I would phrase the proposal somewhat differently. The purpose of hiring an investment banker should be TO INCREASE SHAREHOLDER VALUE. A buyout or a spinoff or whatever could be done to make this company really grow.
This company has been on the average a 5-8 bill market cap company for the last 10 years. It is UNABLE to grow. Shareholder value has always been the LAST CONSIDERATION for the board.
FOr starters here is an example of what NOVLs board could do:
To: Terrapin who started this subject
From: EPS
Sunday, Feb 13, 2000 1:57 PM ET
Reply # of 1947
NYTimes 2/13/2000
Cashing In Gets Tougher at Tyco
Late last year, after questions about his company's accounting practices
and a big stock drop, L. Dennis Kozlowski, the head of Tyco
International, announced that Tyco would have to hit impressive financial
targets for executives to exercise future stock options.
The company took the step of tying options not only to Tyco's stock
price but also to its earnings. "That's very unusual," said Ira T. Kay, the
director of the executive compensation practice at Watson Wyatt & Co.
It also seemed aggressive: for Kozlowski and other senior managers to
exercise any of their new options, Tyco's stock price must reach at least
$53 -- or $75 to exercise them all -- up from $39.25 on Friday,
according to preliminary plans. Earnings per share and cash flow also
must double over the next three years.
Tyco hopes that these clauses will rebut accusations, first made by an
investment newsletter, that the company used misleading bookkeeping.
As a result, Tyco stock lost nearly half its value late last year. Now
Kozlowski, one of the most highly paid chief executives in recent years, is
betting that he can stay on that list by proving his critics wrong.
-- David Leonhardt |
