Posted on 02/11/2002 8:00:28 AM PST by Liz
In early 2000, when Global Crossing was still flying high, Nell Minow posted a negative report about the company on her Corporate Library Web site.
It was the debut of the site (www.thecorporatelibrary.org), which evaluates corporate governance issues. As her first subject, she chose executive contracts, the reports often ignored by investors and buried under hundreds of other documents. But after sifting through dozens of mundane contracts, the contract for Global Crossing's chief executive, Robert Annunziata, appalled her.
"Global Crossing had agreed to give him two million stock options with a strike price below where the stock was trading," she recalled. "It had also agreed to pay for his family — and his mother — to fly first class to Los Angeles while he was relocating, and it pledge to buy him a new Mercedes: a 1999 SL500 was spelled out in the contract."
"I thought it was the worst employment contract in the history of the world," Ms. Minow recalled. "If the board can't say no to such outrageous demands, then what can they say no to? Anybody who would ask for that kind of a contract is a problem. Any board that would give in to those demands is a problem too."
Ms. Minow was one of the first to call attention to what turned out to be serious problems at Global Crossing, the fiber optic network operator that recently filed for bankruptcy protection.
At the time, no one paid much attention. Indeed the reaction from the company, employees, investors and chief executives was mostly negative. Ms. Minow recalled in a telephone interview yesterday from her home in Washington that when she asked Global Crossing for a list of its board, the "first response was that they didn't have to give it to me because the company was incorporated in Bermuda." Why would a company based in Los Angeles, need to be based in Bermuda, she wondered.
Even investors and employees did not think she was doing them a favor. "I got a lot of hostile e- mails that said I didn't understand the company," she said.
And when she presented her findings to institutional shareholders and chief executives, the chief executives were equally dismissive. Their view was: "what do you care that he his mother gets a plane ticket," she said. "He is making a fortune for the shareholders."
As it turned out, Global Crossing's chairman, Gary Winnick, had trouble retaining chief executives: there were five in five years. If investors had focused on the weakness of the board under its chairman, they might have been more critical of management instability and its poor financial results earlier, Ms. Minow believes.
Over the long term, Ms. Minow has developed a reputation as a savvy analyst of corporate governance issues. She may well have inherited her critical bent from her father, Newton N. Minow, a former chairman of the Federal Communications Commission, who called television a "vast wasteland" in a famous 1961 speech.
Initially, Ms. Minow thought she might become a lawyer. Instead, after law school she went to work for the Environmental Protection Agency. In 1986, she joined the shareholder rights activist Robert A. G. Monks at Institutional Shareholder Services, the proxy advisory firm that was sold to Thomson Financial in 1995. They then started a fund to invest in badly managed companies with the hope of improving them.
She and Mr. Monks spun out the Corporate Library, where Ms. Minow now spends her time.
Films are Ms. Minow's other passion and she reviews family- oriented films for on her Web site, www.moviemom.com. In her corporate criticism, she is fond of citing films to make a point. After Sears shrunk its board to rebuff Mr. Monks' efforts to gain a seat, she wrote a critical article: "Honey, I Shrunk the Board."
"Ms. Minow recalled in a telephone interview yesterday from her home in Washington that when she asked Global Crossing for a list of its board, the "first response was that they didn't have to give it to me because the company was incorporated in Bermuda." Why would a company based in Los Angeles, need to be based in Bermuda, she wondered."
A. Offshore banking is money laundering.
B. Money-laundering is tax evasion.
In the works....... stay tuned.....
Why?
Seperately from last: Why? And by whom?
Seperately from last: Why? And by whom?
You on the right site?
One on 'Global (Double) Crossing, and one speaking of Li Ka-shing and Hutchison Whampoa.
1) Global Crossing Nears Agreement To Sell Its Local Phone Business - Credit Suisse First Boston, AT&T,
2) KPN, DoCoMo Unite in Bidding For Wireless Licenses in Europe - Telefonica, France Telecom, BID, Tyco,
Apparently the May 'Velocita' deal didn't work out (30 days)
This has to be May, 2000, unless, of course, we have a bunch of 'interlocking directorates'.
A few familiar names, and a couple on the management team link as well.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.