RE: RE: RE: RE: RE: RE: RE: About Management at YL
Hello Spock Jr. (I’m a big fan – but prefer old Spock like in those classic TNG episodes)
Thanks for your reply. I don't care about the past. I am thinking about the future of this company and future value for the shareholders. I believe that given the difficult decisions that will be inevitable over the next 12 months, it would be unwise to have Tellier as a Director. Reason: conflict between running the business as a manager (duty to employees) vs. serving as a director (duty to shareholders). Of course these duties have many common objectives, which may be mutually beneficial, but there are also opposing scenarios for the two groups. When things are going well, I can see how someone could have one foot on each plank, but when things go badly, it gets more complicated.
Take one small example of a potential conflict:
The company may need to make cuts moving forward to number employees in order to "trim the fat" as others have pointed out before - a business needs to be efficient and a significant reduction in its workforce may be necessary given the decline in print revenue and number of clients. (We know that online probably requires less salespeople than print – look at Google – YLO online is surely somewhere in between). A reduced overall workforce would result in a decrease in expenditures, and an increase in the efficiency of the individual employee. The shareholder would benefit from a more rapid debt repayment or return of equity to shareholders in dividends (eventually). More importantly, it would show that the company is willing to make difficult decisions to reposition it such that assets (people) are appropriately deployed without redundancies.
From the employee point of view, this could be bad for morale for an already fragile group of workers. It would be "tough" as a CEO to cut a substantial portion of the workforce as you feel some sense of responsibility to the employees. BUT... the smaller workforce *could* be motivating to the remaining employees as it means that their potential bonuses could be larger, they are seen as indispensible, valuable, etc.
Tell me, do you think that when making decisions as a director, Tellier could insulate himself completely from his duties as CEO to his employees? Do you think that he will always have the best interest of the shareholders 100% in mind? Will be able to "change his hat" with ease when these types of conflicts arise? Or will he simply have to excuse himself from the room every time one of these decisions is made? Finally, will the board be strong enough to not allow Tellier's sway as a manager and employee proponent to influence their decision to ensure BEST VALUE FOR THE COMMON SHAREHOLDERS? Notice that I am not asking “did Tellier have our best interests in mind?” I am asking – will he, given what is likely to come in the future? This is my opinion only, of course.
I don't want to put Tellier in that position, I want him to focus on his job as a CEO. I want him to have open dialogue with the BOD, but more importantly, I want the BOD to work completely independently from management, on behalf of the shareholders. I want them to take a fresh look at the company - it is now 2012 - there are great opportunities here but many many high hurdles to jump to again realize the true value of this company.
Lestat, I respect your opinion and your view as a devil’s advocate. I look forward to your reply.
In the end, if Tellier is elected to the BOD, I can only hope that he is a good skier. A good skier navigates the mountain at speed with both skis working in parallel. At times, the skis may point towards each other (pizza) but when they are pointing away from each other things go badly fast.
B&Y