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Archive for January, 2009

Ceo4aday would like to thank its readers for their continued interest in the topics we choose to write about. We are a new Blog having just completed our seventh week, with a record day of nearly 600 hits yesterday and 2200 hits for the week!

We have noted significant interest in our call for the creation of The United States Office of Entrepreneurship as well as our Ceo4aday Presents: A Journey To Acquire series, which details a current journey we are on to acquire a new enterprise.

We will continue to opine and comment on topics of interest and appreciate your comments and input.

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The departure of former Merrill Lynch CEO John Thain, from Bank of America, presents another opportunity for the world to marvel at the excesses of  Wall Street and the lack of sensitivity to the current economic environment.

At a time, when taxpayer supported financial bailouts and economic stimulus plans are the rule of the day,  Thain has managed to become a poster child, for the elite CEO, that is seduced by the power of their position and their access to great wealth. He is the newest member, of an exclusive and infamous club of CEO’s that  lose their perspective and believe they are exempt from the rules by which prudent CEO’s govern themselves in the execution of their duties.

Decorating ones office is a perk that comes with the role of the CEO. Retaining a decorator is not at all uncommon and may be prudent, if one is trying to maintain consistency within the corporate office. Paying $800,000. dollars for a decorator in this environment though is indeed excessive.

I have had occasion, as a CEO,  to plan and build a corporate headquarters facility. I retained a decorator to maintain the consistency throughout the corporate offices, that I felt at the time was required, to  project the level of professionalism that was important to our associates, shareholders and customers.

My own corner of the offices were replete with private bath and shower, private conference room and appropriate furnishings to allow me to perform my duties. However, my office tasteful as it was, provided a functional working environment that was consistent with the other offices throughout the facility,  as opposed to an elitist space with an $87.000. area rug or a $35,000. commode.

I have always viewed the opportunity to serve as a CEO in a company as a great privilege. When I hear or read about excesses or abuses by CEO’s it pains me. Communicating a vision for an enterprise or organization, developing a strategic plan, forming strategic alliances and working with your team members every day to create definitive value for stakeholders are in my mind the essential roles of a CEO. Spending corporate funds excessively on ones self, does not create value for shareholders and ultimitely serves to taint one’s judgement and detract from the value one may have contributed to the organization.

One can only pray that at a time when our economy is challenged that CEO’s remain focused on their bottom line and maintain the discipline to remain prudent in their charge.

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Within a year, the infamous terrorist holding facility in Guantanamo Bay, is to be closed. In a signing ceremony in the oval office,  surrounded by the Vice President and other members of his team, President Barack Obama issued an executive order directing the closure of the facility within a year.

The question, as to what to do with the detainees or where to send them upon closure of the facility, remains to be answered.

In his haste to placate the left and change what they perceive to be a negative global perception of both Gitmo, as the facility has come to be known, and the United States, Barack Obama has quickly moved to signal that the era of Bush is over and the era of Obama has begun.

Whether one agreed with the politics of the Bush Administration or not, it can not be argued that the former President and his team failed to keep America’s shore safe, since the 9/11 attacks. One prays that the Obama administration will be able to make the same claim when their administration comes to an end.

In the interim, America will strive to stay safe and secure with a new dictum that prohibits “threats, coercion, physical abuse and waterboarding”. Torture is a word that cojures the worst acts of humanity in my mind. However, if extreme behavioral activities, are required to maintain the nation’s security then I believe, we should tread warily as we reconfigure our intelligence gathering methods to provide a smiley face for the world.  

I suspects that in some circles,  the President’s executive order  has caused some to pause while others smile.

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 As Congress and President Obama continue to debate a new stimulus package for the American economy and increase our investment in America’s financial institutions, it is time for America to raise up and sing glorious the entrepreneurial spirit that is the soul of this great country.

It is time to create the United States Office of Entrepreneurship, an independant agency, for which the sole purpose would be to provide venture capital that would assist new ventures with capital investment and provide expansion capital for recent start ups to grow their businesses.

 Existing and current stimulus plans call for trillions of dollars to be injected into the economy to shore up our largest banks and other financial institutions at a time when credit has become increasingly constrained to entrepreneurs.

What better way to shake this nation out of its economic doldrums, than to support the enablers of the American Dream, our nation’s entrepreneurs, with an alternative source of capital to launch new companies and support the inventiveness and innovation that has enabled America to become the world’s richest economy.

We do not propose burdening the nation with an extensive layer of additional bureaucracy, but rather initiate a well funded, lean investment machine, that can asses and respond with an appropriate urgency to the capital requirements of qualified entrepreneurs.

Ceo4aday, supports the initiative to create the U. S. Office of Entrepreneurship and recognizes the value of our entrepreneurial based economy. We urge your support of this initiative and America’s entrepreneurs.

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The Senate committee by a vote of 18 to 5 agreed to recommend the appointment of Timothy Geithner to the office of Secretary of the Treasury. With the economy under siege by a financial and credit crisis that is contributing to rapidly expanding unemployment and an continued volatility in the markets, it was a foregone conclusion that the Geithner nomination would be approved by the committee.

Geithner has been under scrutiny for his failure to pay self employment taxes while an employee of the IMF. He recently paid the tax due and the subsequent penalties following his nomination by then President Elect Barack Obama. His nomination should be approved by the full Senate today.

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It is the politics of the unusual in Washington these days as evidenced by the Senate confirmation hearings of Secretary of the Treasury nominee, Timothy Geithner. The Obama nominee to head the treasury department, apologized today for mistakes made on previous tax returns, where he failed to pay $35,000. of self employment taxes, while employed by the International Monetary Fund. There is little doubt though that his appointment will be confirmed.

Geithner’s tax issues, have been well publicized and under any previous administration his nomination would have been withdrawn, for the Senate, would surely reject the nomination of an individual responsible for oversight of the Internal Revenue Service, who had filed questionable tax returns and failed to pay the taxes due, until nominated for his new post.

However, we are in the midst of a severe financial and credit crisis of which Mister Geithner is intimately familiar with in his role as President of the Federal Reserve Bank of New York. He along with Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Hank Paulson have been the architects of the various financial bail outs of the last several months.

Geithner’s nomination was well received by Wall Street and Capitol Hill at the time it was announced given his involvement in the financial crisis to date. Failure to confirm his appointment would only result in additional turmoil in the market. We must take Mister Geithner at his word that his tax issues, were an oversight that won’t be repeated and that he will be as gifted, in his role as Treasury Secretary, as the political establishment believes him to be.

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Previously, we have written about the journey I am on to acquire a platform business. We have presented the importance of identifying an industry and a category within the industry to focus against, as well as selecting the right private equity partner and the importance of identifying appropriate opportunities and creating a target list.

As I previously wrote, I am attempting to secure a platform company with a target revenue base of $100 to $500 million. Now that we have created our target list it is time to begin the process of making contact with the respective leadership or ownership of the target companies.

I have chosen to focus on an industry and a category that I have spent my career in and as such I am  familiar with the companies and in some cases the shareholders, executives and ownership structures of the companies that are on the target list.

I have elected to start with the proverbial low hanging fruit and have reached out to a CEO  of a company that I am familiar with  and has revenues in the $200 to $300 million range.  After several attempts to contact this particular CEO, I was able to make contact and secure an initial meeting to discuss his business. I also followed up with the private equity partner firm to confirm the availability of a senior representative from their firm to attend this initial meeting to lend credence to the discussion.

Since the Private Equity Partner will be making the principal capital investment,  it is critical to get them active in the process as quickly as possible. It is my responsibility to bring the respective parties together so that the target company is secure, that should we begin a process that we  posses an adequate amount of capital to close the acquisition on a timely basis.

The private equity partner agreed to attend the meeting , the CEO of the target was interested and as such we agreed to meet during the first week of January. In this particular case, we were able to move with reasonable haste to secure a meeting. If you are attempting to contact companies with whom you do not have an existing relationship the process can take much longer to gain an initial meeting.

Companies receive frequent inquiries from prospective acquiring parties. As such it can be difficult to be received as a serious acquirer without an introduction from a third party, that has a working relationship with the potential target. Networking through other business leaders that you work with, including bankers, is often the best method for gaining an introduction.

In our next article in this series, I will write about the results from our initial meeting with the target company as I continue a journey to acquire.

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It is time for this nation, to shake off the shackles of economic fear and focus once again on the inventiveness, innovation and entrepreneurism, that defines America for the world. We must look beyond the current economic malaise of can not and join in unison as the nation that can do.

It is time for America’s confidence in itself and its ability, to overcome economic ills and plagues, to return to its proper place in our national psyche. This is the land of entrepreneurism. The nation that is the economic model for the world. The confidence crisis that afflicts our markets and has humbled even the wealthiest among us will be overcome.

The economic engine that is America, has evolved over time, as individuals who posses great aspirations and dreams,  choose to keep moving forward, through the wall of failure to the finish line of success. We may falter at times as a nation and as individuals but in our failings, we progress and move forward. It is who we are as a nation and what the world expects us to be.

We are at times envied and at times despised. Like us or hate us we are a nation, capable of creating enormous value and unsurpassed wealth. In this current financial and economic crisis we need to shout in glory across this nation that we will slay the economic beast of recession and raise the mighty knights of entrepreneurism to reign glorious in our economy again.   

Congress and President Barack Obama,  should affirm their belief in the American way, by apportioning a percentage of the much debated economic stimulus package to create the United State Office Of Entrepreneurship.  As Ceo4aday expressed, in a previous article,a well endowed Office Of Entrepreneurship could provide venture capital to assist in startups for qualified entrepreneurs. At an appropriate point in time, the entrepreneur would have the opportunity to purchase the shares the government had acquired at an agreed upon valuation.

As venture capital and commercial loans have tightened during the financial crisis and we see the fragility of a system that has eroded our confidence,  the Office of Entrepreneurship would be an economic beacon that would provide stimulus to feed the innovation that is American entrepreneurism.    

                                                  

                                                            

                                                              

                                                                 

                           

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This nation is about to complete a transition of power that will be the most unique transfer of presidential power in our history.

A conservative son of Texas, George W. Bush the 43rd President of the United States and son of the 41st President, himself, the son of a blue blood Connecticut Senator, will transfer the power of his office to a son of a Kenyan immigrant who abandoned his son and returned to Kenya while Barack Obama was still a baby.

President Bush leaves office at a low point in his Presidency with an economy in shambles and a vocal minority on the left calling for a Congressional investigation into the actions that the Bush administration took to keep the nation safe since the events of 9/11.

President elect Obama enters the office a media superstar, embraced by the world as America’s newly anointed messiah. A super hero who will don his star spangled cape and lead this nation and the world out of a global recession toward a new found prosperity, while keeping  terrorists at bay and at long last bring a lasting peace to the Middle East.

Neither man is wholly who they will appear to be tomorrow.  History, in its’ own time will bring  perspective to the Bush Presidency and the soon to be President Obama should relish the inaugural festivities and the adoration of the masses for it may soon whither as he takes up the mantle of governing.

The images that will resonate around the world as the Bush family departs the White House and the Obama family takes up residency at 1600 Pennsylvania avenue, will broadcast a clear and succinct message to the world about America. That in the world’s richest, most powerful country, the greatest gift America has given the world is hope. The hope that any man or woman no, matter their race or their station in society, may aspire to the world’s most powerful office and attain it.

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Investors can expect an inaugural rally this week as Barack Obama is sworn into office. Wall street is primed for a rally as investors shake off negative news and embrace the anticipated stimulus package in the promise of the American Recovery and Reinvestment Plan.

Obama and his economic team will move swiftly to secure Congressional passage of an $825 Billion stimulus package designed to reignite the economy. Cash will begin to move from the sidelines and into the stock market as investors recognize that as challenging as current economic conditions are,  it is time to begin selective investments in stocks of  solid performing companies that have seen valuations decline in many cases to multi year lows.

 Investors will begin to recognize the benefits that both consumers and corporations will accrue from lower energy costs,  including $35 per barrel oil, while ignoring their concern of rising unemployment. Combined with a feel good pscyche in the market this week stocks will move higher.

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