The other winners in CEG deal: Shattuck & the board
Comment in my email this morning relating to this column: Biggest winner in Constellation deal is Buffett.
There were two additional winners in the Constellation Deal -- Mayo Shattuck and the Board of Directors -- they keep their positions, remaining in place. What a job they have done!!! Shattuck, with the compliance of the Board, ran the company into bankruptcy gambling on commodities trading, then sells the company at a "fire sale" price to stave off bankruptcy and now makes another deal to sell part of itself to EDF by giving the initial buyer, Warren Buffet $1 Billion in cash and stock now and, later repayment of his original down payment of $1 Billion at 14% interest. Am I missing something here -- a CEO and his Board take a company to the brink of disaster then pays a buyer so they can make a sale??? Is this a practice taught in business schools???? If so, please write a book about this new chapter in Amercian business theory.
Comments
Mt Hancock, you are exactly right. This is the same CEO, and Board of Directors that paid the CEG executive team an average of $10M for the four senior execs in the Sun's Top 10 Highest Paid Executives last summer. If I recall correctly, Shattuck and Co justified the compensation levels based on their knowledge and expertise, which put them on par with the NYC investment bankers. Nicely done fallas!!!! The Compesation Committe should be the first to go for rubber stamping this farce. Time for the shareholders to say enough is enough and vote them all out. Or maybe EDF will wise up and dispense with ALL of them
Posted by: Gary Rice, Towson | December 18, 2008 11:04 AM
Jay,
If you look at the data, Shattuck's salary can't be what's driving his decisions. He's already quite wealthy, but he's got a lot of equity and options. He might be wrong, but he probably thinks the stock is worth a lot more than 26.50, otherwise, why take the risk that the stock could become worthless and all the money they "owe" him could evaporate in bankruptcy?
"Keeping his position" can't possibly make as much of a difference to him as the stock price and solvency. And perhaps salvaging his reputation.
I recognize there's plenty to criticize him for, but you're all wet on the motive you've assigned him.
Posted by: a guy | December 18, 2008 12:21 PM
Someone needs to take a look at all the transactions that Mayo Shattuck has done as the result of awarded option grants, how he drove the stock price up through commodity trading and sold at prices in the $70-$90 range. All that based on grants that were in the teens! Look at the # of shares granted over time! You think his annual compensation is ridiculous? How about those numbers. Somone should shed light on that. Marylanders continue to get the shaft by Mayo "greed is good" Shattuck.
Posted by: Brian | December 18, 2008 1:01 PM