Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: The Duke of URL© who wrote (51195)	3/25/1998 11:34:00 AM
From: Burt Masnick	Read Replies (2) \| Respond to of 186894

Here are the fabulous six (from Fortune's Web Page). Advanced Micro Devices. Long one of the worst performers in the semiconductor industry, AMD has chosen a strategy to make strong men blanch: competing with Intel. Its K5 chip was a disaster, and its K6, being sold directly against Intel's Pentium, now carries virtually all the company's hopes. What worries investors is the directors' penchant for repricing CEO Jerry Sanders' stock options. When AMD stock has fallen below the options' strike price over the past 14 years, the board has repeatedly lowered that price, enabling Sanders to realize tens of millions in option gains over periods when the stock has actually declined. The board's message to Sanders: Don't worry, you'll clean up no matter what. Message to shareholders: You're betting on a guy who'll clean up whether you do or not. Apple Computer. Not just a bad performer, Apple was the absolute worst company for investors over the past five years in a ranking of 1,000 large U.S. companies by the Wall Street Journal. The reason is a board that failed shareholders on its two main duties, setting the right strategy and choosing the right CEO. Like AMD, Apple has also been a serial repricer of executives' stock options. About ten years late, the company recently added two heavyweight board members: Jerome B. York, former CFO of Chrysler and IBM, and Edgar S. Woolard Jr., former CEO of DuPont. These have been star performers; to what extent they can reverse Apple's remarkable destruction of wealth remains to be seen. Dow Jones. This longtime dog escaped the shareholder-value imperative because its main owner, the Bancroft family, didn't seem to care about performance--until last year. When FORTUNE revealed that family members Elisabeth Goth and William C. Cox III were losing patience, investor Michael Price bought a big stake and the stock finally took off, a performance kick for which top management and the board deserve zero credit. Like Apple, the company last year brought in a couple of potentially excellent directors: American Express CEO Harvey Golub and Pfizer CEO William C. Steere Jr. That's promising, though we still don't know why it didn't happen years ago and how h difference they'll be able to make. Occidental Petroleum. It took some doing for an oil company to post a negative return to investors over the past decade, but Oxy did it while carrying on the tradition of shareholder disrespect established by former CEO Armand Hammer. Last year's highlight featured the board's buying out CEO Ray Irani's seven-year employment contract for a breathtaking $95 million and then, having effectively paid him for the next seven years, giving him another contract worth at least $1.2 million a year. Nell Minow, a principal in the Lens investment fund, believes that among companies that have maltreated shareholders, Oxy is "the clear winner for both length and quantity of abuse." Ogden. The stock goes nowhere while the strategy goes everywhere: Ogden has been in child care, financial services, food services, aviation services, garbage disposal, and much else in the past decade; now it's into indoor theme parks. As an analyst once told Crain's New York Business, "This is a company that changes its strategy every three years. Why believe them now?" Blame one of the lowest-wattage boards around. Besides CEO R. Richard Ablon, its 15 members include Ablon's 81-year-old father; the company's lawyer; eight academics of various stripes, two of whom have consulting contracts with the company; and not one outside CEO. The chairman of the technology committee is 85. Reader's Digest. The worst performer in publishing over the past five years (average annual return to investors: -32%), this company suffers from a toxic governance setup: 71% of the voting shares are held by two charitable trusts, both of which are chaired by CEO George Grune. Who will hold his feet to the fire? No one,apparently. Last November he led the board in lowering the strike price on executives' stock options, including his own 212,000.