Wednesday, 2 March 2011

Simon Fox - HMV's "Guardian"

CEO of HMV, joined the firm when the stock was at 130p, its now at 15p.

Not to overstate the case, but sharehoders have been decimated, well actually reverse decimated, as they have about 10% of their original investment left.

During his tenure, there has been a different head of the renumeration committee for different years, and a differing method for calculating performance awards, be that by changing the "peer group", the criteria or the conditions. The Raven is sure though that shareholders must be delighted to know that they had to match another firms offer for this superstar, in order to motivate him in his role?! what is 2mm of shares between "partners"?

When he joined in 2007 he had a total compensation of £333k, for 2008 he earned £992k, for 2009 £579k and for 2010 £874k.

What did shareholders earn?
2007 -33%, ouch and the FTSE did what?
2008 +29% almost back to break even yah, definitely worth a million quid...
2009  +3% still not at break even... hmmmm half a million?
2010 -44% almost a million again?
2011???? -82% and what will be looking at??

Thank goodness ITV didn't land this superstar, the Raven was long ITV, that would have been pretty nasty.

It is "interesting" though that a company losing nearly all of its shareholders' value has a CEO that also find the time to join the board of the Guardian, and the Chairman, to top that decided that joining M&S might be a good idea, only to discover that perhaps he didn't actually have enough time for both roles.

Just to put it into perspective, since he joined the firm shareholders have lost half a billion pounds, and the CEO has made £3mm but feels that he needs to be incentivized to turn the company around rather than jumping ship? Shareholders should have made him walk the plank.

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