Backed Citigroup, JPMorgan, but dissented elsewhere BlackRock’s Edkins: ‘a high threshold for voting no on pay’ By Ross Kerber ….Though final tallies are not available, votes shown in filings this week suggest BlackRock often gave executives the benefit of the doubt. But its less-frequent votes against individual board members like those who sit on compensation [...]
Archive | August, 2012
Key Metrics Series: Share Repurchases
August 31, 2012 in Key Metrics
The inaugural report in our weekly Key Metric series focuses on share repurchases, which are sometimes used by companies in trouble to artificially boost their earnings per share and the pay of top executives. GMI Analyst’s Share Repurchases metric identifies companies whose expenditures on the repurchase of their common stock have exceeded 2% of their [...]
GMI Ratings Governance Issue | Sally Beauty Holdings, Inc.
August 31, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
Still deep in debt, Sally Beauty Holdings, Inc. has spent its money on stock buybacks and acquisitions, increasing the chance that the Texan retailer will have to revise its earnings downward in the coming years. Its financial statements reflect an AGR score of 18, indicating higher accounting and governance risk than 82% of comparable companies. [...]
GMI Ratings Alert: Big Lots, Inc.
August 31, 2012 in Daily Viewpoint, Ratings Watch
By Greg Ruel, Senior Research Associate On August 23, 2012, Big Lots, Inc. released a second straight negative earnings pre-announcement. The same day, a class action lawsuit was filed in Ohio on behalf of shareholders who purchased shares between February and April 2012. Earlier in the month, three additional law firms opened similar investigations for [...]
CFOs Unload Shares (CFO Journal.)
August 30, 2012 in GMI In the News
Maxwell Murphy, Senior Editor Chief financial officers at big companies have unloaded increasingly large holdings of stock in recent quarters as low-price options granted during the recession have vested and share prices have risen. A Wall Street Journal analysis found that CFOs at the largest U.S. companies sold nearly $895 million of their company’s stock [...]
GMI Ratings Governance Issue | Samsung Electronics Co., Ltd.
August 30, 2012 in Corporate Governance, Flash Reports
When a San Jose, Calif. jury’s over $1 billion verdict against Samsung Electronics Co., Ltd. for willful infringements of Apple Inc.’s seven patents hit global headlines on August 24, it did not highlight Samsung’s limited ability to maintain sustainable growth with its current strategy. For many Samsung supporters, mainly on the company’s home turf of South [...]
DailyFinance: Ignore This Red Flag at Your Own Risk
August 29, 2012 in GMI In the News
By Alyce Lomax, The Motley Fool “Aggressive” can be an inspiring word in investing, one that could point to positive returns over time. A company’s management could be aggressively embarking on growth initiatives, for example. Investors could find themselves full of admiration for a company’s aggressive competitive moves to fend off or even vault ahead [...]
GMI Ratings Alert: WPP PLC
August 29, 2012 in Daily Viewpoint, Ratings Watch
By Damion Rallis, Ratings Analyst While share prices at advertising giant WPP PLC (WPP) have soared recently, the company’s aggressive strategies may ultimately threaten to reverse its share price growth. The limelight-seeking presence of CEO Martin Sorrell, an insistent acquisitions policy, recent shareholder unrest over remuneration policy, and a very public dispute over a recent [...]
Behavioral ESG: Focusing on What Matters
August 29, 2012 in ESG & Sustainability, Global ESG Standards, Research Reports - GMI
Over the past decade, we have seen steady progress in the broader integration of environmental, social and governance (ESG) factors into mainstream investment analysis and risk modeling. Aside from growing demand, the evolution of ESG risk models away from their traditional focus on exclusionary screens also eased their adoption across the financial community. Still, not [...]
Bank of America board picks get mixed reviews (SNL)
August 29, 2012 in GMI In the News
By Kiah Lau Haslett Bank of America Corp.’s pick of four new directors drew fire as well as applause, as observers disagreed about what sorts of skills and experience the large and recovering financial institution needs on its board. (Subscription required)
GMI Ratings Governance Issue | Norseman Gold plc
August 29, 2012 in Corporate Governance, Daily Viewpoint, Flash Reports
As Norseman Gold plc struggles to turn around its business, it recently announced an investment deal involving China-based Zhaojin Mining Industry Company Limited. Shareholders in the U.K.-incorporated miner should take heed of red flags in Norseman’s financial statements. The data in the Australian-based company’s regulatory filings gives it an AGR score of 6, indicating higher [...]
Integrity Research Associates: Risk vs. Reward
August 28, 2012 in GMI In the News
Much attention is focused on the performance of stock recommendations, but what about risk? Which firms offer recommendations with the least risk? To find out, we analyzed the performance of stock recommendations made by stock research firms tracked by Investars, a New York based performance measurement specialist, for the period from from June 30, 2009 [...]
GMI Ratings Releases Global Data Comparing the Equity Performance of Companies with Top-Decile and Bottom-Decile Accounting and Governance Risk (AGR®) Ratings
August 28, 2012 in GMI Press Releases
Study Confirms that AGR Ratings Can Help Investors Significantly Improve Equity Returns New York — August 28, 2012 —GMI Ratings, the leading provider of research on environmental, social, governance (ESG) and accounting-related risks affecting the performance of public companies, released today global data comparing the equity performance of companies with top-decile and bottom-decile Accounting and [...]
GMI Ratings Governance Issue | Zhaojin Mining Industry Company Limited
August 28, 2012 in Corporate Governance, Flash Reports
China’s Zhaojin Mining Industry Company Limited is participating in the investment of a stake in Australia’s Norseman Gold plc, but the former has an unusually high dependence on debt funding and has also made questionable statements about its finances. Zhaojin’s regulatory filing data reflects an AGR score of 5, indicating higher accounting and governance risk [...]
Corporate Secretary: Should the chair and CEO roles be split?
August 27, 2012 in Daily Viewpoint, GMI In the News
Should the chair and CEO roles be split? by Michelle Lamb Experts argue combined CEO/chair role may undermine shareowners’ interests. Board independence has been a hot topic in governance circles for some time, especially independence of the board’s lead role: the chair. The position sets the agenda, establishes the tone at the top and is [...]
GMI Ratings Alert: Facebook Inc.
August 27, 2012 in Daily Viewpoint, Ratings Watch
GMI Ratings Alert: Facebook Inc. Facebook Inc. founder Peter Thiel cashes out with $1 billion. Stakeholders have to ask, is this someone you really want on the board? By Greg Ruel, Senior Research Associate On August 20, 2012, an SEC Form 4 form was released for Facebook founding investor and board member Peter Thiel, showing [...]
GMI Ratings Governance Issue | UniCredit SpA
August 27, 2012 in Corporate Governance, Flash Reports
News hit that U.S. regulators are investigating UniCredit SpA’s possible violations of economic sanctions. Although the Italian bank continues having such run-ins, its reporting of finances has grown more conservative in recent months compared to its strategies in 2011. UniCredit’s AGR score is a 45, indicating higher accounting and governance risk than 55% of comparable [...]
AGR® Ratings Can Help Investors Significantly Improve Equity Returns
August 27, 2012 in Daily Viewpoint, Investment Returns
We released last week the latest monthly results in a rolling 10-year study comparing the equity performance of companies with top-decile and bottom-decile Accounting and Goverrnance Risk (AGR®) ratings. AGR is GMI Ratings’ proprietary measure of the investment risk of approximately 18,000 companies worldwide. AGR reflects a broad spectrum of accounting irregularities and weaknesses [...]
Northeastern Asia: Corporate Governance Laggards
August 27, 2012 in Corporate Governance, Daily Viewpoint
By Kap Su Seol – Research Analyst While such South East Asian countries as Singapore and Hong Kong have strong and clear standards for director independence, one of the serious issues with North Eastern Asia’s corporate governance centers on regulatory ambiguities. Requirements for director independence are so ambiguous that the terms “independent” and “outside directors” [...]
Ratings Reports for Seven Companies
August 24, 2012 in Ratings Watch
Based on recent events, GMI Ratings has re-rated and updated the reports for the following companies: A123 Systems Inc. (NASDAQ:AONE) Acer Inc. (Taiwan Stock Exchange: 2353) ATP Oil & Gas Corporation (NASDAQ:ATPG) Bristol-Myers Squibb Company (NYSE:BMY) Deutsche Bank AG (Euronext – Brussels:DBK) Japan Tobacco (TSE:2914) Lonmin Plc (LSE:LMI) A123: On August 22, 2012, A123 Systems [...]