Archive for December, 2007

A Developer Gets it Right, Eventually

Thursday, December 20th, 2007

In a quickly growing city, bad publicity waits on developers’ doorsteps like a rattlesnake waiting to strike. Activists are quick to speak out against projects, and neighbors of proposed commercial or residential developments are always poised to complain about increased traffic, too much density, and decreased property values.

At first the battle between Phoenix home developer James Sasser and neighbors near his proposed project on Dreamy Draw Drive followed the usual script. He announced his plan to build four houses on a never developed 10-acre mountain top. Residents and activists complained loudly because they believed the city had promised to keep the land as part of the Phoenix Preserve.

But somehow, the president of the Home Owners Association had, without residents knowledge, sold the land to Sasser for $150,000, much less than it was worth. The city council approved the housing project, despite the outcry from citizens.

Then the script took a surprise twist. After discussions with some of the city council members, Sasser agreed to donate the land to the city for inclusion in the preserve. He did the right thing for the community.

It was also a great PR move. Building four houses just wasn’t worth the bad publicity he was getting. Unfortunately, a lot of developers wouldn’t have been so savvy or generous.

Pay for Performance? Not for CEOs

Wednesday, December 19th, 2007

Hector Ruiz, chairman and CEO of AMD admitted to analysts that 2007 was a bad year for his company. “We blew it and we’re very humbled by it and we learned from it and we’re not going to do it again,” he said.

Yes, it was a very bad year. Thanks to technical problems that delayed the availability of its new chip, AMD lost 1.6 billion during the first nine months of the year. The stock price is down 56 percent from a year ago. images.jpeg

Despite, the company’s poor performance, Ruiz got a raise in his base salary of 7.4 percent. His total compensation last year was already $12.8. What is the board of directors thinking? Did they read the balance sheets? Somehow, that doesn’t give me a lot of trust in AMD or make me want to buy stock.

(The board can’t justify the raise by saying they are paying the going rate. The CEO of AMD’s biggest competitor, Intel, makes just $9.8 in total compensation).

Meanwhile, the president and CEO of Costco, one of the most successful retailers in the country, gets no raise for the seventh year in a row. That’s the way Jim Sinegal wants it, even though Costco’s stock price is up 28 percent from the same time last year. His total compensation this year is about $3.2 million.sinegal.jpg

And when Sinegal admitted a mistake in 2006, taking responsibility for errors in the company’s stock-option grants to employees, he turned down a $200,000 bonus.

So, one CEO who performed horribly is paid at least $4 million dollars more than the $8.3 million average median income for CEOs. And a CEO who continues to perform well, makes $5 million dollars less than the average.

What’s wrong with this picture?

Andy Pettitte Smart Guy

Saturday, December 15th, 2007

Andy Pettitte was smart, either by his own doing or good PR advice. The Mitchell report comes out revealing his use of HGH — Pettitte almost immediately admits it and gets control of the story. He gives himself a chance to put it in context. He says he was recovering from an elbow injury and used HGH two times.

HGH wasn’t even against baseball rules in 2002 when Pettitte took his injections. Yet he knows it’s a big deal to the media and to some fans. So he does the prudent thing. He admits it. It becomes a one or two day story and goes away.

Meanwhile, Roger Clemens protests his innocence, and the story will go on and on. Maybe Roger is really a saint, but if not, he’s just made his situation worse.

In this age of constant media inspection, the truth almost always wins out.

Double O Power: Oprah and Obama

Saturday, December 15th, 2007

I like Oprah. But I’m not going to vote for Obama because the other O tells me to. Others might, though. In the past, celebrity endorsements haven’t seemed to help candidates much. But Oprah’s different — she’s a powerful force for women in this country.

As one observer, Steven Ross, a history professor at USC put it, “She’s pitching Obama as part of her self-improvement campaign, saying, essentially, that he will improve your life and improve the nation.” 02oprah550.jpg

Frankly, I find it a bit scary. It’s one thing to influence what books people buy, but electing a president is serious business. The race too often becomes a popularity contest — Oprah’s involvement makes that even more likely.

Also, I don’t think Oprah’s necessarily a good judge of character. She made Phil McGraw famous, and you can read my earlier post to see what I think of him.

Survey results about all of this are interesting. In one done by Pew Research, 69% of those surveyed said Oprah’s endorsement won’t influence their vote. That’s good news.

But their answer to a second question was a bit contradictory. 60% said they believed Oprah’s support would help Obama get elected. In other words, they think other people are easier (dumber?) targets than they themselves are.

It reminds me of surveys about driving abilities. When people are asked if they’re a good driver, most put their own skills in the top percentiles. But when asked about others’ skills, they rate them much lower. Those other people are bad drivers, but not me!

I’m hoping those “other people” don’t let star power influence their vote.

McDonald’s Not Very Happy Meal

Friday, December 7th, 2007

Why would McDonald’s give the food police such an easy target for so little payoff? How much could the company have gained by advertising on the report cards for kindergarten through 5th grade in Seminole County, Florida? The company also promised a free Happy Meal to students with good grades, behavior, or attendance.

The company’s action was especially egregious because in July, McDonald’s was one of 11 companies who pledged to either ban advertising to children under 12, or limit them to food and snacks that meet certain nutritional guidelines. I hope they’re not going to claim that Ronald McDonald’s picture on the cover of kids’ report cards isn’t advertising.

Of course, the Campaign for Commercial-Free Childhood was quick to respond. “This is yet another example that self regulation by food marketers has failed,” said director Susan Linn. “I’m not shocked that McDonald’s tried to do this; I’m shocked the school district went along with it.”

Nope, the School Board wasn’t thinking straight when they allowed the advertising partnership. But I think it’s an issue of not being aware of the climate today which is focused on childhood obesity as a national crisis. The district had a similar partnership with Pizza Hut for 10 years, and when that company opted out this year, the Board didn’t rethink the concept; it just went with McDonald’s.

Apparently, the School Board’s constituency is equally clueless. Only one of the kids’ mothers raised a stink. Granted, it was a big stink that got national attention. But until more parents become concerned and active in their kids’ food choices, we’re doomed to a fat future.

Kathy Kerchner, Media Expert