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Damned if they do, damned if they don't

By Gary S. Mogel

October 30, 2006 6:01 am ET

Corporate directors are bashed when they tolerate executive excess - and when they try to stop it.

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Arbitrators in Massachusetts last week found that MassMutual Financial Group, based

in Springfield, owes fired chief executive Robert O'Connell $50 million in salary, benefits and lost incentives.

He had been accused of manipulating his supplemental-compensation account in his favor by $30 million, buying a company-owned condominium at way below the market rate, using a company aircraft for personal reasons and assorted other misdeeds.

The company violated Mr. O'Connell's employment contract by failing to give him an opportunity to rebut the charges before terminating him, the three-arbitrator panel wrote.The board's procedures were a "sham," and their conduct was "Draconian," according to the arbitrators.

Patents pay

Financial advisers soon may be using a new measure of company value - patents per share. The 300 companies that own the most valuable patents have outperformed the Standard & Poor's 500 stock index by an average of 3 percentage points during the past 10 years, according to Ocean Tomo LLC in Chicago.

The data research firm last week introduced an index of 300 companies - chosen based on the value of their patents - and priced and published by the American Stock Exchange in New York.

Patent-rich companies in the index include such intellectual-property stalwarts as AT&T Inc., IBM Corp and 3Com Corp.

But patents don't guarantee profits. Also in the index is Ford Motor Co. in Dearborn, Mich., which last month reported a third-quarter loss of $5.8 billion - its worst quarter in 14 years.

Marking time

If saving for retirement is so important, then why is only one day of the year set aside to encourage it?

That day was Sept. 8, which came and went with little fanfare.

Long-term-care insurance must occupy a loftier place in the financial planning pantheon - it is on tap for all of next week, Nov. 5 through 11.

However, life insurance gets the entire month of September.

"What can you possibly say about life insurance that could take a whole month?" asked Jesse Slome, executive director of the American Association for Long-Term Care Insurance in Westlake Village, Calif.

Calling actuaries

Actuarial analysis similar to what insurers use to calculate premiums can determine which players to trade and acquire or the best pitch - or pinch hitter - said John Dewan, owner of Baseball Info Solutions in Bethlehem, Pa., dur-

ing a seminar sponsored by the Arlington, Va.-based Casualty Actuarial Society last week in Boston.

A former actuary, Mr. Dewan now charts fastballs.

'Dumb' defense

Rare coins may be an excellent investment for certain wealthy individuals, but they seem too risky for a state government agency.

Last week, testimony began in the trial of Toledo, Ohio, coin dealer and prominent Republican Party fund-raiser Thomas Noe, who is accused of squandering $50 million entrusted to him by the Ohio Bureau of Workers' Compensation in Columbus for investing in rare coins.

Defense attorneys are blaming the investment contract, which they have called "dumb." The contract basically gave Mr. Noe the authority to use the $50 million as he saw fit.

But that doesn't mean he was authorized to steal it, even if that was "as he saw fit," prosecutors contended.

The Republican politicians who benefited from his largess - including Gov. Bob Taft and Sen. Mike DeWine - are busy distancing themselves from him.

Like our spin? E-mail comments or suggestions to Charles Paikert at cpaikert @crain.com.

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