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Stronach Screws Shareholders


Parsad
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That was pretty damn funny Dorsia!  ;D

 

At least so far, Sardar's gains will be completely in line with shareholders.  It's just that he's changing the original agreement.  If shareholders came into this knowing what they were now getting, that would be fine, but the ethics of changing mid-stream is what irks me.  Cheers!

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A friend of mine who is a businessman said of Biglari - he will be very confident in his talk and won't mind if he ends up in jail. He said this before the name change and the compensation package came out.

 

While I don't like what Sardar and the board did, I think your friend's opinion may be a bit extreme.  Cheers! 

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From: My Investing Notebook:

 

Ode to Eddie Lampert

The difference between saying what you believe and saying what people want to hear:

 

On June 7, 2005, Eddie Lampert Penned the following to Shareholders of Sears Holdings: "I intend to serve without compensation, either in cash or stock options, consistent with my belief that large owners who serve as Chairman or CEOare best compensated by increasing the value of the company over time for all shareholders rather than through large compensation packages." Lampert lived up to his words.

 

Another CEO, Sardar Biglari, spoke similar words on February 27, 2008: "Our interests are aligned with yours. As one of the largest shareholders of the firm, we seek to make money with you, not off you."  A week before that he had some offered some other relevant tidbits: "In addition, the board's letter reiterates the falsity that we are seeking to control the company for our own personal benefit and therefore should pay a control premium.  Nothing could be further from the truth." It turns out the only thing far from the truth were Biglari's words (some even call him BigLiar now).

 

 

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The shareholders are very stupid. It's funny that the lead director is Mike Harris.

 

Stronach took in over 52 million in compensation from 07-09. Ridiculous. I assume that he took so much over all those years and went out with a bang. On top of that, his daughter is on payroll. Of course his base was only 200k, wonderful  ::)

 

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While I don't like what Sardar and the board did, I think your friend's opinion may be a bit extreme.

 

It was just an opinion of Sardar's character - not that it would happen to Sardar. He asked me if I knew about Sardar's lifestyle, at that time I didnt know. Some checking showed that he does have lavish tastes. I think my friend gauged Sardar's character more accurately than I did at the time.

 

I think Sardar is capable - a good operator and a decent ( but not in the Buffett league ) capital allocator. He will have issues attracting quality people ( people who have the character and skill ) to work for him given that he follows one rule and expects everyone else to follow another one. It will never scale like BRK for this reason alone.

 

I would discount everything Sardar speaks/writes and just look at the numbers with discount to cash flow and Sardar compensation - one would be foolish not to do otherwise. The SNS brand is strong, talked to a friend of mine from Indiana - he still has fond memories of visiting SNS stores with his grand parents.

 

 

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