$100 billion? That’s a lot of money.
And could corporate governance have saved it?
You bet.
Read my latest report, which assesses the governance ratings of AOL and of Time Warner prior to the merger, and learn how.
The claims I make are that if governance had been taken into account no one would have agreed to the merger in the first place, thus saving everyone $100 billion (the loss in market capitalization from the time of the merger to the time of the demerger).
The fact is AOL’s governance was rated very high risk. Time Warner’s governance was rated very high risk. And governance is not like mathematics: two negatives don’t make a positive. And two wrongs don’t make a right.
One of the biggest indicators of governance risk? The bucketloads of stock options that were due to vest immediately.
And talking of bucketloads of stock options, I daren’t even THINK how many stock options Larry Ellison (Oracle) is exercising as we speak, or Jonathan Schwartz (Sun Microsystems) for that matter. Or executives at Ticketmaster and Live Nation…. The list goes on.
Everyone’s all worried about monopolies? Forget monopolies, let’s talk governance disasters.
Contact us right now for a governance assessment of the next merger on your horizon. It might make the $100 billion difference.
Paul Hodgson - Senior Research Associate
