Executive pay and corporate governance

[DanS]

Another area where the interests of shareholders are not being adequately considered is in advertising and promotions. The rationale for most advertising and promotion seems vague. See, e.g., the electric company putting its name on the side of a local stadium, major companies buying suites inside the stadium, etc. Executives want to feel important in their community and to act like corporate titans.

This is an area where GOOG shines, by the way.

[notyoueither]

Bump

[Saras]

Originally posted by DanS
One area where shareholders' interests are not being adequately considered is in M&A activities. It has long been known/thought that most M&A activity is a detriment to the buying company's shareholder value (would be interested in hearing information otherwise, though). Yet M&A activity continues apace.

We'll never know this 100% sure. The old KPMG and other studies can't compare their findings with alternate universes where deals under investigation DID NOT happen. (But you could call me biased.)

What is definitely certain that SOME M&A makes no sense at all, while some M&A that could make sense doesn't get done.

I think Icahn's blog is a good read on the OP subject matter.

[DanS]

What would be the criteria for M&A that serves the shareholder's interest?

[TCO]

NPV>0

[DanS]

Do companies often do deals where they think NPV<0?

[Japher]

Orphan drugs

[TCO]

"strategic acquisitions"

Actually even individuals just doing deals have an incentive to get deals done. (But conversely, if you don't incentivize them, you'll never overcome inertia to make any moves.)

[Saras]

Originally posted by DanS
Do companies often do deals where they think NPV<0?

No but they delude themselves into thinking that NPV>0.

[Fake Boris]

Originally posted by DanS
Another area where the interests of shareholders are not being adequately considered is in advertising and promotions. The rationale for most advertising and promotion seems vague. See, e.g., the electric company putting its name on the side of a local stadium, major companies buying suites inside the stadium, etc. Executives want to feel important in their community and to act like corporate titans.

This is an area where GOOG shines, by the way.

Buying suites in a stadium is terrific.

You can reward your best employees, and you can meet your business partners in informal contexts.

I've seen investment advisors who spend a huge part of their time playing golf with their clients. They say building ties with people is a major business necessity.

[Fake Boris]

Originally posted by KrazyHorse
The online office software is much more reasonable than OS online.

Sure, but the idea is that if you can do almost everything you need to with a browser, it matters much less which OS you're running. So basically we're not strictly speaking of an online OS.