Archive for October, 2009

Executive Compensation

In my Board of Directors and Corporate Governance class, taught by adjunct professor Jack Harsh, we have had a number of conversations about executive compensation and some of our guest speakers have even weighed in on the subject. Our most recent guest speaker, Bob Sledd (former CEO of Performance Food Groups), believes that most CEOs are fairly compensated and do not make anywhere near the amount of money that news outlets claim (well, those on Wall Street do). Executive compensation is clearly a hot topic given the government’s involvement with bailing out a number of large firms as well as the disparity we hear between Company X making huge layoffs this year yet still giving top executives hefty bonuses or other forms of compensation. Professor Harsh believes that this year will be a record year for compensation even if we (the general public) don’t agree with the reasons why. Professor Harsh encouraged us to not think about executive pay in an absolute value but rather focusing on that compensation is tied to the company’s strategic goals and timeframe for meeting such goals, not for (legally) manipulating their books so that their stock price goes up without actually accomplishing any exemplary results.

In light of the media focus on the subject, I found two interesting articles on CNN Money that I encourage you to check out - the 5 Most Overpaid CEOs and the Ten Highest Paid Executives. Do they really deserve what they’re getting?

New source of funds for Twitter?

As of late yesterday, Google and Microsoft had each announced separate deals with Twitter to include tweets in search results.  While the details of each deal were undisclosed, this appears to be the first real source of income for a company that has subsisted entirely on venture capital since its 2006 inception, topping up at $155 million (figures in left sidebar) as of September this year.

UPDATE:
CEO Evan Williams spoke to Fortune this week about why income and cash flow are not presently the focus at Twitter.

Guest column on the benefits of operating a business near great business schools

I have heard from more than a dozen business leaders and many of our alumni since my guest column on businesses partnering with business schools was published at RichmondBizSense.com last Friday.  A number of individuals have encouraged me to post the link here so that our MBA students and prospective students might have a chance to view it.

The link to BizSense is here: http://bit.ly/3CXFZP

I welcome your comments.

First Semester Impressions

My brain is fried.  This week I took the mid-term exam for MBA 501: Financial Accounting.  I now fully understand the potential difficulty of an “open-book, open-notes” exam, but let me back up a moment…

I think the most appropriate way to introduce myself as a new blog contributor is to open a window into my present academic life - my education, in media res, as it were.  I’m Daniel Warshaw, and I’m halfway through my first semester of the MBA program at the Robins School of Business.  So far it’s been surprising, challenging, and rewarding.  The tone set by the Opening Residency was invaluable in raising my expectations for the rich variety and rigor of what lay ahead.

I’ve studied business a bit before.  My undergraduate degree was in Information Systems and consisted of a fair range of courses outside the technical world from organizational behavior to strategic management.  Even the technical classes concentrated on the business and were presented in the context of business processes.  I was, therefore, unshaken by the prospect of studying statistics and accounting at the beginning of my graduate work.  After all, with at least two semesters of each from my undergraduate, could I expect much difference?

The truth is there are a number of differences, and while I’m sure they are generally applicable to the program I would like to explain them as they relate to the accounting class that I mentioned at the top of the post.

First of all, the pace is incomparable to that of an undergraduate class.  Every week we cover an entire chapter dense with concepts and examples.  While I could manage putting off reading as an undergraduate until tests approached, I would steadily fall behind with each passing week if I was so relaxed this semester.  Keeping up with the assigned reading is essential not only because of the cumulative nature of the material but because of the discussion-oriented class meetings.  There are fewer than twenty students in my section and you would be in the wrong program if you thought you could lay low and avoid the teacher’s questions.

Oh yes, the teacher.  I am fortunate enough to have Phil Rohrbach as my accounting teacher, a man who only recently retired from the industry and brings a wealth of practical knowledge.  Few things excite me about a class more than a teacher who knows his subject well enough simply to share it with the students.  Not once this semester have Thursday nights felt like a typical lecture.  On the contrary, I have come to look forward to my Thursdays and the discussions that have so far taught me more than any previous accounting course.  I don’t mean to pitch the hard sell, but it is also worth mentioning that I’ve always disliked accounting.   Mr. Rohrbach, though, makes the material engaging enough not only to hold my attention but to motivate my studies.

I would be remiss in my portrayal of MBA 501 if I didn’t share the effects this class has had on my daily life.  While my routine at the office focuses mainly on software development, I feel that I have a firmer grasp on the impact of my work to my company’s financial situation.  Even outside the confines of my cubicle I feel better equipped to understand the financial news and reporting.  It is remarkable how much the rise and fall of so many companies can be traced to decisions about how to present financial statements.

So here I am, halfway finished with Fall Semester, 2009.  I will likely have a better perspective on my footing in the program by December 10th, but for now I’m eager to continue.  As for my future entries, you can expect a focus on information technology, but with an eye toward IT’s place in the broader organization and market.

Pleased to be here.

From the MBA Leadership Council

Gary Welch, president of the MBA Leadership Council, sent along a brief review of recent events –

Welcome Back Reception:
Richmond MBA students enjoyed a fun evening of socializing on September 16, 2009 in the Business School Atrium. New and returning students had a chance to meet fellow classmates and to learn more about participating in student organizations. Stories of international excursions, Opening Residency rites of passage, and summer activities were told while munching on appetizers prior to class. The event was a great way to kick off the start of a new semester! A special thanks to Lois, Debbie, and Jackie for helping to make the event a success.

High Ropes Course Event:
A contingent of students was brave enough to tackle the High Ropes Course Challenge on the University of Richmond campus the morning of September 19, 2009. Dressed in comfortable clothes and sneakers, the group first prepared for the challenges ahead by engaging in ground activities to develop team building, communication, and trust. The true test began once they climbed up the course to conquer the eight unique sections with safety harnesses attached. Even though at points they were over 30 feet off of the ground, the students were not to be foiled. They successfully completed every section and had a great time doing it!