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Time For a Change at PepsiCo

The Economist has a piece this week on Indra Nooyi at PepsiCo. The venerable newsmagazine argues that Nooyi’s time at Pepsi may be winding down, and that she may welcome a change, now that politicos have begun naming her as a possible head of the World Bank. Continue reading ›

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You Don’t Get Didley

The Wall Street Journal reports today that several MF Global executives may receive huge bonuses, as part of a settlement related to the firm’s demise. We at Chiefist support big-time pay for big-time performance. But, in the words of Rupert Horn in Brewster’s Millions, “But if you fail, you don’t get didley!” You blow up your firm, you also shouldn’t get didley. These outsized payments for truly disastrous results, and poorly considered processes to prevent such losses, infuriates many people, and causes a lot of the country’s distrust of Wall Street and Big Business.

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Economist on Jeff Bezos

In this week’s issue, The Economist writes a profile of Jeff Bezos worth reading. In it, Bezos emphasizes his focus on the ‘long term’ — with Amazon, with his space exploration firm, Blue Origin, with the Kindle, and with shareholder returns. Continue reading ›

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CFA Magazine: Investors Need Better Ways to Assess Management Quality

In the January/February 2012 issue of CFA Magazine, published by the CFA Institute, Dave Ulrich, Norm Smallwood and Michael Ulrich examine the relative importance of several investment factors, and investors’ self-diagnosed abilities to assess those factors. Specifically, the authors asked more than 400 professional investors to weigh the importance of company performance, industry factors, and leadership quality. Continue reading ›

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New and Improved Chiefist.com

Return visitors to our website can tell we’ve just launched a new version of Chiefist.com. We think you’ll like the new, brighter look. In addition, the site now more accurately reflects our value proposition to clients, services and unique research approach. It also includes samples of our work, to give prospective clients a sense for the quality of our analytics and research.

This is the first stop on a broader evolution of the site. In the coming weeks and months, we’ll revamp the home page, continue the evolution of the site’s look-and-feel, and aim to demonstrate even greater value to visitors.

Enjoy the new site. If you have any comments on it, please feel free to let us know.

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Best and Worst Large-Cap CEOs

Following the last issue of Chiefist Positions (“Best and Worst Mid-Cap CEOs”), several subscribers asked us to run the same analysis, but for large-cap CEOs. Here, we looked at S&P 500 and S&P 1000 companies with a market cap above $5 billion. We examined them with our Business Value Enhancement MetricTM (BVEM), for the last three years. As a reminder, the lower the BVEM score, the better. Portions of the lists included in the latest issue are included below. Continue reading ›

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Diamond in the Trough

What lessons should we take from the ousting of Diamond Foods’ [NASDAQ: DMND] CEO Michael Mendes and CFO Steven Neil? A few stand out:

1. We should probably suspect anyone who wants to take a cooperative public. That person’s obviously got major ambition, which may be fine, but default suspicion is a safer posture.

2. Short sellers did their job. Allegedly, one or  a very small number of short-focused funds did the yeoman’s work of digging very deeply into the company’s financials.

3. Investors face massive risk from these situations. Diamond’s stock dropped 37% the day of the announcement and its debt got whacked too.

4. Mendes joined the Board of Hormel Foods Corporation [NYSE: HRL] in September, 2011. Surely, he was invited by Chairman and CEO Jeffrey Ettinger. While Ettinger has performed quite well since becoming CEO in 2006, his judgment must face now intense scrutiny from investors. He could just have suffered from (very) bad luck in picking Mendes. But investors deserve to know the lengths to which Hormel vetted Mendes before extending an invitation to join the Board.

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Post Ideas

– IBM and following a superstar CEO

New Chiefist Positions: Best and Worst Mid-Cap CEOs

*****We publish Chiefist Positions bi-weekly — every other Thursday. Below you see a snapshot from let week’s issue. For more details, please see the site or email [email protected] TO SUBSCRIBE, CLICK HERE*****

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Chiefist wanted to take a look at mid-cap companies and their CEOs. For this analysis, we counted a company as ‘mid-cap’ if has a market capitalization between $800 million and $5 billion. We examined these mid-cap companies with our Business Value Enhancement MetricTM (BVEM), for the last three years. As a reminder, CEOs want to score in BVEM what they score in golf – lower scores indicate better performance.

Below, you see the top 30 mid-cap CEOs. Further below, you see the 30 bottom-ranked CEOs.

These lists likely serve as useful starting places, or screens, for potential good investment ideas – both on the long and short sides of the trade. If you’d like to delve deeper into any of these executives, their teams, Boards or companies, please contact us.

PARTIAL RESULTS:

Worst Mid-Cap CEOs, February 12, 2011 to February 11, 2012

Rank

Person

Company

Score

567

Antin, Robert

VCA Antech Inc.

500.55

568

Barrett, Fredrick

Bill Barrett Corp.

500.8

569

Greig, Paul

FirstMerit Corporation

501.35

570

Rowley, Steven

Eagle Materials Inc.

503.35

571

Bridgwater, J. Downey

Sterling Bancshares Inc.

503.6

572

Laphen, Michael

Computer Sciences Corporation

504.6

573

McClean, Murray Commercial Metals Company

507.95

574

O’Kane, Chris

Aspen Insurance Holdings Ltd.

508.85

FOR THE REST OF THE “WORST” LIST AND THE “BEST” LIST, PLEASE CONTACT US.

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Friday’s Round-Up: Board Backs Nooyi; Buffett “Slams” Private Equity; Pandit on Disclosure; Habits of Unsuccessful Execs

Comings & Goings

Indra Nooyi receives the continued blessings of PepsiCo’s Board.

In The News

Citigroup’s Vikram Pandit urges additional disclosure standards for financial institutions.

Warren Buffett “slams private equity” in an interview.

Forbes looks at the “7 Habits of Unsuccessful Executives.”

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