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truelight
truelight
12/5/2012 | 2:37:33 AM
re: Marconi Execs Collect on Turnaround
Hey this is "light Reading" take your dunken doughnuts on to another message board.....but I see you pluging ADTRAN in there - come on take a closer look at the CEO - have you ever heard the guy speak on a investor conference call ? He's getting every penny he can and more than his share and then some but I do like the stock rise over the recent months.
sevenbrooks
sevenbrooks
12/5/2012 | 2:37:26 AM
re: Marconi Execs Collect on Turnaround

You guys asked about CEOs and claimed they were all horrible human beings. Mark Smith is not a horrible human being and his company is executing well. I have met him and listened to him on conference calls (I do not work for Adtran).

My point is that not all CEO pay is out of line. Some CEO pay is. Bonuses are separate than normal pay and you are treating them as the same thing. For example, suppose you gave all the players on a Baseball Team a $1M bonus for winning the World Series. Good idea or bad idea? Thats my point with Marconi. The executives actually had to pull of goals set for them by the people that own Marconi. By pulling off those goals, they got rewarded. If they had not pulled them off, no reward. I differentiate this from say the Lucent bonuses paid during a time of horriffic execution.

Now if you want to complain about salaries, that is a different question. Many Bay Area Senior Engineers are making 100k+ salary. There CEOs make say 4x that. The biggest companies have a much bigger delta. Of course then they are leveraging 10,000+ people to build something.

The biggest issue is not the salaries nor the bonuses. It the continued support and pay by BoDs of management teams that are clearly bad. The expenditure of shareholder money tilting at windmills (*cough*Corvis*cough*). That is the issue to me and the BoDs need to be held accountable for it.

seven
steve
steve
12/5/2012 | 2:37:25 AM
re: Marconi Execs Collect on Turnaround
Ok, Ok, flame me for being slightly off point, but in the context of this thread this is an interesting article

Reuters
Five Harvard money managers collect $101 million
Thursday January 22, 8:32 pm ET
By Tim McLaughlin

BOSTON, Jan 22 (Reuters) - Harvard University's treasurer on Thursday defended an "extraordinary" $101 million payout in fiscal 2003 to the school's top five money managers, calling it a fortunate problem.

"We should remember ... that we are -- in a very real sense -- fortunate to have to confront this problem," Harvard Treasurer Ronald Daniel wrote in a letter to alumni. "The extraordinary bonuses in question would not exist if not for extraordinary investment performance."

Maurice Samuels and David Mittelman, two senior portfolio managers, collected an eye-popping $35.1 million and $34.1 million, respectively, during the fiscal year that ended June 30. The two men work for Harvard Management Co., an internal investment firm that manages the university's endowment.

The three other best-paid portfolio managers received a total of $31.4 million, Harvard said.

Compensation paid out in a single year is based on performance over a several-year period, Harvard said. All five portfolio managers generated returns that trounced their benchmarks.

"Managers do not receive bonuses simply because the markets went up," Harvard Management said in a statement.

The five managers generated $2.5 billion of value-added performance in their portfolios, or gains above their relative benchmarks over a five-year period, Harvard said.

A portfolio of foreign fixed-income investments, for example, posted a five-year annualized return of 20.5 percent, compared to a relative benchmark return of 6 percent, Harvard said.

Harvard Management said the full cost of managing the assets over the past decade has been less than 50 percent of what it would have cost to get an equivalent performance from an outside hedge fund.

Harvard said portfolio managers receive a relatively modest base salary that is less than $400,000 a year. They also can receive a "neutral" bonus if their performance matches an appropriate benchmark.

The big payday, however, comes through an incentive bonus.

Managers must significantly outperform benchmarks to qualify for incentive bonuses, Daniel said. And each year, significant amounts of the incentive bonuses are withheld because they can be forfeited if future performance is subpar
PhotonGolf
PhotonGolf
12/5/2012 | 2:37:25 AM
re: Marconi Execs Collect on Turnaround

Seven -

A well stated argument. Hindsight can be tough on risk-reward decisions and not everyone (most of the rank and file) is up for it.

Eg .. we repriced options at my company - you had to turn them in, getting them back in six months without losing vesting - and some folks opted not to turn them in! That sets the bar pretty low, you know?!?

Any of the development guys who have the skills can migrate into management and pursue higher risk reward compensation packages. Yes, I agree there are bad seeds out there, but the system works and those of us who have invested in this stuff understand the value of a good management team.

- G
truelight
truelight
12/5/2012 | 2:37:23 AM
re: Marconi Execs Collect on Turnaround
Seven don't be so melodramtic - nobody said the CEO's are horrible human beings - just greedy sons of B****.

Try living in the Bay area for less than a 100K with a family it's tough. But you can probably live in Huntsville, AL with Mark for less than this an do well, and pick up a real accent to hoot.


technonerd
technonerd
12/5/2012 | 2:37:18 AM
re: Marconi Execs Collect on Turnaround
but I see you pluging ADTRAN in there - come on take a closer look at the CEO - have you ever heard the guy speak on a investor conference call? He's getting every penny he can and more than his share and then some
I only wrote that Smith is an ethical guy and that Adtran has always made high-quality products and, to my knowledge, followed ethical sales practices.
namrepus
namrepus
12/5/2012 | 2:37:18 AM
re: Marconi Execs Collect on Turnaround
Remember Parton did not cause the problem, he was brought in after the CEO/team cratered Marconi.


What???
Maybe you should talk to some of the people that used to work for FORE Systems or Reltec. Parton was part of the exec team and a huge part of the demise of Marconi. He was the exec that was recommending the purchases and the over spending for FORE Systems and all the other technologies companies. The reason why the north america companies failed is that the UK management had no idea how to sell to the N. America service providors and still do not.

In your analogy is it that not the direct result of CEO?
Great Leadership should know one of their largest markets right?

If he could get the N. America markets right maybe he would get $400 Million?

Thanks Mike

technonerd
technonerd
12/5/2012 | 2:37:17 AM
re: Marconi Execs Collect on Turnaround
You guys asked about CEOs and claimed they were all horrible human beings. Mark Smith is not a horrible human being and his company is executing well. I have met him and listened to him on conference calls (I do not work for Adtran).

My point is that not all CEO pay is out of line. Some CEO pay is.

I have been as aggressive as anyone on this board in condemning the excesses of the bubble and the fact that they have not come even close to being corrected. But I do agree that "not all CEO pay is out of line," and would point to Smith at Adtran as an example.

When Adtran hit a bump after the bubble -- much less of a bump than everyone else, I might add -- they imposed a pay cut. The top managers including Smith shared in the pay cut. They made the first layoffs in the company's history. The pay cuts have since been restored and there have been no more layoffs. This might be related to the fact that Adtran has always been in the business of making products, not press releases. If you buy something from Adtran you can bet your ass it will work the way it's supposed to.

Smith is one of those inspirational leaders who gives CEOs a good name. If business were full of Mark Smiths we would have never had the bubble of the 1990s. He deserves his wealth, in my opinion. And no, I'm not their employee and I don't own any of their stock. I have simply been a longtime admirer of this company, its people and its products. They are truly extraordinary.

Yes, Smith has a deep southern accent. So does John Chambers, and I've never heard anyone complain about it. Oh, and by the way, if Smith has been harder to understand in recent years it's because the man had throat cancer and went through very difficult surgery, radiation treatment, chemotherapy and rehabiliation. He was back on the job before anyone expected, including his doctors. I really wish there were more Mark Smiths in the world, especially in the U.S. corporate world. Alas, he's an exception to the rule.
PO
PO
12/5/2012 | 2:37:12 AM
re: Marconi Execs Collect on Turnaround
"Yes, Smith has a deep southern accent. So does John Chambers, and I've never heard anyone complain about it."

I believe Mr. Chambers is a West Virginian by birth. And as memory serves, quite proud of it.

A search on 'Ask Jeeves' confirms this but also turns up an odd mention (credited to Inside Business, July '99) suggesting he's from Cleveland (!?).

Of course, my little comment here is neither germane nor useful: forgive me. And have a great weekend.

Ref:
http://www.chiefexecutive.net/...
http://www.magnuminc.com/ib1.h...
whyiswhy
whyiswhy
12/5/2012 | 2:37:11 AM
re: Marconi Execs Collect on Turnaround
More power to anyone able to get anything (on a personal level or otherwise) in this crappy market. I don't think anyone in their position would turn down the money or give it back to the investors. And make no mistake about that: it would not go into the company R&D fund or bonus checks for the people who got them there.

-Why
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