Accentuating the caveat emptor perspective with critical commentary on financial disclosure. I adopt a skeptical persona and look for chinks in the teflon coating of financial disclosure. My job is to identify financial warts. Perhaps a Black Swan. Disclosure: I do not hold positions in stocks mentioned for three trading days before or after blog post.
Monday, October 17, 2005
CEO Excess
Now that several executives have been sentenced to significant jail time, one of the messages is clear. Over the top excessive entertainment is the kiss of death. Particularly when funded by the shareholders. As investors select potential investments any signs of expensive entertainment are now sure signs of executive rot. The trick will be in establishing corporate governance procedures to catch potential problems before the spending actually occurs. The challenge will be standards creep. As the good times roll the tendency is to have better parties. Then again if you have solid managers they should not be asking the shareholder for party money.