Blog - Mahony Partners

Dec

2011

Firing the CEO, Part 5: Glocer out at Thomson Reuters

Tom Glocer today became the latest CEO to be fired, in a year that has seen a score of corporate chiefs get the boot. Glocer, who has led Thomson Reuters since 2001, lost the confidence of the Thomson family, the company’s largest shareholder. Although billed as a retirement, it’s clear that Glocer was forced out after the Thomson family grew impatient with the slow pace of the company’s turnaround. Glocer will be replaced by the COO, Jim Smith,... Read More

Nov

2011

On air crashes and financial failures

Crisis, Financial Services, Friday Risk Reading

I happened to be reading Malcom Gladwell’s excellent book, Outliers, just as MF Global was collapsing, and I came across Gladwell’s discussion about another kind of crash – those involving airplanes. Gladwell offers an interesting observation about the causes of air disasters that could apply to the failures at financial firms, like MF Global, or the whopping trading losses reported two months ago at UBS. Gladwell shows that air disasters aren’t caused by a sudden, dramatic mishap but an accumulation of small errors rooted in poor communication: “The typical accident involves seven consecutive human errors. One of ... Read More

Nov

2011

The 4 reasons Jefferies beat the rumors

Crisis, Financial Services

Sure, the positive comments today from Meredith Whitney helped, but give Jefferies (NYSE: JEF) credit for handling its communications well in a very challenging environment. At one point the stock was down 20 percent as rumors swirled about the firm’s exposure to European sovereign debt and a downgrade by Egan-Jones. By day’s end, however, the stock had recovered nearly all its lost ground. Here were the four reasons Jefferies was able to beat the rumors: 1. They m... Read More

Nov

2011

The Herculean task of the Olympus committee

Crisis

It’s hard to square the statement by Olympus that its M&A transactions, which are now the subject of an independent investigation, “were in no way improper.” Presumably, the propriety of the deals is up to the investigation to determine. It’s precisely that sort of statement that makes investors skeptical about the company’s commitment to shedding light on these deals. As one fund manager told Reu... Read More

Oct

2011

MF Global’s Fatal Mistake

Financial Services, Taking & Managing Risk

At this hour, executives and MF Global are huddling with bankers and lawyers, trying to come up with a deal to sell the firm. It must seem like a surreal exercise, since just days earlier the firm held a solid investment-grade credit rating and a market cap of $620 million. Now, as its clients turn away and its cash evaporates, CEO Jon Corzine is running out of time and options.Selling a financial firm isn’t an easy process, particularly in an edgy market. Doing it in a couple of days is only for the foolhardy or the desperate. For MF Global,... Read More

Oct

2011

Credit Suisse campaign gets it right

Advertising, Financial Services

In a vast sea of sameness, Credit Suisse unveiled a distinctive global advertising campaign last month. It’s a good campaign and a good message. The financial crisis and the vilification of banks have made big-splash branding campaigns a rarity among financial firms. Most have scuttled advertising entirely or narrowed it to focus mainly on products. Others, notably Goldman Sachs, have used advertising as part of program to address public issues. (Like: “Why do we need high priced bankers, exactly?”) The Credit Suisse campaign is smart, thoughtful and well executed. And it emphasizes the c... Read More

Oct

2011

Crisis continues for Olympus

Taking & Managing Risk

The crisis at Olympus shows no sign of easing after the resignation of Chairman Tsuyoshi Kikukawa. Japanese regulators have joined investors in calling for a full explanation of payments Olympus made in connection with acquisitions it made in recent years. His resignation will not remove Kikukawa from the company, however. He remains a director on the board, a situation that critics say could allow him to continue to influence a board he’s managed very closely for year... Read More

Oct

2011

Olympus: Where were the auditors?

Taking & Managing Risk

The hole is getting deeper for Olympus and its chairman, Tsuyoshi Kikukawa. And his outside auditor, Ernst & Young, might find itself alongside him. A day after denying allegations by its former CEO, Michael Woodford, that it paid advisory fees of $687 million on a $2 billion acquisition, the company reversed itself and acknowledged that Woodward’s figures were correct. Analysts have downgraded the shares, and Goldman Sachs suspended its rating over doubts about the company’s accounting, calling into question the accuracy of Olympus’s books over the past several years. It hasn’t helped that three different company officials are speaking on the matter - Chairman Kikukawa, Executive ... Read More

Oct

2011

Firing the CEO: Olympus in focus

Taking & Managing Risk

The messy firing of Olympus CEO Michael Woodford provides another example of the challenges in communicating an executive exit. The Japanese camera and medical-imaging company last week fired Woodford, its first non-Japanese CEO, after less than a year. In announcing his dismissal, Olympus cited Woodford’s inability to work effectively with Japanese managers and chairman Tsuyoshi Kikukawa, the former CEO. Woodford countered today, ... Read More

Oct

2011

Give Bill Gross Credit

Financial Services, Taking & Managing Risk

Give credit (no pun intended) to PIMCO chief Bill Gross for dealing honestly with the underperformance of his flagship fund, PIMCO Total Return (PTTRX). In an open letter to investors released today, Gross is candid about the misjudgments that produced an anemic 1.09% total return for the fund so far this year, compared with a 5.56% gain for the iShares U.S. Aggregate Bond Fund (AGG), a comparable (but cheaper) i... Read More