By David Wismer
Markets were essentially flat this week as traders awaited a big data flow next week, but it was a bull market for Royal Baby news. …read more
Source: FULL ARTICLE at Forbes Markets
By Tim Worstall, Contributor This little speech that Sir Martin Sorrell (head of WPP, one of the world’s largest ad agencies) gave contains a couple of interesting little factoids. The first one is obvious, if one is looking at what the businesses actually do, rather than how they do it. The other is something of a crossing point: where Google looks likely to pass News International in terms of traditional media spending.
Source: FULL ARTICLE at Forbes Latest
By Tony Reading, The Motley Fool
Filed under: Investing
LONDON — Management can make all the difference to a company’s success and thus its share price.
The best companies are those run by talented and experienced leaders with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.
In recent weeks, I’ve assessed the boardrooms of five companies within the FTSE 100: Antofagasta , Fresnillo , Rexam , Weir Group and WPP . Today I am going to summarize what I found.
Five FTSE boardrooms
I analyze management teams from five different angles, giving each a score out of five to make a maximum score of 25. Here’s my overall assessment:
|
|
Repu- |
Perform- |
Com- |
Remun- |
Share- |
Overall |
|---|---|---|---|---|---|---|
|
WPP |
5 |
4 |
5 |
1 |
4 |
19 |
|
Rexham |
4 |
4 |
4 |
3 |
4 |
19 |
|
Weir Group |
2 |
4 |
4 |
3 |
4 |
17 |
|
Antofagasta |
3 |
3 |
1 |
2 |
3 |
12 |
|
Fresnillo |
4 |
3 |
0 |
3 |
1 |
11 |
Top spot
WPP and Rexam share top spot. WPP‘s chairman Sir Martin Sorrell is so well-known that its website barely bothers to provide a CV. Sir Martin created the company from virtually nothing by a series of audacious takeovers, and it’s now one of three global players.
WPP also boasts a former U.S. ambassador to the U.K. and deputy White House chief-of-staff as its chairman. It’s an impressive looking board all round. But Sir Martin‘s generous pay package-£13 million last year-is a sore point with investors.
Turnaround
Fewer investors are familiar with Rexam‘s CEO Graham Chipchase. But he’s done a remarkable job of turning the packaging company around since he became CEO in 2010, a job dubbed a “poisoned chalice” at the time by one analyst. Shares have risen 70% on the back of asset disposals, cost cutting, and moves into emerging markets.
Weir has two members of the House of Lords on its nine-strong board, though Chairman Lord Smith of Kelvin is perhaps more occupied with his chairmanship of the much-bigger SSE and the new Green Investment Bank. Weir’s shares have tripled since Keith Cochrane became CEO, though an earlier less successful spell at Stagecoach, together with a finance director in his first commercial role, gives the company a slightly under-average score for directors’ reputation.
Miners
The two South American miners in the FTSE 100 score poorly. Both companies are family run firms but that doesn’t necessarily equate to poor corporate governance, as companies such as Schroders and ABF testify.
Jean Paul Luksic, whose family owns 65% of Antofagasta, is its executive chairman. That means there’s no separation of chairman and CEO roles, and no finance director with fiduciary responsibility to shareholders. The recently appointed CEO of Antofagasta’s operational subsidiary is well-respected, but not being on the main board his first responsibility is to his employers, not shareholders.
Governance is even more an issue at Fresnillo, where its parent mining company Peñoles owns 77% of the shares and is thus able to enforce special company resolutions over the heads of minority shareholders. Fresnillo’s chairman owns and controls Peñoles. Again there is no finance director, …read more
Source: FULL ARTICLE at DailyFinance
By Tony Reading, The Motley Fool
Filed under: Investing
LONDON — Management can make all the difference to a company’s success and thus its share price.
The best companies are those run by talented and experienced leaders with strong vested interests in the success of the business, held in check by a board with sound financial and business acumen. Some of the worst investments to hold are those run by executives collecting fat rewards as the underlying business goes to pot.
In this series, I’m assessing the boardrooms of companies within the FTSE 100. I hope to separate the management teams that are worth following from those that are not. Today, I am looking at WPP .
Here are the key directors:
|
Director |
Position |
|---|---|
|
Philip Lader |
(non-exec) Chairman |
|
Sir Martin Sorrell |
Chief Executive |
|
Paul Richardson |
Finance Director |
|
Mark Read |
Strategy Director |
Chairman since 2001, Philip Lader is the former U.S. Ambassador to the U.K., prior to which he served as Bill Clinton‘s deputy chief of staff. A lawyer, he once worked for Sir James Goldsmith and can probably open as many doors as any FTSE chairman.
Less is more
WPP‘s website contains brief biographies of each director — except it has just a two-line CV for the CEO, informing investors that Sir Martin Sorrell joined WPP as CEO in 1986 and is a non-exec of Formula One and Alcoa.
That clever bit of marketing underlines that Sir Martin Sorrell is one of Britain’s best-known businessmen. Last year, he was named Britain’s most admired leader by Management Today.
Of course Sir Martin didn’t just “join” WPP. After seven years as finance director of Saatchi and Saatchi, he bought into the corporate shell Wire and Plastics Products and turned it into a holding company for a collection of advertising and PR agencies, with audacious hostile takeovers of J Walter Thomson and Ogilvy and Mather.
More for less
While WPP has grown to be one of the three big global players in the advertising market, and Sir Martin is recognized as an eminence grise of the sector, shareholders have had a more variable experience over the course of his tenure. The group was nearly bankrupted by the Ogilvy and Mather acquisition.
Sir Martin‘s remuneration package, worth 13 million pounds last year, came under fire in the Shareholder Spring with 60% of shareholders voting against the remuneration report. He has built up 200 million pounds’ worth of shares.
Long serving
WPP‘s other executive directors are also long serving. Paul Richardson has been finance director since 1996, after three years as treasurer. A chartered accountant, he was deputy treasurer of Hanson and has described himself as “technically very strong” in tax and treasury, complimenting Sir Martin‘s M&A skills.
Mark Read has been with the company since 1989, apart from a seven-year stint as a Booz Allen consultant between 1995 and 2002. He’s been on the board since 2005.
WPP‘s non-execs are drawn from around the globe and have an impressive array of diverse backgrounds.
I analyze management teams from five different angles to work out a verdict. Here’s my assessment:
|
1. Reputation. Management CVs …read more |
