GM CEO Ed Whitacre’s shakeup continues as Steve Girsky becomes vice chairman. Girsky’s rapid ascent, from a *mere* board member to one of Whitacre’s two top lieutenants (the other being recently arrived CFO Chris Liddell) represents the boss’s efforts to create a crisp, no-nonsense culture and eradicate the old woolly one. Girsky will remain on GM’s board, thus providing Whitacre with Girsky-ite allies among the directors and within the executive ranks. Girsky, who is 47 years old, is plain-spoken and wry, yet he’s also an optimist. These are traits General Motors needs as it scrambles to become a financially strong firm with a robust pipeline of desirable new vehicles.
Archive for February 22nd, 2010
Posted by Gabriella Stern
on February 22, 2010
Auto Industry, Corporate Governance, Management / Comments Off
Auto Industry, Corporate Governance, Management / Comments Off
Retailer RadioShack, which has kind of rebranded itself to be hip by calling itself “The Shack,” reported strong sales and earnings this afternoon. But a drilled down look reveals it was all about mobile phones. RadioShack said sales rose 4.7% (to $1.32 billion) and earnings were up 26% (to $75.7 million).
The company breaks down its same-store company owned sales into seven categories. The only categories that showed positive sales trends were two that are connected to mobile – the wireless category was up 56.4% (despite some not so good sales of GPS products). And the category it calls “service and other” was up 13.2%; it highlighted pre-paid wireless airtime sales.
Posted by Neal Lipschutz
on February 22, 2010
Central Banks, Credit Crisis, Credit Markets, Economy, Federal Reserve, Financial Markets, United States, Wall Street, Washington / Comments Off
Central Banks, Credit Crisis, Credit Markets, Economy, Federal Reserve, Financial Markets, United States, Wall Street, Washington / Comments Off
The best communications device the U.S. Federal Reserve had to convince skeptical markets that its discount rate increase last week had nothing to do with the commencement of monetary policy tightening did not involve anything anyone said.
It was Friday’s report that the core consumer price index in January fell 0.1%, the first decrease since December 1982. With a still fragile and jobless recovery and no current inflation, the Fed was going to tighten?
Not to take anything away from the chorus of Fed officials who took to the public rostrums to dismiss the increase in the discount rate to 0.75% from 0.50% as nothing more than a small return to a more normal spread of that rate above the federal funds rate. Technical, technical, technical. It was just more evidence our capital markets are getting back to being able to stand on their own feet.
Posted by Neal Lipschutz
on February 22, 2010
Bank Rescue Plan, Banks, Compensation, Executive Compensation, Government, United Kingdom / Comments Off
Bank Rescue Plan, Banks, Compensation, Executive Compensation, Government, United Kingdom / Comments Off
The top bankers at Big British financial institutions appear to be more responsive than their American counterparts to public outrage about large bonuses, especially for those banks that received government aid.
Our Newswires colleague Patricia Kowsmann inLondon reports Lloyds Banking Group Chief Executive Eric Daniels waived his 2009 bonus. He was entitled to 2.3 million British pounds despite the company planning to report a net loss for the year and being 41%-owned by the British government.
Stephen Hester, who heads Royal Bank of Scotland, 84% owned by the U.K. government, will turn down a 1.6 million bonus, Kowsmann reported.
Perhaps more surprising was the bonus turn down by Barclays CEO John Varley. That bank has thrived and taken no government assistance.
Might simply be a case – rare as it seems - of true long-term thinking in the executive suite. The Barclays restraint should serve the bank well with an angry public.
Significant bonuses at loss-making institutions are no doubt harder to understand.
Posted by Neal Lipschutz
on February 22, 2010
Bank Rescue Plan, Executive Compensation, Treasury, United States, Wall Street, Washington / Comments Off
Bank Rescue Plan, Executive Compensation, Treasury, United States, Wall Street, Washington / Comments Off
“This is not Bolivia,” U.S. Treasury Secretary Timothy Geithner is quoted by The Wall Street Journal as having said when pushed by others to not honor contractually mandated bonuses to certain employees of American International Group.
It’s a good quote and a better policy. Give Geithner credit for a willingness not to bend to populist demands. In the end, upholding contracts and reinforcing that the U.S. is a place where legal agreements are honored even when they become wildly unpopular and perhaps even grossly unfair is much more important than scoring an immediate political point or two.
The profile today of Geithner in The Wall Street Journal by Deborah Solomon is well worth reading. One interesting point: despite the criticism he’s endured in the role, largely on Capitol Hill, a significant part of the U.S. population doesn’t know who Geithner is.
