Opinion

The Great Debate

from The Great Debate UK:

Banks get mixed reviews from institutional shareholders

Brendan Woods- Brendan Wood is Chairman of Brendan Wood International, a global intelligence advisory firm. Recently, BWI published the World’s TopGun CEOs as ranked by 2500 institutional investors, which provides insight into the executives in whom shareholders feel the greatest confidence. The opinions expressed are his own. -

Brendan Wood International tracks the competitive position of investment bankers in global and regional markets. It also compiles the confidence rankings of hundreds of global shareholders in corporate investments, including those in the world’s leading banks. As of mid-2009, the Brendan Wood Investor Panel found a mixture of sharp criticism, but also some occasional strong praise for these “newly refurbished” financial behemoths.

First, the bad news: while all the banks have by now somewhat improved their situation from what it was earlier in the year – repaying $68 billion in government assistance, raising new equity, and carrying out a number of boardroom shuffles – their improving news and modest profit reports have not led to any total absolution from the Brendan Wood Panel for the worst falls from grace when the credit crisis exploded.

Citigroup still draws some harsh judgements, and not just for the hangover consequences of the Sandy Weill and Chuck Prince eras, but for its more recent direction by present CEO, Vikram Pandit.

Responses from the Brendan Wood Panel were taken before Pandit’s recent new top management shuffle (Edward “Ned” Kelly previous CFO is now Strategy and M&A leader becoming Vice-Chairman, John Gerspach, previous controller and Chief Accounting Officer is now CFO, and ex Merrill Lynch Vice Chairman Eugene McQuade is now CEO of Citibank NA, not to mention the stepping down of Chairman and CEO Bill Rhodes), but it appeared unlikely that any such changes would be greeted with great enthusiasm from shareholders.

from The Great Debate UK:

Shareholder confidence vs. value investing

Brendan Woods- Brendan Wood is Chairman of Brendan Wood International, a global intelligence advisory firm. Recently, BWI published the World’s TopGun CEOs as ranked by 2500 institutional investors, which provides insight into the executives in whom shareholders feel the greatest confidence. The opinions expressed are his own. -

The Brendan Wood International's panel of 2500 institutional investors suffered through last year's markets believing value would somehow prevail. Those value investing "diehards" indeed died hard.

Conversely, those who correctly read the status of shareholder confidence and acted on it were spared. In short, shareholders that had lost confidence in the system abandoned their value criteria and sold good companies along with lesser ones.

  •