), covered with 6 grams of gold plating.
- The last all-gold medals were made for the winter Olympics in Stockholm—in 1912.
I hope these Winter Olympics are profitable for Canada, and I wish the best of luck to all the participants!
Intimidation!
Someone sent me the poster below. Even as a cat lover, I have to admit it raised a hair or two on the back of my neck.
Has anyone ever worked for a boss that used intimidation as their management style? Something for all small business owners to remember—it destroys all semblance of teamwork.
Private Equity vs. An IPO
The mood on Wall Street is still not favorable for IPOs. So, what are successful young tech companies—and their investors—to do? How will they cash in on that big payday? Many employees went to work at some of these companies for very low wages plus stock in the company, which they expected to cash in on IPO day. Now, instead of months from startup to IPO, it is taking years.
In the meantime, many employees are holding stock they deem worthless, because there is no market for it…and that doesn’t make happy employees. Someone at the National Venture Capital Association said, “You want entrepreneurs hungry, not starving.”
Also, many Venture Capitalists are not happy with the long wait for payday. They have fund investors they have to keep happy, and they normally do that through the IPO…but not lately.
Well, things are looking up. Large Private Equity firms are stepping in and laying out cash for employee stock, as well as helping some of these tech firms continue their growth. Here are some recent examples of private equity deals that have—at least partially—replaced the IPO for now.
Facebook — Russia’s Digital Sky Technologies kicked in $200 million and promised another $100 million to buy employee shares and give the company some cash to grow on.
Twitter — T. Rowe Price put up $100 million so Twitter could invest in much-needed servers and equipment to keep up with burgeoning traffic.
Yelp — Elevation Partners put $100 million into Yelp, 75% of which will be used to buy employee’s stock.
Zynga — Game developer Zynga took $180 million form DST. A portion of this money was used to buy out employee’s stock.
These are only examples of some of the larger deals that fast growing tech companies are putting together with private equity firms. So, if your company is a potential candidate for an IPO and you—and your investors—are just waiting for the timing to get better (it may be a long wait), you may want to take a look at some partial stock sales to a private equity firm.
Forget Tax Incentives!
With Congress and the Administration wringing their hands over how big to make tax incentives for small business so they will hire more people; they are—as usual—totally missing the boat. Tax incentives to hire more people will do little to increase jobs. As one small-businessman said in an interview the other night, “Tax incentives are nice and I’ll take them, but they do not encourage me to hire more people. Why would I hire someone that I have no work for and then turn around and lay them off again?”
What is really needed is more work! When small business owners have more work for their workforce, don’t think for a minute that they won’t hire the people they need to do that work—whether there are any tax incentives or not. That’s why they are called “business” owners.
All this haranguing and carping in Washington simply proves even further just how far out of touch with the real world our politicians actually are. Until demand for small business products and services increases, small business owners will NOT hire more people. It’s as simple as that.
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