Forum Archive Index - May 2003

["Hans Van der Voorn" <vandervoorn@xtra.co.nz>]

Snoopy,

As point of clarification Selwyn Cushing was never a chief executive at
Electricorp, I believe he may have been the Deputy Chairman. Rod Deane was
in fact CEO before he went to Telecom, followed by Dave Frow. In terms of
Cushings comments at the time, I'm sure they weren't particularly prescient
but reflecting the views of a then monopoly organisation about to lose its
dominant position. And I don't think he's been proved right on the
electricity market either. I would suggest it's a case of too much
government owned involvement not too little.From that point he may be seen
in hindsight to have more misses than hits overall.

In terms of Ron Brierley, I think it's more a question of horses for
courses. Just because he is good at spotting value opportunities and
manouevring his way through them doesn't make him qualified the chair a
bank, which he patently wasn't.

Another interesting case of management is Greg Muir of WHS. My prediction
would be that WHS performance under his leadership will be significantly
less than under Stephen Tindall. Admittedly an easy call to make based on
the current shareprice.

Hans
----- Original Message ----- 
From: <tennyson@caverock.net.nz>
To: <sharechat@sharechat.co.nz>
Sent: Tuesday, May 20, 2003 12:40 PM
Subject: [sharechat] Executive Performance (was wri pgg wkl )


> Hi Barrel Scraper,
>
> >
> >
> > Interesting though the whole exec renume thing.
> >
> > Personally - I am happy for the exec to pocket exorbitant amounts of
> > money/ Options / Whatever....But it still has to be earned.......
> > consider this, What price would one give an exec that could
> > consistently double the companies share price over a five year
> > period?   A person like that ya would just have to rate..
> >
> >
>
> I'd like to turn that question about and ask:
>
> What makes you think that just because a company's share price
> doubles every five years that such success should be mostly rewarded
> by stuffing the pockets of the person at the helm?
>
> I am sure that there are some chief executives for whom the bulging of
> their pockets is well deserved.    However, for any outstandingly
> successful organization of reasonable size,  I feel that the contribution
> of the second and third tiers of management are often under-rewarded
> compared to the chief exec.
>
> >
> >
> >Couple of questions ,
> > Any favourite execs out there ? Do you think  "Back the winning
> > Jockey" is an interesting investment strategy to propose? To start the
> > ball rolling..I read a Ronald Brierly book that first started my
> > interest in the Stock Exchange and all things business....$$ and it
> > must be time to swot up on Dr Deanes current performance..
> > or has he retired ?  :-)
> >
> >
>
> No Dr Deane has not retired, and it must be remembered that Dr
> Deane was the principal driver behind Telecom's so far embarrassing
> foray into AAPT in Australia - not Theresa Gattung.  That is a fact that I
> think should be kept in the limelight.
>
> I know some people do follow their favourite executives.   I guess some
> feel they are a better judge of people than of financial facts.   I'm not
> going to say that 'following the man' is a bad strategy either.  But it is
> not one I choose to take.   As an example as to why I stay clear of this
> strategy, take the case of Jon Hartley.
>
> In 1998 Jon was chief executive of Brierley Investments and the heir
> apparent chairman to Sky City.    Since that time the performance of
> the former has been disastrous and the latter stellar.  How do you
> explain that?    Was Hartley a gross underperformer at BRY, who
> suddenly acquired superman like performance the minute he walked
> through the Sky City door?   You could make the same argument
> against Patsy Reddy who was involved with both companies at senior
> level at that time.
>
> Then we have the case of Sir Selwyn Cushing , the last chief executive
> of ECNZ who forecast the structural problems we experience today in
> the way the deregulated power market was designed.   Looks like he
> has been proved right, yet in his subsequent business dealings
> particularly involving Air New Zealand have proved disastrous.
>
> Then there was the case of Ron Brierley himself who had to be
> removed as chairman of the BNZ.    Yet somehow despite his
> 'incompetance', he seems to have made a success of GPG.
>
> I'd be very interested to hear from anyone who has made a 'follow the
> man' philosophy work for them.   But my personal experience is that
> adopting such a philosophy is far too risky.
>
> Having said that there is one company that I do hold because I really
> rate the management.  This is CHH.   I am really impressed with the
> 'thinking outside the square' culture that seems to be seeded within
> this outfit.  Splitting one very large business into a series of
> autonomous business units and nurturing new business ventures
> within the Carter Holt corporate umbrella is I think a master stroke.
> They have even challenged the accepted practice of how often and
> when to prune their trees.   All this makes their lumbering opposition
> Fletcher Forests look a very second rate outfit.
>
> However I am sorry to report my faith in CHH management has not
> been rewarded in any investment sense :-(
>
> >
> >
> >Anyway - that was just a few thoughts while digesting
> > Burger King.. hmm, wonder whats happening with Restaurant >Brands.....
> >
> >
>
>
> The way the share price has been bouncing around over the last year
> you might think a lot.  But if you look at the underlying management
> performance I don't have any disagreement with the way the business
> is being managed.  The main problem I have with RBD is that there is
> always a lot of marketing spin when the results are announced.   But
> you can learn to wade through that.
>
> SNOOPY
>
> disclosure: hold RBD
>
>
>
> --
> Message sent by Snoopy
> on Pegasus Mail version 4.02
> ----------------------------------
> "Dogs have big tongues, so you can bet they don't
> bite them by accident"
>
>
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>



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