There are seminal moments in Fool history, and then there are seminal moments in Fool history. First we came on America Online. Then we debuted on the World Wide Web. Tomorrow, we make our first appearance on the Today Show.
Look out, Katie, Matt, Al, and Ann! Fool co-founders David and Tom Gardner will don the jester caps and take NBC by storm Thursday morning. They'll be talking about their new book, What to Do With Your Money Now, and offering some timely and timeless money advice for Fools the world over. Now, let's just hope that 'N Sync kid doesn't get launched into space, leading to a big news story that boots our boys off the show.
In solidarity with Washington Post writers, who are withholding their bylines from stories during a contract dispute, we're withholding our names from today's Motley Fool Take.... Wait a minute, we do that every day. Maybe next week we'll start including bylines. We're not with the union. What do we have to lose?
The Motley Fool 50 has a crush on Ann Curry. Today, the index rose about 1%.
In today's Motley Fool Take:
Discount Retailers Rocking
The big keep getting bigger. Retailing giant Wal-Mart (NYSE: WMT) reported a healthy 6.2% gain in same-store sales for the month of May. Keeping the favorable trend we alluded to in Industry Focus 2002 alive, discount department stores have been gaining market share at the expense of their full-price peers. While some would argue that saving money is more than a fashion statement, the fact that shoppers are looking to stretch their buying dollars when greenbacks are tight certainly hasn't hurt Wal-Mart any during these uncertain times.
Consumer non-durables, by definition, need to be replaced. While investors have priced the makers of these defensive all-weather products accordingly, leading discount retailers like Wal-Mart and Target (NYSE: TGT) might still have elbowroom to grow. After all, they are not only the facilitator of these transactions. They are also growing their share of those transactions taking place.
With Wal-Mart registers ringing up a staggering $18.3 billion last month, shoppers are voting with their pocketbooks. Between the namesake behemoths and the company's Sam's Club membership-based warehouse stores, somewhere out there Sam Walton is smiling kindly.
Discussion Board of the Day: Living Below Your Means
Want to learn how to make your money go farther? One of the most popular discussion board areas in all of Fooldom is devoted to that very art. All this and more -- in the Living Below Your Means Discussion Board. Only on Fool.com.
CEOs Who Rip Us Off
Wouldn't it be nice to be grossly negligent at your job, resign in disgrace, and make millions? If that sounds like a good deal, we have the job for you: CEO.
Today, The Washington Post published an article describing the severance and retirement packages received by several former corporate executives, most of whom were in charge of companies with dwindling profits, questionable ethics, plummeting stock prices, or all of the above.
In the article, the Post cited the compensation packages of the following executives:
- Disgraced former WorldCom (Nasdaq: WCOM) CEO Bernard Ebbers will receive $1.5 million annually for the rest of his life... as long as he keeps making payments on his $400 million loan from the company. Now, that's a deal: preside over a company whose stock goes from $80 a share to less than $2 in two-and-a-half years and still get a huge, low-interest loan and a monstrous pension.
- Dennis Kozlowski, who stepped down as chairman of Tyco International (NYSE: TYC) on Monday and was indicted on tax evasion yesterday, is due a severance package worth more than $100 million. Tyco stock is down more than 70% this year.
- In 2000, George Shaheen became the head of Webvan, the online grocery delivery company. By July of 2001, the company was being interred in the dot-com cemetery. For his 18 months of service, Shaheen will receive $375,000 a year for the rest of his life. (We can't help but mention that Shaheen's previous employer was Andersen Consulting.)
- Dynegy (NYSE: DYN) Chairman Charles Watson resigned last week and will earn more money than if he had remained on the job for the eight months left on his contract. His severance package: anywhere between $18 million and $33 million. Dynegy stock: $8.80 a share, the same amount it was in January 1996.
- Jack Welch, former head honcho at General Electric (NYSE: GE), will receive $9 million a year for life. OK, if anyone deserves a sweet retirement deal, it might be Welch. But you still can't help but ask, "Didn't he make enough from his salary and options? At what point does such gross compensation become disgusting?"
We at The Motley Fool believe in incentives for success, but if an executive can expect to make millions while the company goes down the tubes, where's the incentive not to fail?
If you'd like to learn more -- including what you can do about executive over-compensation -- visit the AFL-CIO Paywatch website.
"I think over the years there has been too much winking at this kind of activity... We don't intend to wink." -- Manhattan District Attorney Robert Morgenthau, announcing tax evasion charges against ex-Tyco chief Dennis Kozlowski
There's good news and bad news. First the good. According to a recently released study conducted by (note: not commissioned by) the National Funeral Directors Association (NFDA), 88.6% of families that used NFDA's services earlier this year thought that the funeral homes did an "excellent job." The NFDA asserts that its members "are caring professionals," who are "doing their best to fulfill the needs of the families we serve." This is surely true for many, if not most, funeral directors.
But the bad news is that too many people who use the services of funeral homes don't know enough to understand whether they're getting a fair deal or not. After all, few people have any natural interest in learning about the funeral industry, and when they suddenly find themselves in need of its services, they're usually in no state of mind to conduct research and think objectively. Many get taken advantage of.
For example, did you know that, for many of us, "pre-need funeral insurance" isn't all it's cracked up to be? (Learn more in this article of ours, as well as in this rebuttal.) Did you know that the "protective sealer" you may be urged to buy along with a casket won't protect your loved one's body from decomposing, but may actually hasten the process in unpleasant ways? (Here's another questionable tactic: "ID viewing.")
Get informed now, when you're not overwhelmed by grief. When those sad but inevitable days arrive, you'll know what's fair and won't get ripped off. Learn more from the Funeral Consumers Alliance, Profits of Death, and the long but enlightening Funerals and Ripoffs. Also, check out our previous "Ask the Fools" on how much funerals cost and how to plan your will. Finally, a good resource for learning about estate planning issues is Estate Planning Links.
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McDonald's (NYSE: MCD) has apologized to "Hindus, vegetarians, and others" for not being more clear about ingredients in its french fries and hash browns. The hamburger king will donate $10 million to Hindu and other groups in order to settle claims against it for using beef flavoring in its vegetable oil.
One day after analyst Holly Becker said she thought AOL Time Warner (NYSE: AOL) would earn less ad revenue this year, the company reiterated its target range of $1.8 billion to $2.2 billion.
eFunds (Nasdaq: EFDS) is in turmoil today. The company, which provides electronic payment services, said it would earn some 30% to 50% less than expected this year because of "a combination of longer-than-expected sales cycles, economic and political uncertainties, delayed buying decisions, and product cancellations." The stock plunged 35% on the news.
Grocer Albertson's (NYSE: ABS) reported earnings of $0.57 a share, excluding restructuring charges, which was in line with expectations. It also raised full-year guidance slightly.
As the Telecoms Turn: Qwest Communications (NYSE: Q) investors hounded CEO Joseph Nacchio at the annual shareholders meeting yesterday for eliminating the company's dividend while raking in a $27 million salary in 2001. Cutting the dividend will save $83 million a year for the cash-strapped company.... Another firm starved for cash, WorldCom (Nasdaq: WCOM), may lay off 16,000 employees according to a USA Today story.
In one of the biggest wins in its history, the U.S. soccer team defeated Portugal 3-2 in the World Cup opener for both squads.
And Finally...
Today on Fool.com: The Rule Maker takes a look at the future of the wireless Internet.... In Fool on the Hill, Selena Maranjian shares the scoop on everything from REITs to debt to ROIC to Pfizer from our discussion boards.... Is the concept of buy and hold dead?
Contributors:
Bob Bobala, Robert Brokamp, Jeff Fischer, Tom Jacobs, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Reggie Santiago, Dayana Yochim
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