Admin - Mahony Partners

Apr

2012

Throwing Softballs at Henry Kravis

Financial Services, Taking & Managing Risk

I must have missed this Reuters interview with KKR co-founder Henry Kravis last week, which isn’t too surprising because it didn’t make many waves. Based on an interview with Reuters Editor-in-Chief Steven Adler, it is the very definition of a puff piece. The article barely touched on whether Kravis believes the favorable tax treatment enjoyed by private equity should be allowed to continue: Kravis didn't say what he thought the tax rate on carried interest should be, though the company has said many times that an increase in the tax rate would be negative for the firm and its inve... Read More

Apr

2012

The Three Things Groupon Got Right

Crisis

Friday was a horrible day for investors in Groupon. The stock tumbled 6 percent on news that the company would restate it earnings after underestimating customer refunds, which led its auditor to declare the company had a material weakness in its internal controls. That kind of news is never welcome, and Groupon’s management has a lot to do to win back investor confidence, but at least it didn’t compound its problems by trying to hide bad news. I give the Groupon investor relations staff high marks for its handling of this episode. Here’s what they got right: F... Read More

Mar

2012

A Damage-Control Weekend for BATS and Jon Corzine

Crisis, Financial Services

It was a busy weekend for damage control, with two examples of executives who tried to regroup after enduring very bad news. First, there was an effort by former MF Global CEO Jon Corzine to counter a memo that emerged late last week that said Corzine authorized the transfer of client monies to J.P. Morgan. The memo’s contents, first reported by Bloomberg, would appear to contradict Corzine’s sworn testimony before Congress that he did not approve such actions in the chaotic, final days of the firm. Corzine’s team (presumably led by his lawyers) pro... Read More

Mar

2012

Liam McGee Still Needs a Communication Strategy

Crisis, Financial Services

Hartford Financial CEO Liam McGee on Wednesday announced plans to break up the company, largely along the lines recommended by hedge-fund activist John Paulson, whose funds own about 8.5% of the insurer. It looks like McGee never put up a serious effort to counter Paulson’s recommendation to separate Hartford’s property and casualty insurance business, despite saying such a split faced regulatory and market “challenges.” In an investor presentation Wednesday, McGee did a pretty good job of describing t... Read More

Mar

2012

Was the New York Times at Fault for its Handling of Greg Smith’s Letter?

Crisis, Financial Services

Now that we are in day two of the Memo that Shook Wall Street - the most famous resignation since Jerry Maguire’s “mission statement” – it’s worth asking whether the New York Times has anything to answer for in this episode. Landing a prominent article on the Times op-ed page doesn’t happen overnight. Unlike the news pages, which are designed to cover breaking news quickly, an op-ed takes several days if not weeks to produce. There’s internal bickering among the Times’s editorial-page editors over which issues and writers will appear on its coveted pages. Then there’s usually a bit of trimming and primping - usually without the writer’s involvement - as the submitted piece gets ready... Read More

Mar

2012

Welcome to Goldman Sachs, Mr. Siewert – Update

Crisis, Financial Services

In an earlier post, I suggested that Goldman send a note to its employees to respond to Greg Smith’s public resignation letter. It appears my advice was taken. Goldman chiefs Lloyd Blankfein and Gary Cohn did indeed send a memo (perhaps I'll send them a large bill). It was very well done. Here’s why: It used data, not opinion. Goldman was able to cite its employee survey data to demonstrate widespread support for ... Read More

Mar

2012

Welcome to Goldman Sachs, Mr. Siewert

Crisis, Financial Services

The public resignation letter by Greg Smith, a Goldman executive, is lighting up the blogosphere. It’s certainly not the way Jake Siewert imagined spending his first day on the job as head of communications. As a candid, personal confession from a Goldman insider, the letter is very damaging. It counters the notion that Goldman has been a united force, its p... Read More

Mar

2012

Waiting for Bob Diamond’s Bonus, Part 3: The Reckoning

Financial Services, Taking & Managing Risk

Barclays announced Bob Diamond's pay package this morning when it filed its annual report. As expected, the news media is pouncing on not only the bonus, but the bank's poor performance and regulatory woes. Here's the FT's take: "While overall pay is lower this year – largely because of a sharp fall in profits at Barclays’ investment banking division – it is nevertheless likely to stir up the debate around banker bonuses. "The revelations follow a difficult few weeks... Read More

Mar

2012

The Financial Press Before the Crisis – and After

Media

I attended a panel Wednesday night at The Columbia Journalism School that asked whether the financial press failed the public by overlooking issues that led to the financial crisis. (The event was co-sponsored by Public Business Media and the Columbia Journalism Review.) The genesis of the event was an Read More

Mar

2012

Waiting for Bob Diamond’s Bonus – Part 2

Financial Services, Taking & Managing Risk

It looks like this could be the week when Barclays reveals the compensation package for CEO Bob Diamond, according to reports in the press. The reports speculate on the likely amount he’ll be paid, while revisiting all the negative themes about bank pay, performance and risk. Unfortunately for Barclay's, there is little it can do but wait until the figures are released. Until then, its open season for reporters, comment writers, bank analysts, governance watchdogs and other pundits. Barclays could have avoided this ugly scene by a... Read More