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- Manlobbi
Personal Finance Topics / Macroeconomic Trends and Risks❤
No. of Recommendations: 2
WSJ article:
https://www.msn.com/en-us/money/companies/the-rene...Public companies in the U.S. have dutifully shared financial results with investors every three months for the past 50-plus years. A new proposal hopes to change that.
The Long-Term Stock Exchange plans to petition the Securities and Exchange Commission to eliminate the quarterly earnings report requirement and instead give companies the option to share results twice a year, the group told The Wall Street Journal.
It says the idea would save companies millions of dollars and allow executives to focus on long-term goals instead of worrying about hitting quarterly targets or prepping for earnings calls.
JPMorgan Chase CEO Jamie Dimon and legendary investor Warren Buffett co-authored a Journal op-ed that advocated moving away from reporting quarterly earnings estimates. The pair argued that companies hold back on spending and hiring to meet quarterly earnings forecasts.Would such a proposal cause a CEO to innovate and invest in physical capital? Would stock buy backs be affected? Any impact upon stock speculation based on earnings?
No. of Recommendations: 0
Would such a proposal cause a CEO to innovate and invest in physical capital? Would stock buy backs be affected? Any impact upon stock speculation based on earnings?
No real changes would happen. The "dog and pony shows" would be reduced 50% every year.
No. of Recommendations: 0
allow executives to focus on long-term goals instead of worrying about hitting quarterly targets or prepping for earnings calls.
Does the author mean give the "JCs" more room to loot the company, for their own profit, out of sight of the shareholders?
Steve
No. of Recommendations: 1
allow executives to focus on long-term goals instead of worrying about hitting quarterly targets or prepping for earnings calls.
Puuullleeeaaase
Executives consider themselves kings. They skipped prince school.
Allow them? Hahahahaha, whose world do you think we are in?
If someone wants to do a job correctly, they can. No one is stopping them.
No. of Recommendations: 5
allow executives to focus on long-term goals instead of worrying about hitting quarterly targets or prepping for earnings calls.
This is the worst excuse I an imagine, as though a CEO has to take a lot of time rehearsing to talk about his own company . A legitimate excuse might be that the 90 day exercise doesn’t really produce anything of value - except mandated conversation within shareholders (a rather worthy goal, wouldn’t you say?)
But thinking this will help change CEO behavior as far as capital investment or long term planning is ridiculous. Corporations are like ocean liners; they have momentum, it takes a lot of time to turn them around; heck, it takes a lot of time just to get them to turn 10 degrees.
A CEO ought to be paid a nominal amount, and then be able to cash in based on vested stock in 3 to 5 years, because that’s when the results of the CEO-watch will become apparent. If one of them would choose to take more “nominal wage” upfront and less “stock later”, well that would send a pretty clear signal to investors as well.
“Ho ho ho, I’m sorry our results were so crappy this quarter, I spent too much time rehearsing for this presentation and not enough, you know, running the company.”
What will they think of next?
No. of Recommendations: 0
But thinking this will help change CEO behavior as far as capital investment or long term planning is ridiculous.
Again we need a discussion around studies on raising corporate taxation rates.
We need the heavy industry back in the US. We should be the global economic engine. Instead four years down the tubes.
No. of Recommendations: 2
“Ho ho ho, I’m sorry our results were so crappy this quarter, I spent too much time rehearsing for this presentation and not enough, you know, running the company.”
I would suspect it's more a matter of the "JCs" not wanting to be asked questions they don't want to hear. I have related, before, how several of the honchos I worked for wanted to live in an echo chamber, filled with yes-men. The fastest way to end your future prospects at the company was to say something they didn't want to hear. A CEO can go on bubblevision, and be reasonably sure the news actor will follow the script, only asking the questions the honcho wants to be asked. The CEO can't control the questions in a quarterly or annual meeting. I was at a Boeing shareholder meeting, years ago, when a question was asked, that then CEO Frank Shrontz visibly was uncomfortable with. Eliminating quarterly meetings has the same effect as the increasing trend of companies asking the SEC to let them ignore shareholder proposals, rather than putting them in the proxy: elimination of things the CEO does not want to hear.
Steve
No. of Recommendations: 6
I was at a Boeing shareholder meeting, years ago, when a question was asked, that then CEO Frank Shrontz visibly was uncomfortable with.
The best one was Robert Nardelli, a Welch protoge and acolyte, took over Home Depot and thumped his chest for quarter after quarter about “look at hall the great stuff I’m doing” (firing knowledgable workers and replacing them with cheap box openers, buying overpriced subcontractors, squeezing inventory so there were frequent stock outs, etc) which looked good for a while.
Then came a quarter with disastrous results, mostly because the mother ship had become so f-ed up, that he announced the numbers, took no questions, turned on his heels, and smartly left the room. Analysts, not to say shareholders, were astounded, and he was quickly cashiered.
Big exit payday of course, and he went on to wreck Chrysler after that. Getting rid of all those models where they weren’t #1 or #2 left them…with a minivan. He lasted 2 years at Chrysler, which is long enough if you’re really that bad.
No. of Recommendations: 1
The best one was Robert Nardelli,
How about divine intervention? At the Boeing meeting, there were curtains, hanging from tall poles, tall being maybe six feet, on each side of the stage where Shrontz and the other honchos were speaking. While Shrontz was struggling with that question,(I don't recall what the question was) the tension in the room was so think you could cut it with a knife. In the middle of all this, the curtains on the right side of the room fell off the poles. Without a word, well dressed, young, guys, hurried to rerig the curtain.
...he announced the numbers, took no questions, turned on his heels, and smartly left the room.
Typical "JC". I suspect that is what this push is all about, so those delicate flower "JCs" don't need to face questions that they can't control.
Steve
