Dennis Carey Helps Insure Smooth Corporate Leadership Succession
No matter what the reason the leadership of a corporation must change, the board of directors of the corporation can feel secure that Dennis Carey will help make the transition process smooth and seamless. Mr. Carey understands that today’s corporate board feels that it is their basic fiduciary responsibility to ensure the continuity of leadership on behalf of their stockholders. Dennis Carey expertly guides them through the transition until the perfect match is made between the corporation and its new leadership.
As Mr. Carey succinctly summarizes,
“The corporate boards that take on a systematic, predictable and transparent process in choosing the next leaders of the organization build stronger cultures, clarify the company’s strategy and deliver value to all stakeholders, including employees.”
Dennis Carey‘s Role in Corporate Power Transitions
Due to the structure of corporations there is a built-in problem of separation of management of the corporation from its ownership. The board of directors evolved as a body which oversees management on behalf of the residual equity owners.
It is inevitable that leadership of the management of the corporation will change, whether due to poor performance, tragedy, corporate merger, takeover or simple retirement. The question then becomes, “Will the board be ready to handle this change in the best possible way so that all parties come away from the process stronger and in a position to take the corporation to the next level?”
Dennis Carey is there to make sure the board navigates through this sea change, unscathed and positioned towards a successful future.
Urging an Activist Shareholder to Get Beyond Making Headlines
By Dennis Carey
He was called a corporate raider in the ‘80s. He has succeeded in rehabilitating his image as an activist shareholder today and has become one of the most successful septuagenarians using the new media in a compelling blog. Surely, he can contribute in other ways in helping to solve some of the most challenging issues in these tough economic times.
I’m talking about Carl Icahn. He is an American success story: He grew up poor in Queens, was smart enough to garner an education at Princeton University, dropped out of medical school, joined the army and began his career on Wall Street more than 50 years ago. Now ranked No. 20 on the Forbes list of wealthiest Americans, Icahn is a product of capitalism and the American free enterprise system. He says he’s different from other businessmen in that he “made all this money and kept it.”
Now that Jerry Yang has agreed to step down as CEO of Yahoo, Mr. Icahn seems to have “won.” In addition, he was the featured Weekend Interview in The Wall Street Journal (11-15-2008) giving voice to a number of typically bold pronouncements. While such thoughts may make good headlines, they do not appear helpful in bringing greater understanding about what’s been occurring in the business world.
He characterizes CEOs of failed companies as being off playing golf all day and ignoring shareholders. He makes sweeping statements about his ability to go in and run a company and “save 30 percent in almost any company because there is so much waste and mismanagement.”
While his statements in the Journal article are not new, the placement seems to give more credence to some sweeping and generally negative statements about CEOs, boards and corporate governance and the sad state of business affairs.
He rails at the lack of accountability in the corporate world. And those who received severance packages in the face of Wall Street’s collapse are worse than Marie Antoinette who met her fate at the guillotine.
Given that so many small investors are mystified and devastated by the global macro developments that have erased almost a third of the value of almost every company traded on any exchange, is this the greatest value that someone of Mr. Icahn’s stature can deliver? What is the value in fueling more emotion over the misplaced disappointment and rage that every investor has suffered?
Mr. Icahn admits that these are difficult times. In fact, he says that he has never seen a downturn like this, noting the depression in the debt markets, which has created such difficulty for corporations to raise new money.
At 72, Mr. Icahn has a lot of experience to help us manage through this global financial crisis. Instead, he has decided that making headlines and setting himself up as the hero for “the little guy.”
At this juncture, the U.S. and global economy need all the help it can get, including help from Mr. Icahn.
New York Times: Sometimes, an Outside Director is Comfortable in the Chief’s Chair
New York Times;
Sometimes, an Outside Director is Comfortable in the Chief’s Chair
By Verne G Kopytoff. New York Times. (Late Edition (East Coast)). New York , N.Y.: Nov 14, 1999. Pg. 3.4
“Hiring an executive from the board is not a practice that is embraced by every company,” said Dennis Carey
“Almost 9 out of 10 chief executives of Fortune 100 companies were promoted to the job from within the company,” Mr. Carey said.
The Yahoo Icahn Chapter – by Dennis C Carey
By: Dennis C Carey
Last week, it looked like the Yahoo leadership had turned the corner and was ready to move beyond the challenges of the past several months. The Yahoo/Microsoft/Carl Icahn saga had played out visibly and painfully in the media as Yahoo spurned Microsoft’s offer and dissident shareholder Carl Icahn began his own negotiations while calling for the ouster of Yahoo CEO and Founder Jerry Yang and board chairman Roy Bostock. In the height of the frenzy Yahoo stock hit a record $34, which fell quickly below $20 when the deal fell apart. Yahoo management seemed to recover by reaching an agreement in which Icahn and two members of his proposed directors slate were granted seats on an expanded Yahoo board. Yang and Bostock appeared to have emerged victorious from the annual meeting as they garnered 85 percent of the vote to retain their seats. Then, Boardridge Financial Solutions, a proxy voting intermediary for major investors, reported that had made significant errors in reporting the vote. Imagine the agony for Yahoo management when they announced after the market closed on August 5th that there were errors in reporting votes and that 33.7 percent of the shareholder votes were withheld for Yang, more than twice the opposition to his reappointment as in the first count.
It appears that what Carl Icahn started with his dissident campaign, other shareholders have joined the fray. Analysts are split over whether the recount was a symbolic embarrassment to the leadership or a new threat to its power.
The investor drama is likely to drag out for several quarters while Yahoo leadership tries to return to the serious business of managing its business. Bostock noted earlier that Yahoo was making progress in executing its strategy, “performing particularly well in light of the challenging circumstances.”
Challenging, to say the least. At a time when managing businesses to enhance shareholder value has been exceedingly difficult in today’s near-recession economy, Icahn’s actions proved to be a huge distraction for the company. Worse, he focused only on his agenda without portfolio, ignoring the larger interests of other shareholders.
I would encourage boards to be fiduciaries to ALL stockholders, and be careful not to negotiate one-off arrangements for minority shareholders. There simply aren’t enough board seats to go around if all shareholders take an adversarial position. In short, it is not good governance to bargain with board seats and further it is a troubling precedent to have a minority shareholder independently trying to facilitate a hostile transaction.
Yang said that the company is redoubling its efforts to driving “sustained, profitable growth for our stockholders.” Let’s hope that Jerry and his team get a chance to return to their business with their full attention and energy. I wish them well.
When Leaders Forget Human Capital
By Dennis Carey (full article here)
At the surface level, when a billionaire investor comes in and bids up a company’s stock price in anticipation of a merger, it would seem to be good news all around. However, too many deal makers focus entirely on the numbers, the synergies they anticipate, and the large payday and ignore how the news can impact employees. When star employees feel ignored, undervalued and not part of the future, they are likely to take their stock and cash out.
