Randall Bolten Blog

Recently, I took a bank CEO to task for asserting that you could actually identify which dollars in your bank account were used to pay which bills, thereby insulting the intelligence of many (see “All Dollars Are Green,” posted 2/15/09). But corporations aren’t the worst offenders here. That award goes to state and federal legislatures.

Just the other day a senior corporate executive reminded us why much of the public thinks of corporate executives as not only greedy, but also contemptuous of the public’s intelligence.

Happy New Year! Today’s post is about an easy way to quickly estimate annual return for very high returns over several years, without needing a calculator. My New Year’s wish to you is that this will actually be useful to all of you, and soon.

In a New York Times op-ed piece this morning, Paul Krugman rails about the excessive compensation that “Wall Street” has extracted from the economy over the last few years. He makes the interesting observation that over the last few years, the share of GDP going to the finance sector has risen from 5% to 8%.

First of all, a confession: I’ve read very little about l’affaire Madoff. I just don’t want the facts as I’m almost certain they are to be muddied by the facts as they actually are.

Financial Executive magazine arrived today with “Fraud’s House of Cards: Has Complexity Created an Unmanageable Situation?” by Lynn Brewer, an Enron whistleblower and founder of The Integrity Institute, as the cover story. Ironically (so say I), there’s also an interview with Charles Niemeier, a member of the Public Company Accounting Oversight Board, entitled “Can More. . . or Less Regulation Fix What’s Wrong?”

Let’s talk about a gritty, real-life issue: What should your car’s collision insurance deductible be? The decision is based on pure math, but every one of you can figure this out. And you might save a few bucks! Here’s how:

Well, are they? Should stock options be valued, and treated as an operating expense to be run through the company’s income statement? The accounting issue was “settled” a few years ago by GAAP statement FAS 123R, which requires companies to “expense” stock options.

Today’s post by Michael Arrington of “TechCrunch,” is on Newt Gingrich’s call for the repeal of the Sarbanes-Oxley Act. Often referred to as “SOx,” this law was enacted in 2002 in the wake of some sensational accounting scandals, to ensure stricter compliance with accounting standards by U.S. public companies. Very eloquently, Gingrich asserts that SOx has accomplished very little at very great expense.

I met with a Lucidity client this week, and the topic was incentive compensation plans – you know, sales commissions, executive incentive plans, MBO plans, marketing bonuses, engineering project completion bonuses, etc. – where some portion of the employees’ pay is dependent on performance, effort, or results.