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(Nasdaq: SEBL) settled today with the Teachers' Retirement System of Louisiana. Allegedly, Siebel, among other things, failed to report the number of options granted to executives, while granting other options at below market price. Tsk, tsk.

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

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(NYSE: VZ), AT&T(NYSE: T), SBC Communications(NYSE: SBC), Sprint(NYSE: FON), and other competitors who must soon face a lean and debt-free WorldCom. But that's another story entirely.

Shameless Plug: Motley Fool Income Investor

All investors should at least consider high-yield investments, but particularly those saving in tax-deferred and tax-advantaged accounts. To find the best of the best when it comes to income investments, you've got to try our Motley Fool Income Investor. For the bigger picture on tax-efficient retirement savings, check out our Retirement Center.


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(NYSE: KFT), raised its dividend 20% today to an annual payout of $0.72 per share. This move increases the stocks current dividend yield from 2.07% to 2.48%.

Kraft joins a growing list of other big names that have increased their dividends recently, including Citigroup(NYSE: C), Fannie Mae(NYSE: FNM), Bank of America(NYSE: BAC), Procter & Gamble(NYSE: PG), Goldman Sachs(NYSE: GS), and Walgreen(NYSE: WAG). Encouraged by more favorable tax treatment for dividends, and investors subsequent renewed interest in them, companies are taking this opportunity to return more money to shareholders.

Not everyone is celebrating at the dividend party, though. Troubled drug company Schering-Plough(NYSE: SGP) lopped off a chunk of its dividend late last week, reducing it from $0.17 a quarter to $0.055. The firm's trying to shore itself up against further financial degradation, and paying out less will help preserve cash.

Some also wonder if Kraft's daddy, Altria(NYSE: MO), which is scheduled to announce its yearly dividend increase following its board meeting tomorrow, will raise its dividend at a smaller clip than in years past. The increase marks the 36th annual hike in 34 years, but it isn't likely to match last year's 10% jump. A 3%-5% increase seems more reasonable, given the litigation and competition concerns facing Altria.

Quote of Note

"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(NYSE: V) entertainment properties. Liberty Media(NYSE: LMCB) is reportedly the latest, which has General Electric(NYSE: GE) looking more and more like the mail-order groom by default in this debt-strapped shotgun wedding.

Others, such as MGM(NYSE: MGM) and Viacom(NYSE: VIA), bowed out early. Still other such notables as Disney(NYSE: DIS), AOL Time Warner(NYSE: AOL), and Sony(NYSE: SNE) never even bothered to fill out their dance cards.

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

Quick Takes

Military supplier Engineered Support Systems(Nasdaq: EASI) gained as much as 13% from yesterday's $46.82 close after reporting Q3 EPS of $0.72 vs. $0.41 a year ago and raising 2003 guidance to $2.40-$2.45 from $2.20-$2.25.

Former genomics darling Myriad Genetics(Nasdaq: MYGN) plunged 15% intraday. The company reported a 20% revenue rise for the year ending June 30, but apparently the Street docked it for a wider Q4 loss. Myriad has about 2.5 years of cash at current burn rates, so it will need more financing to fuel an extensive product development pipeline. The stock, which traded well over $100 in 2000, ended yesterday at $14.37.

Wireless and broadband components and systems maker Comtech Communications(Nasdaq: CMTL) jumped almost 25% after announcing that Q4 EPS would likely be 24% to 43% higher than prior forecasts. Shares closed yesterday at $17.80, well off their 52-week low of $3.83.

Subprime auto lender AmeriCredit's(NYSE: ACF) shares jumped 14% on improved Q4 cash flow and projections for more of the same for the coming Q1. The stock had fallen from over $60 in latter 2001 on concerns that its borrowers are more likely to default during softer economic times.

And Finally...

Today on 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