Yearly Archive: 2009

Stand and deliver

Last night’s CBC National news was the first with Peter Mansbridge standing. I found myself checking his suit for wrinkles far more than necessary. I found none, not even in the crotch area, the usual worst place. In what is clearly a rip-off of Wolf Blitzer’s CNN Situation Room, the entire hour is done with everyone standing. At times, they went to ludicrous lengths to stick with the awkward format. Mansbridge and a reporter stood facing each other on a riser the size of a ping-pong table with a rear screen in between them that projected points they were making....

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Bastille, be gone

It’s hard to believe that Edgar Bronfman Jr. has just been charged, along with Vivendi executives, with misleading investors. First of all, the $34-billion Seagram-Vivendi merger in question took place in 2000. Surely the statute of limitations has run out long since. Second, poor Edgar Jr. was not exactly on the inner circle with Jean-Marie Messier, the Vivendi CEO who bought everything in sight except the Arc de Triomphe, which was visible out his office window. Once he got fed up with Messier, Edgar Jr. worked with other directors to oust the megalomaniac in 2002. Not exactly how you pass...

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A tale of thirty-eight cities

Manulife has received approval to sell insurance in Shantou, a port city in China. While all the attention of late has been on variable annuities sold by Manulife in the U.S. and the strain that has put on the balance sheet, in many ways the future of the firm is in China. After first receiving permission in 1996 to enter the Chinese market in Shanghai, Manulife has been adding cities at a fast pace. Manulife is now licenced in 38 cities and has more than ten thousand agents. Most of those cities are huge. Shantou has a population of five...

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Back to the future

Manulife’s new CEO Donald Guloien has a management style that’s rare. During a recession when most business leaders are trying to squelch pessimism, Guloien is busy promoting something: prudence. “I think at this stage of the cycle, prudence and conservatism is called for,” Guloien told Bloomberg’s Sean B. Pasternak in an interview. “The prudence our grandmothers had, the prudence farmers have in the Midwest; a little more of that needs to be applied in the executive suite.” That’s why Guloien cut the Manulife dividend, reduced sales of variable annuities (VAs) and hiked hedging on VAs already sold. Praise followed. “Don’s...

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Happy Birthday

Today marks the tenth anniversary of the first day of trading on the Toronto Stock Exchange when Manulife Financial went public. Since 1999, the company has quadrupled in size, much of it due to the $15 billion takeover of Hancock in 2004. Market cap has gone from $9 billion to $37 billion. More importantly for shareholders, anyone who was part of the initial public offering, hung on, and reinvested their dividends in shares, has enjoyed compound annual returns of more than 12 per cent. Bernie Madoff had to commit fraud to offer his clients the same! To celebrate, the company...

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A modest proposal

With a fall election in the offing, controversy will soon begin around the televised debates. In the last couple of elections, there has been much to-ing and fro-ing about which party leaders would be included. The television networks have tried to limit the numbers, but there was such a foofarah that they finally relented and all five parties (Conservative, Liberal, NDP, Bloc Quebecois and Green) were represented. The outcome was akin to a schoolyard brawl with too many voices and too little time. I’d like to go one step further and urge that we not only reduce the number of...

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Drama or dramamine?

Harvey Schachter, the Globe and Mail reviewer, started off talking about my book in a positive way, calling it “well-researched and intelligent” but then veered elsewhere saying it lacked drama. Fortunately, other commentators have praised the book. Joe Martin, Director of Canadian Business History at the Rotman School, has said the chapter on succession “is the best I have ever seen on corporate succession in a Canadian context.” Tom D’Aquino, CEO of the Canadian Council of Chief Executives, said: “This work makes for an important addition to business history in Canada.” As for drama, I would have thought the first-time...

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Blood, sweat and tears

Amidst all the kerfuffle about Manulife cutting its dividend, one question has gone unasked. But before I get to that, let’s review the proceedings. In a bid to build what he calls a “fortress” company, newly minted Manulife CEO Donald Guloien cut the dividend in half. The step, he said, would raise capital levels and yield $800 million annually for acquisitions. But capital is already hale and hearty. Manulife’s Minimum Continuing Capital and Surplus Requirements (MCCSR) must now be at 250, a historic high, and well above the regulator’s required 150. When Michael Lee-Chin recently sold the rest of his...

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