re: Letter to Ed WhitacreNice analysis, Scott. During the boom, one magazine article referred to telecom execs as the Robber Barrons. That description now seems too kind.
To Mr. Whitacre's defense, one must say he has not ruined the company he was in charge. The typical telco exec receives outrageous benefits AND ruins the company. AT&T has gone, well, nowhere. To go nowhere is, as sad as it may sound, an above average performance in our industry.
re: Letter to Ed WhitacreTo Mr. Whitacre's defense, one must say he has not ruined the company he was in charge. The typical telco exec receives outrageous benefits AND ruins the company. AT&T has gone, well, nowhere. To go nowhere is, as sad as it may sound, an above average performance in our industry.
re: Letter to Ed WhitacreCouple thoughts tumbled out a little later:
1. It's hard to point the finger at Whitacre. The real problem is the board that allows this nonsense to happen. I suggest reading warren buffet's letter to investors... one choice excerpt.
----------------- I mentioned last year that in my service on 19 corporate boards (not counting Berkshire or other controlled companies), I have been the Typhoid Mary of compensation committees. At only one company was I assigned to comp committee duty, and then I was promptly outvoted on the most crucial decision that we faced. My ostracism has been peculiar, considering that I certainly havenGÇÖt lacked experience in setting CEO pay. At Berkshire, after all, I am a one-man compensation committee who determines the salaries and incentives for the CEOs of around 40 significant operating businesses.
How much time does this aspect of my job take? Virtually none. How many CEOs have voluntarily left us for other jobs in our 42-year history? Precisely none.
2. As for taking risks- the investment community doesn't expect AT&T to be anything other than a dumb cash generating machine. In a way Whitacre is carrying out the wishes of his shareholders. It is a strategy devoid of risk. Whitacres job is to remove ALL risk to ensure the cash keeps flowing. Until of course, the flock of black swans land in the big reflecting pool outside HQ.
And he's guilty. AT&T's stock has been Whitacre's personal IRA -- and he's the only one seeing good returns.
ph
OZIP
Greed abounds!
--------------------------------
To Mr. Whitacre's defense, one must say he has not ruined the company he was in charge. The typical telco exec receives outrageous benefits AND ruins the company. AT&T has gone, well, nowhere. To go nowhere is, as sad as it may sound, an above average performance in our industry.
Great letter but got to be fair and include Dividends in return calculations.
1. It's hard to point the finger at Whitacre. The real problem is the board that allows this nonsense to happen. I suggest reading warren buffet's letter to investors... one choice excerpt.
-----------------
I mentioned last year that in my service on 19 corporate boards (not counting Berkshire or other controlled companies), I have been the Typhoid Mary of compensation committees. At only one company was I assigned to comp committee duty, and then I was promptly outvoted on the most crucial decision that we faced. My ostracism has been peculiar, considering that I certainly havenGÇÖt lacked experience in setting CEO pay. At Berkshire, after all, I am a one-man compensation committee who determines the salaries and incentives for the CEOs of around 40 significant operating businesses.
How much time does this aspect of my job take? Virtually none. How many CEOs have voluntarily left us for other jobs in our 42-year history? Precisely none.
--------------------------
Summarized here.
http://www.nyquistcapital.com/...
2. As for taking risks- the investment community doesn't expect AT&T to be anything other than a dumb cash generating machine. In a way Whitacre is carrying out the wishes of his shareholders. It is a strategy devoid of risk. Whitacres job is to remove ALL risk to ensure the cash keeps flowing. Until of course, the flock of black swans land in the big reflecting pool outside HQ.
31 comments and counting, thanks to yours truly!