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Boards at Their Best
Information and Insights for Organizational
Governance
Sunday,
October 19, 2008
A Ring of the Bell
Market mavens say they don't ring a bell at market tops or bottoms. Do you
believe that? I don't.
Can't you point to past instances where a little voice inside your head
said, "This is a decisive moment in a trend line"?
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James Kristie
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James Kristie is
the editor and associate publisher of Directors & Boards, a
quarterly journal and a monthly online newsletter (the
e-Briefing) of high-level leadership, governance, finance,
legal, and strategic issues. He has been editor since 1981, and
associate publisher since 1991. Directors & Boards has as its
primary readership public-company directors, chairmen, CEOs, and
other senior management and board advisers. It is owned by MLR
Holdings LLC, a Philadelphia-based media investment firm.
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Here was one for me: When
Blackstone went public last year. I don't think I was alone in thinking
that, "Yes, this is some kind of a market top." What beautiful timing for
the Blackstone partners. This was actually a second dip at the timing well
— how about their great timing in buying and then immediately selling off
huge chunks of the Equity Office building portfolio earlier in the year?
What would their fortunes look like now had they held onto that real
estate for even a few additional months.
I don't begrudge them their
timing. I begrudge not acting on that little voice inside my head.
I just listened in to what might well be a ring of the bell on executive
pay.
My pastor at Sunday services, for the first time ever from this pulpit,
railed against the unjust compensation practices of corporate America.
When a conservative minister turns from Biblical passages for his weekly
sermon to lash out at the salaries and bonuses given to company leaders
who have led the nation into deep doo doo ... well, I hear bells — and
it's not the usual melodious ringing from the parish steeple.
Forget Barney Frank. Forget 'say on pay.' Forget Hank Paulson and his
TARP-induced strictures on exec pay. When the clergy of America become so
incensed over the unfairness of board-approved pay for failure that they
feel an obligation to use the pulpit to express outrage, then we've hit
some kind of a trend point.
I don't know if you'd describe it as a top or a bottom. A top in the
inequities of pay practices. Or, a bottom in the sense that the craziness
finally ends here with the stock market crash of 2008 and that there is no
way but up for boards in crafting pay plans that truly reflect
management's performance.
But I say a bell has rung.
Posted by James Kristie
at
11:26
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