| Topic Name: |
What HEW Needs |
| Message Name: |
And therein lies the problem... |
| Date Posted: |
02/17/2006 |
| In Reply To: |
many investors would prefer to see management doing MORE to focus on short-term results at the expense of keeping Hewitt an ongoing entity. If there was investor frustration at the purchase of Cyborg or Exult, or the signing of so many new contracts, it was because that meant deferring the recognition of value in order to build a stronger foundation for an ongoing business. What management has done has actually been to focus on the long-term growth of the business despite the pressures from Wall Street to meet quarterly targets. And the stock price has shown it. That management didn't adjust benefits, eliminate free lunch, and cut more staff sooner was probably at least a curiosity to many investors. Management could easily be doing far more in their own interest without even coming close to an ethical line. As for a yes-man board, the largest individual shareholder of Hewitt stock is not Dale, nor Bryan, nor all the top execs put together. It's one board member. He has more Hewitt stock on the line that Dale will accumulate in his lifetime. If you think he is playing nice with the CEO because he wants or needs more board positions, you should do some homework.
It amazes me how people somehow equate going public with some kind of greed on management's part. Before the IPO, fewer than 500 people shared in ALL of the profits. And all of those profits were distributed each year -- nothing was (or could be) retained in the business except for real estate investments and capital expenditures such as new computing and telecom equipment. The hurdle to becoming one of those 500 was getting higher each year. Now people are complaining because they have to pay for lunch instead of realizing that if they all pulled in the same direction, their newfound wealth (even if it is only a few hundred shares or some small amount of options) would pay not only for their lunches for life, but those of their spouses and kids. I think any investor who regularly read this board (and I'm sure the number is VERY small) would probably think "screw the employees, nothing will make them happy, and give us the money."
As for Warren Buffet, what makes you think he's disinterested? What makes you think he's even aware? There are lots of things he doesn't own and it's not because he has evaluated and rejected them all. |
| Message: |
Perception. Dale can talk -- ok, have something ghostwritten for him -- about building long term growth for the firm when just about every one of the 20000+ people who don't have a paper net worth of $1,000,000 in HEW stock are looking at more short term focus with each passing month. The Street demands short term growth and there is a helluva fight going on between trying to ignite the growth engine while continually lighting quarterly fireworks.
Meanwhile, the vast majority of us see the fireworks as they impact all around us and none of us see much opportunity to share in the potential longer term wealth.
Yes, there is at least some opportunity for the rest of us to get that payout now -- unfortunately, unless we somehow manage to figure out how to buy a handful of shares at retail price, no one is making it easy for us to get those shares, unless you're lucky enough to pick up a grant.
While more broadly tossing stock at the associates would be a nice gesture, it isn't happening because the vast majority of people would do what they did with the grant we got at IPO -- sell all the shares as soon as possible and pocket the cash.
In my opinion, Dale has to go. The engagement scores are our way of voting him no confidence. He provides no vision that people believe in, his credibility is shot, and he has even abandoned any attempt at communicating face to face with associates. He hides behind ghost written Source postings.
Like our former CFO, Dale has played out his string and he needs to step aside for someone who can build a new culture and vision and LEAD. The old paternalistic SWAN actuarial company has to celebrate what built the company, but move into the 21st century and talk about creating a company that truly breaks new ground in delivering HR-related services. The opportunity is industry leadership and expertise; the risk is the steady drain of subject matter expertise and client relationships. Lack of leadership and short term focus are not going to move the company forward.
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