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Recommended Reading - Is Jamie Dimon the Next to Fall?, The Daily Beast

2009-01-05 17:00:29

Don't believe everything you read.  Charlie Gasparino of CNBC wrote a story that appeared in Tina Brown's Daily Beast indicating that Jamie Dimon the CEO of JP Morgan Chase, and one of the so-called hero CEOs during the financial crisis, may himself be in trouble.  Gasparino examines many of the problems JP Morgan Chase is beginning to face as well as some of the comments Dimon has made to the press that might come back to hurt him.  

Jamie Dimon is in the hot seat. You wouldn’t know from the endless glowing press accounts he’s received for steering JP Morgan Chase fairly clear of the sub-prime debt crisis that has already taken out two firms—Bear Stearns and Lehman Brothers—and forced the federal government to bailout the once mighty Citigroup with billions in aid and other measures. 

 

But Dimon is feeling that heat, nonetheless, from analysts, who believe his firm will post a lost this quarter, the first since he became CEO in 2006; from fellow CEOs, who believe he took advantage of competitors during the height of the financial crisis in mid-September; and now even some of his own board members, who believe their straight-talking CEO spoke a little too straight in a recent CNBC interview when he described in graphic terms the problems facing JP Morgan and the rest of the financial business. Following Dimon’s remarks, which he then repeated in a speech, the Dow Jones Industrial Average fell nearly 200 points, and shares of JP Morgan were among the biggest losers, tanking nearly 10 percent. 

 

... Yet for all of his acclaim, skill, and accomplishment, Jamie Dimon is set for a fall. Not a fall on the scale of Lehman Brothers’ Dick Fuld or Bear Stearns’ Jimmy Cayne. But a fall that will put into question his current status as the King of Wall Street.

 

People close to Dimon tell me he’s well aware of the fact that his image is about to take a major hit along with the financial performance of the bank—and he’s preparing for the worst. He’s now turning down just about every interview request (including one with The Daily Beast; he declined to comment for this story).

While Dimon's firm may be in for some problems, I see no credible reason at this point to indicate his position is at great risk or that he will take a serious hit to his management finesse.  Read the piece and decide for yourself.

Quarterly & Annual CEO, CFO and C-level Change Comparisons 2005 - 2008

2009-01-05 15:23:28

Liberum has just completed a comparison analysis of quarterly and annual management changes for CEOs, CFOs and all C-level management changes (from board of directors titles down to vice presidents). The most surprising information culled from the analysis relates to declining levels of management change that took place during 2008, particularly in the last three quarters when compared with the same quarters in 2007 and 2006. While the U.S. and Canadian economies have entered a recession in 2008 most companies have been reducing overall employment and expenses. The employment reductions have not in general applied to top level management. While 2008 saw a large number of high profile CEOs and CFOs leave their positions, particularly in the financial sectors, overall this trend did not apply to the majority of corporations. As we move through 2009 we anticipate an increase in top level executive changes. Below are three graphs that comprise quarterly and annual changes for CEOs, CFOs and all C-level executives. The information has been derived from Liberum's Management Change Database. For more detail on the totals, please contact Liberum's director of research.

Recommended Reading -Citigroup Shares plunged as Shareholders Suffered 'Figurehead'

2008-12-30 11:54:02

Lisa Kassenaar wrote an insightful piece for Bloomberg (December 29th) that examined how corporate boards, even in the era of Sarbanes-Oxley, have often failed to live up to their responsibilities.   Kassenaar wrote,

As the credit crisis gripping the global economy stretches into a third year, corporate directors are facing a storm of scrutiny for the instances when they’ve failed to show up -- to sound the alarm as imprudent investments piled up at Citigroup or Bear Stearns Cos., for example, or to right the strategy at General Motors Corp. as the company was losing touch with car buyers’ tastes and burning through cash...

... Nell Minow, who has been agitating for better corporate governance for two decades, says directors remain too friendly with their executives. Minow, who founded the Corporate Library, a research group in Portland, Maine, wants companies to make it easier to replace directors by giving shareholders a vote on every board member every year.

The gist of the piece is a battle remains between corporate governance advocates and shareholders versus executive management and boards.  Read the piece for yourself and make up your mind on what side you stand.  I remain in Minow's corner.  It is likely the new Obama administration will implement new regulations upon boards and management that come closer to corporate governance advocates.

Recommended Reading - The Best CEOs You Didn't Know, Forbes

2008-12-23 15:58:36

Matthew Kirdahy wrote a piece in Forbes yesterday that examined a number of highly successful CEOs not generally covered by the financial press.  Kirdahy focused on eight CEOs:

John B. Hess, HessJohn B. Colson, Quanta Services  Robert Parkinson, Baxter International   David A. Smith,  PSS World Medical  Richard Leeds, Systemax  Paul Dykstra, Viad  Dean Foate, Plexus  William Sullivan, Agilent Technology  

The CEOs listed and their companies are worth a quick read.

Recommended Reading - The fallen giants of finance, Financial Times

2008-12-23 12:39:48

Yesterday the Financial Times ran an interactive audio/video piece on the many financial CEOs that took it on the chain over the last year.  It's a sad piece but worth a quick look-see.