Apparently, there's some juice left in the quest for responsible corporate governance. We take up the sweeping reforms at WorldCom in a minute. First, software developer Siebel Systems
As part of the settlement, Siebel agreed to an impressive sweep of governance changes, which according to Jeff Amann, Siebel's general counsel, "weren't demanded by anybody." Presumably, paying up to $900,000 of the pension fund's legal fees was also Siebel's idea.
In today's Motley Fool Take:
- WorldCom's Tough New Plan
- Shameless Plug: Motley Fool Income Investor
- Kraft Crafts Dividend Higher
- Quote of Note
- Why GE Needs Vivendi
- Discussion Board of the Day: General Electric
- Quick Takes: Engineered Support, Myriad Genetics, Comtech, AmeriCredit
- And Finally...
WorldCom's Tough New Plan
WorldCom -- soon to be MCI -- received its blueprint for emerging from Chapter 11 today, and, boy, is it a doozy. The plan from court-appointed corporate monitor Richard Breeden contains no less than 78 "recommendations" designed to keep the company from repeating the past abuses under Bernie Ebbers that led to the most massive accounting fraud in history.
Here are the highlights:
A separation of the chairman and CEO positions.
No stock option grants for at least five years; any thereafter must be expensed.
Dividends initially targeted at 25% of net income.
At least one new director to be elected each year.
Ten-year term limits for all directors except CEO.
All directors except CEO must be independent.
Independent auditors must be rotated every 10 years.
$15 million cap on total executive compensation per individual; board is free to set the cap lower.
These governance standards can only be changed with prior shareholder consent.
"As CEO, Ebbers was allowed nearly imperial reign over the affairs of the Company, without the board of directors exercising any apparent restraint on his actions, even though he did not appear to possess the experience or training to be remotely qualified for his position," said Breeden. "One cannot say that the checks and balances against excessive power within the old WorldCom didn't work adequately. Rather, the sad fact is that there were no checks and balances."
Breeden seems pleased with current CEO Michael Capellas and the rest of the management team, saying "there is a deep commitment" to eradicating the harmful practices of the past.
That's probably small compensation for Verizon Communications
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Crafts Higher Dividend
The business of selling Oreo cookies, Jell-O, Kool-Aid, and Oscar Mayer meats must be going pretty well. The parent of all those brands, Kraft Foods
Kraft joins a growing list of other big names that have increased their dividends recently, including Citigroup
Not everyone is celebrating at the dividend party, though. Troubled drug company Schering-Plough
Some also wonder if Kraft's daddy, Altria
"It is hard for an empty bag to stand upright." -- Benjamin Franklin
Why GE Needs Vivendi
Like gentlemen callers realizing that the diva they're courting has an inflated self-worth, media giants are bowing out of the bidding for Vivendi's
Others, such as MGM
Hearsay has plagued Vivendi's kissing booth all along. It publicly rebuffed companies for bidding too low, and it spooked away others with its reluctance to answer financial questions. Yet as desperate as Vivendi might appear, you can't even begin to fathom how hard up GE is for entertainment.
Yes, the same GE that is an annual contender for the title of the world's largest conglomerate is pretty skimpy when it comes to leisure. Beyond NBC, GE is starving for the same kind of media integration of its television network peers. CBS has Viacom's collection of properties, including Nickelodeon and Paramount Studios, while ABC is Disney's set-top mousetrap.
Ex-Universal chief Edgar Bronfman Jr. is also making a play to reclaim its lost love after its merger with Vivendi. But for Bronfman, reacquiring Universal would only provide closure.
For GE, it's more than that. It's about completing a puzzle that the rest of its rivals have already figured out. There's a huge entertainment empire bleeding to death.
Fancy that, GE brings good things to life.
Discussion Board of the Day: General Electric
Will Vivendi be a Major Pain to General Electric? Should General Electric even be making a move to diversify further into entertainment offerings, or is its portfolio already too wide? All this and more -- in the General Electric discussion board. Only on Fool.com.
Military supplier Engineered Support Systems
Former genomics darling Myriad Genetics
Wireless and broadband components and systems maker Comtech Communications
Subprime auto lender AmeriCredit's
Today on Fool.com: If you think our 10th anniversary celebration has been over the top, just wait until The Motley Fool turns 20. While you wait, Jeff Fischer has 10 More Most Shorted stocks for your perusal, and Tom Jacobs takes us down memory lane to answer the question: What Is a Tech Stock? Never one to be outdone, Dayana Yochim offers some timeless advice for couples -- especially those you might call do-it-yourselfers.
Bob Bobala, Robert Brokamp, Paul Elliott, Mathew Emmert, Jeff Fischer, Tom Jacobs, LouAnn Lofton, Bill Mann, Selena Maranjian, Rex Moore, Rick Munarriz, Matt Richey, Reggie Santiago, Dayana Yochim