9 CEOs With the Absolute Worst Reputations

Joe Raedle—Getty Images

A good manager understands the contribution of his or her employees. In return, managers often receive the respect of their workers. And indeed, more than two-thirds of American employees approve — even like — their companies’ chief executive officers.

Some CEOs, however, are not popular with employees. At nine major companies, 40% or fewer employees gave their CEOs a positive review. Sears Holdings’ CEO, Edward Lampert, received positive reviews from just 20% of Sears employees and from just 26% of Kmart employees, the lowest rated CEO. Based on 24/7 Wall St.’s independent review of employee ratings provided by Glassdoor, these nine CEOs have the worst reputations.

According to Glassdoor spokesperson Scott Dobroski, “While this list was compiled by independent research by 24/7 Wall St., it’s clear that some CEOs may want to take note that their own employees feel they can improve when it comes to leadership.” 24/7 Wall St. identified a number of factors that can hurt a CEO’s reputation within his or her own company. These include a CEO’s propensity for humiliating the company in public, poor stewardship of the company and a compensation package that employees perceive to be excessive.

A number of CEOs have failed to represent their companies adequately in public. On some occasions, a CEO’s public conduct was nothing more than a nuisance, while in other instances it became a liability for the company. Abercrombie & Fitch CEO Michael Jeffries is an infamous example of the latter. His comments about the retailer’s target audience — “cool, good-looking people” with “washboard stomachs” — have created negative feelings. Both the press and general public heaped scorn on Jeffries for his blatant lack of sensitivity and the company’s customer discrimination.

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Many of the CEOs with poor reputations also ran their companies poorly. Xerox CEO Ursula Burns has repeatedly claimed the company’s 2010 buyout of Affiliated Computer Services would rekindle Xerox’s years of flagging fortunes. Instead, Xerox’s services business has faltered and revenue flattened. The acquisition’s once-prized assets have barely turned out to be valuable at all. Less than one-third of Xerox employees gave Burns a positive review.

One measure of stewardship is the evaluations employees gave their companies. Companies run by the CEOs on this list received scores of less than 3 out of 5 as an overall company rating, indicating workers were unhappy with their jobs and the companies. Employees of Sears Holdings’ Kmart stores gave their company just a 2.0 overall rating.

Dobroski noted that the relationship between overall rating and CEO approval was not a surprise to him. “The same is conversely true for the top [rated CEOs]. CEOs with high approval ratings tend to lead companies with higher than average satisfaction ratings as well.” According to Dobroski, this is because “leadership and the tone for the company going forward is generally set at the top and then trickles down to the rest of the company.”

Layoffs can also breed animosity toward management among employees. Since the beginning of 2013, GameStop has closed 500 stores. It is unlikely that company CEO J. Paul Raines is popular with current and former employees for that decision.

Other cuts can have a similarly negative effect on employee morale. Last year, Forever 21, run by CEO and founder Do Won Chang, cut employee benefits and moved a number of workers from full-time to part-time status. The company denied this was intended to limit some employees from working more than 30 hours per week — which would have required the retailer to provide workers with health coverage as part of the Affordable Care Act.

Continued store cuts at Sears Holdings, which are central to the company’s plans to streamline operations, may also create negative feelings toward management among workers.

Extravagant pay can also lead employees to resent their CEOs. The three members of the Dillard family who run Dillard’s not only serve as management, but they also control the company’s board. The three brothers were paid a total of more than $58 million between 2011 and 2013. With a share price that has risen dramatically in recent years, from just a few dollars to nearly $100, investors may feel this money has been earned. It is unlikely that employees were as enthusiastic.

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The chief executives with the worst reputations may want to look at their more popular counterparts at other companies to determine how they can improve and win over their employees. According to Dobroski, well-liked executives focus on “clearly communicating their vision, including being transparent about where the company is going, how they’re going to get there, and how each employees plays a vital role in this.”

However, for many executives there is little incentive to improve those perceptions without direct intervention from the stockholders. Despite the company’s weak financial performance, and his own rash statements, Abercrombie & Fitch’s Jeffries only stepped down as chairman of the board after hedge fund Engaged Capital launched a campaign to split the roles of CEO and chairman. Sears Holdings’ Lampert not only serves in both these roles, but he also engineered the 2005 merger of Sears, Roebuck & Co. and Kmart, widely considered to be a failure. Additionally, ESL Investments, Lampert’s investment fund, owned 48.5% of all shares outstanding as of March 19.

In order to identify the CEOs with the worst reputations, 24/7 Wall St. examined employee reviews at Glassdoor. To be considered, companies had to have a minimum of 500 reviews. Of the more than 225 companies with more than 500 comments, 24/7 Wall St. identified the nine CEOs with the lowest favorable reviews — 40% or lower. Positive reviews of Eddie Lampert, CEO of Sears Holdings and subsidiary Kmart, were both below 40%. Reviews of Michael Jeffries, CEO of Abercrombie & Fitch and subsidiary Hollister, were also both below 40%. Data on average wages by position were also from Glassdoor. Additionally, we reviewed financial statements from these companies, where available, filed with the Securities and Exchange Commission. Employee counts are from companies’ own financial statements, as well as Yahoo! Finance. Estimates of employee counts of Forever 21, a privately held company, were taken from Forbes.

4. Ursula M. Burns
> Company: Xerox
> CEO rating: 30%
> Company rating: 2.74
> Years as CEO: 5
> No. of employees: 140,000

Ursula Burns made headlines in 2009 when she became the first African-American woman CEO of a Fortune 500 company. Burns has been exceptionally visible during her tenure, making frequent public appearances even as the company’s prospects have faltered. Burns pushed for the $6.4 billion acquisition of Affiliated Computer Services that closed in 2010, claiming it would help the business. Xerox Corp. (NYSE: XRX), though, has yet to see any substantial benefit from the deal. Late last year, the company called the police prior to announcing 168 layoffs at its Cary, N.C., facility, noting they “were expecting trouble.” It was the second round of a total of roughly 500 layoffs. This treatment of employees stands in contrast to how the board treats Burns, awarding her an average of $13 million a year between 2010 and 2012. One former employee, commenting on Glassdoor, said, “Most upper management have received salary increase over the last 6 years, but staff has not.”

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3. Do Won Chang
> Company: Forever 21
> CEO rating: 26%
> Company rating: 2.4
> Years as CEO: 30
> No. of employees: 30,000

Under founder and CEO Do Won Chang’s leadership, Forever 21 employees commented on Glassdoor that they receive minimum wage, often have to work late into the night and get very little time off. Chang has often received attention for his actions over the years. In August, a company memo sent to employees stated that salaries and benefits would be cut, which many suspected was done in order to avoid paying health benefits as mandated by the Affordable Care Act. He also decided to have a reference to a Bible passage, John 3:16, sewn to the bottom of the retailer’s carrying bags, which may not sit well with some of his employees and customers. Former employees on Glassdoor claim that they have been threatened with termination if they called in sick.

2. Bill Dillard II
> Company: Dillard’s
> CEO rating: 24%
> Company rating: 2.4
> Years as CEO: 16
> No. of employees: 38,900

Like many of the companies run by unpopular CEOs, Dillard’s Inc. (NYSE: DDS) retail employees are paid poorly. According Glassdoor, a sales associate can expect to make $10.72 per hour. In contrast, the three family members of the clothing retailer who control the company, William Dillard II, the CEO, the company’s president, Alex Dillard, and its executive vice president, Mike Dillard, have paid themselves a total of $54 million over three years between 2010 and 2012. Bill Dillard II also did not win over employees when the company settled a class action disability discrimination lawsuit brought by former employees for $2 million in 2012. The company allegedly forced employees to reveal confidential medical information in order to be allowed sick days. Employees are under pressure to meet a sales quota that many of them have labeled as unrealistic. One current sales associate stated on Glassdoor, “Sales quotas are not entirely reasonable. Hard work doesn’t always pay off, especially if no one is in the store.”

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1. Edward S. Lampert
> Company: Sears Holdings (Sears/Kmart)
> CEO rating: 20%
> Company rating: 2.5
> Years as CEO: 1
> No. of employees: 226,000

Lampert created Sears Holdings Corp. after coordinating the merger of retail giants Kmart and Sears, Roebuck & Co. nearly a decade ago. Since then, Lampert has served as chairman of the holding company, and recently took up the role of CEO as well. Lampert controls nearly half of all shares through his fund ESL Investments. Sears has continued to flounder under Lampert, who has repeatedly spun off its various assets and stores into independent entities, including Land’s End and Sears Automotive. Same-store sales, revenue and earnings have all continued to disappoint. A Businessweek profile of the company last year criticized Lampert for pitting divisions against one another. This, according to the article, has discouraged divisions from collaborating. According to one reviewer on Glassdoor, “communication from top levels is weak,” a common complaint for the CEOs with the worst reputations.

For the rest of the list, click here.

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TIME Technology & Media

There’s Turmoil Inside Disney’s Magic Kingdom

The Princess Diaries Premiere
WireImage/Getty Images Disney Characters during The Princess Diaries Premiere at El Capitan Theatre in Hollywood, California, United States.

If Disney’s commercials are to be believed, its theme parks are places where children go to live out their dreams. For a lot of adults inside Walt Disney Co. itself, however, that dream spot seems to be the office currently occupied by Bob Iger.

Iger was initially planning to vacate his CEO suite this year but pushed that date back to June 2016. That delay has allowed a palace intrigue to emerge as several top executives seen as contenders for the job have been jockeying to be named successor. Adding to the uncertainty is that Disney has no president, a position traditionally used to groom future CEOs.

Whoever wins the honor will have a tough act to follow. Under Iger, Disney’s brand and business is as strong as it’s been in four decades and there is no clear path to maintaining the double-digit profit growth Disney has been enjoying.

This month, speculation about Iger’s successor heated up after Anne Sweeney, who headed Disney’s ABC TV group, stepped down to pursue what she insisted was her own dream of directing TV programs. That left Thomas Staggs, who heads Disney’s resorts division, and CFO Jay Rasulo as the leading candidates, along with a few dark horses like Disney International chairman Andy Bird also in the race.

CEO transitions at Disney have a habit of starting of happy and ending on a tragic note. After Walt Disney died, the company enjoyed some of its best years under the management of his brother Roy, who served as CEO from 1929 to 1971. After Roy stepped down, three CEOs managed the company over a 13-year period that saw the stock stagnate and the company became a cultural anachronism in the cynical 70s.

After financial problems spurred a few hostile takeover attempts, Disney brought in Michael Eisner in 1984. Eisner led Disney into animation franchises like the Lion King and non-traditional hits like Pretty Woman as well as a big presence on cable TV. But in the early aughts, Disney again floundered and Eisner was ousted after some in the Disney family accused him of creating a “rapacious, soulless” company.

That paved the way for Iger, then Disney’s president to take on the role of CEO. Under Iger’s leadership, Disney has seen its stock rise 250% – five times better than the Dow Jones Industrial Average. Iger has shut down, sold off or cut back properties like Touchstone and Miramax and bought others like Pixar for $7.4 billion and Marvel for $4 billion.

Iger’s Disney is closer in spirit to the one run by the Disney brothers, focusing its brand on animation franchises and theme parks, but pushing it all up to an international scale. Disney has been working on a $4.4 billion resort in Shanghai and has raised ticket prices in some theme parks two times in the past year. (So far, nobody at Disney is calling the price hikes “rapacious.”)

Iger seems determined to leave Disney on a high note. When the board extended his tenure by 15 months, it not only allowed internal CEO candidates to better prepare themselves (while also intensifying the competition), it allowed Iger to put some finishing touches on his legacy: Shanghai Disneyland and Star Wars Episode VII will both open a few months after Iger steps down, while Frozen is on track to become the biggest animated film of all time.

Disney’s next CEO will need to scramble to create an impressive follow-up act. Raising theme-park prices will be tough without driving away families. ESPN remains a highly profitable media property, but to grow Disney will need to find others, which are hard to come by. Weak emerging markets may limit Disney’s ability to find markets as promising as China’s.

Above all, Disney’s next CEO will have to grapple with an issue that Iger has largely side-stepped. Media is going digital, which will create new opportunities while challenging old business models. Disney’s fastest growing segment is its Interactive division, which grew 26% last year. But the unit has been losing money, and its growth rate lags digital media companies like Facebook.

Far from fading in the 21st Century, the Disney brand is as strong as ever. Inheriting that brand will be something of a double-edged gift for whoever moves into Iger’s office. It’s one thing to attain your dreams. It’s another entirely to keep them alive for years to come.


GM CEO Mary Barra’s Stark Apology: ‘Terrible Things Happened’

General Motors CEO Mary Barra introduces the 2015 GMC Canyon pick-up truck at the Russell Industrial Center in Detroit, on Jan. 12, 2014.
Tannen Maury—EPA General Motors CEO Mary Barra introduces the 2015 GMC Canyon pick-up truck at the Russell Industrial Center in Detroit, on Jan. 12, 2014.

Mary Barra, who only recently became CEO of automaker General Motors, has apologized for the broadening controversy surrounding the company's safety recalls and promised the auto giant would improve the process in the future

General Motors CEO Mary Barra addressed GM employees in a contrite message Monday afternoon as executives at the American auto giant seek to address a widening scandal over safety issues affecting millions of cars. GM has admitted that it was aware for nearly 10 years of an ignition issue that affected 1.6 millions cars and can interfere with air-bag deployment. The safety issue has resulted in at least 12 deaths, and two congressional investigations and the Department of Justice are now reportedly scrutinizing GM’s operations.

“Something went wrong with our process in this instance, and terrible things happened,” Barra said in her video message to employees. “We will be better because of this tragic situation if we seize the opportunity. And I believe we will do just that.”

Barra said the company has sent out letters to customers, and recalled an additional 1.55 million autos as part of its ongoing internal safety review. GM is increasing production lines to help replace parts in faulty recalled cars and dedicating a slew of new customer-service representatives to deal with the problem, she said. “We are completely focused on the problem at the highest levels of the company, and we are putting the customer first and that is guiding every decision we make,” Barra said. “That is how we want today’s GM to be judged. How we handle the recall will be an important test of that commitment.”


Here Are the 5 Companies Making a Killing Off Wars Around the World


Global military spending was down in 2012 for the first time since 1998. And for the second year in a row, arms sales from private industry to governments were down as well last year.

Despite the decline in military spending, the business of war remains a good one. The 100 largest arms producers and military services contractors recorded $395 billion in arms sales in 2012. Lockheed Martin, the largest arms seller, alone accounted for $36 billion in such sales during 2012. Based on figures compiled by the Stockholm International Peace Research Institute (SIPRI), 24/7 Wall St. examined the 10 companies profiting most from war.

The withdrawal of U.S. troops from Iraq and Afghanistan is among the biggest reasons for the drop in military spending, according to SIPRI. Spending on these campaigns fell from $159 billion to $115 billion between 2011 and 2012.

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Austerity also contributed to cuts in military spending. Budget control measures were responsible for a $15 billion reduction in U.S. military expenditures in 2012. Belt-tightening in Europe also had an impact on arms sales. In 20 of the 37 countries in Western and Central Europe, military spending declined by more than 10% between 2008 and 2012.

In an interview with 24/7 Wall St., Dr. Samuel Perlo-Freeman, director of the SIPRI Programme on Military Expenditure and Arms Production, said that while government military spending is waning in the United States and Western Europe, many developing countries are increasing their expenditures. Arms sellers in several countries, most notably Russia, are benefiting from their nation’s military budget expansion, Perlo-Freeman noted. While U.S. military expenses declined in 2012, Russia’s increased by an estimated 16% that year.

Companies reacted differently to the sales downturn. L-3 Communications spun off part of its business in 2012 to limit exposure to declining government military spending. Other government contractors wrote off significant losses in response to decreased military spending, including General Dynamics, which took a $2 billion goodwill charge related to declining opportunities in the defense sector.

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Faced with possible tough times, some companies have engaged in corrupt practices. Last year, the CEO of Italian aerospace and defense firm Finmeccanica was charged by Italian prosecutors with fraud and corruption related to the company’s sale of helicopters to the Indian government. However, according to Perlo-Freeman, this is nothing new. “The arms industry has always been associated with corruption both in international arms transfers and sometimes in domestic procurement.”

Arms sales have remained concentrated among the same small number of companies for more than a decade. The top 10 companies have largely remained in place because industry consolidation in the 1990s made them dominant players, even through fluctuations in government military spending. “These companies tend to have their core competencies in getting money out of governments,” Perlo-Freeman said.

To identify the 10 companies profiting most from war, 24/7 Wall St. reviewed the 10 companies with the most arms sales based on SIPRI’s list of the top 100 arms sellers in 2012. Arms sales, including advisory, planes, vehicles and weapons, were defined by sales to military customers, as well as contracts to government militaries. We also considered the company’s 2012 total sales and profits, and the total number of employees at the company, as well as nation-level military spending, all provided by SIPRI.

These are the companies profiting the most from war:

5. General Dynamics
> Arm sales 2012: $20.9 billion
> Total sales 2012: $31.5 billion
> 2012 profit: -$332 million
> 2012 employment: 92,200

Like many of its defense-sector competitors, Virginia-based General Dynamics Corp. (NYSE: GD) felt the sting of the decreased U.S. military spending. The company, which specializes in aircraft, land and expeditionary combat vehicles, and shipbuilding, lost $332 million in 2012, and its arms sales totaled $20.9 billion, down from $23.3 billion the year before. The loss was due, in large part, to a $2 billion goodwill charge related to declining business opportunities in the defense sector. In its most recent year, the company reported a 16.4% drop in sales in its combat systems group, for which the U.S. Army is major customer.

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4. Raytheon
> Arm sales 2012: $22.5 billion
> Total sales 2012: $24.4 billion
> 2012 profit: $1.9 billion
> 2012 employment: 67,800

While Raytheon’s 2012 arm sales of $22.5 billion were slightly lower compared to 2011, they remained high enough for the company to rank fourth among arms companies. The company, which traces its history back to 1922, assisted the United States in multiple wars, as well as the Apollo 11 moon landing. Raytheon Co. (NYSE: RTN) provides services in a variety of fields, from air and missile defense to radar and cybersecurity. In all, 92% of the company’s sales came from arms sales in 2012. But while the U.S. has cut defense spending in recent years, Raytheon has benefited from a surge in exports to foreign countries, which has helped to offset federal government belt-tightening.

3. BAE Systems
> Arm sales 2012: $26.9 billion
> Total sales 2012: $28.3 billion
> 2012 profit: $2.6 billion
> 2012 employment: 88,200

BAE Systems is the largest non-U.S. military contractor. It had $26.9 billion in arms sales in 2012, which represented some 95% of the company’s total sales. However, the British company’s year-over-year arms sales declined that year from $29.2 billion in 2011. Cuts by England’s Ministry of Defence have taken a toll on the company. As the U.K.’s largest military contractor, it received 13.7% of procurement funds spent in 2012 to 2013. In May 2012, the company announced it would close its Armstrong plant — which made tanks for the nation in World War I and had been in operation since 1847 — and cut 330 jobs as a result. BAE’s failed $45 billion merger with fellow defense contractor EADS in 2012 also hurt prospective sales of England’s main fighter jet, the British Tornado, for which BAE makes the parts.

2. Boeing
> Arm sales 2012: $27.6 billion
> Total sales 2012: $81.7 billion
> 2012 profit: $3.9 billion
> 2012 employment: 174,400

Although arms sales accounted for just 34% of Boeing’s revenue in 2012, Boeing Co. (NYSE: BA) was still the world’s second largest military contractor that year. In all, the company’s total revenue was nearly $82 billion in 2012. The company’s commercial airplane segment accounted for a large portion of its sales, with $49.1 billion in revenue that year. Boeing ended 2012 with $3.9 billion in profit and with more than 174,400 employees. Last year, Boeing and union workers in Washington state engaged in heated negotiations, with Boeing threatening to move jobs away from the state unless union workers agreed to concessions related to their pension plan.

1. Lockheed Martin
> Arm sales 2012: $36 billion
> Total sales 2012: $47.2 billion
> 2012 profit: 2.7 billion
> 2012 employment: 120,000

In 2012, Lockheed Martin Corp. (NYSE: LMT) led the world in arms sales, even as its arms sales declined slightly from $36.2 billion in 2011 to $36 billion in 2012. Such sales accounted for 95% of the Maryland company’s total revenue. The company, which employed 120,000 workers as of 2012, specializes in aerospace, global security and information technology systems for the military. It is also known for the C-5 Galaxy Class airplane — the largest air military transport plane in the world. Lockheed Martin has been the largest recipient of government procurement contracts and the top-ranked company on the Washington Technology Top 100 for 19 consecutive years. However, this has also left the company exposed to changes in the federal budget. In October 2012, at the request of President Obama, the company held off on firing thousands of workers that it previously warned it would have to lay off due to military spending cuts.

For the rest of the list, click here.

Everything Is Awesome If You’re Lego: Toy Company Can Do No Wrong

Giant Lego bricks stand on display outside the Lego A/S assembly plant in Kladno, Czech Republic
Vladimir Weiss—Bloomberg/Getty Images

How good of a run has Lego been on in recent years?

Consider the following:

It’s the subject of the country’s top movie. The Lego Movie has gotten great reviews and is easily the biggest box office hit of the year thus far. The movie has been such a success that not one but two Lego spinoff films are already in the works.

Sales, revenues, and profits are soaring. As Bloomberg and others noted this week, a report from Lego stated that company revenues rose 10% year over year, and that net income was up an impressive 9%. In a statement accompanying the release, Lego CEO Joergen Vig Knudstorp said, “In less than 10 years, we have now more than quadrupled our revenue.”

Growth is especially good in China. Lego soon expects China, the world’s largest country by population, to be one of its “core markets,” alongside Europe and the U.S., according to the Associated Press.

It expects to keep creaming the competition for years. Reuters focused on Lego’s modest announcement that the company anticipates staying “moderately ahead” of the pace of overall sales in the global toy market in the years to come. Bear in mind that the sales surge enjoyed by Lego has occurred a time when major toy companies such as Mattel have seen sales slump.

Even the “worst” Lego series is huge hit. When Lego Friends was launched in 2012, the girl-friendly series—featuring loads of pink and purple bricks for building beauty shops, fashion workshops, and the like—was bashed as offensive. The Lego line is so “jam-packed with condescending stereotypes it would even make Barbie blush,” summed up one group, which put Friends on a short list of the worst toys of the year.

Plenty of people—including, most importantly, young girls and their families—thought differently. Lego Friends wound up being honored by Toy Industry Association as the Toy of the Year in 2013. In terms of sales, Lego Friends has been a monster success story. “The line doubled sales expectations in 2012, the year it launched,” an NPR story published last summer on the Friends phenomenon stated. “Sales to girls tripled in just that year.”

All said, Lego has to agree with the signature song of its hit movie: “Everything Is Awesome.”

TIME Companies & Industries

And the World’s Most Admired Company in 2014 Is…

Apple Inc. Makes Education Announcement
Ramin Talaie—Bloomberg/Getty Images

An old stalwart

For the seventh straight year, Apple has been named the World’s Most Admired Company by a jury of its peers in Fortune. Despite a rocky year which saw the tech giant’s stock jump and fall and a sometimes-hot, sometimes-cold public battle with billionaire investor Carl Icahn, Apple is still the envy of the corporate world’s eye.

From Fortune’s ranking:

Top 50 rank: 1
Rank in Computers: 1
(Previous rank: 1)
Overall score: 7.94

Why it’s admired:
The iconic tech company known for the iPhone and other stylish and user-friendly products is back in the top spot on this year’s list, for the seventh year in a row. Apple, the most valuable brand on the planet according to Interbrand, brought in $171 billion in revenues in FY2013 and is flush with cash, but fan boys and girls (not to mention the market) are getting antsy to see its next big product. Bets are on a smartwatch or AppleTV, but the company is also reportedly turning its attention to cars and medical devices.

Amazon and Google were No. 2 and No. 3, respectively, having switched places from their 2013’s rankings. Among the other tech companies in Fortune’s top-50 “all star” list: IBM at No. 16, Samsung at No. 21, Microsoft at No. 24, and Facebook at No. 38. The full list of most-admired companies and a description of the methodology used to choose them are available here and in the issue of Fortune that comes out today.


TIME Retail

Survey: Men Would Prefer to Have Sex on Valentine’s Day

Getty Images

And other fascinating statistics about Cupid's big day

Flowers, jewelry, chocolate, teddy bears — the conventional Valentine’s Day gifts have a decidedly feminine slant to them, but a new survey shows that men think they’re the ones really cleaning up when it comes to Valentine’s Day: Guys think their significant others will spend $230 on them, while women expect that their main squeezes will spend, on average, $196 on them. Both men and women who are in relationships expect an average of $240 will be spent on them.

According to the Chase Blueprint Valentine’s Day Survey, though, both genders might be a little overly optimistic when it comes to their expectations for Valentine’s Day. Women said they plan to spend an average of $27 less than the $98 guys say they’ll shell out — which means neither gender plans to spend nearly as much as they want to have spent on them.

Not into shelling out the big bucks? A new RetailMeNot.com survey hints at one way couples can avoid breaking the bank this Valentine’s Day: Two-thirds of men and 30% of women say they’d rather have sex than get a gift for the holiday. Chase found that 43% of men and about half as many women don’t want a Valentine’s Day gift.

Fewer people are celebrating Valentine’s Day this year by buying gifts. The National Retail Federation’s new survey of more than 6,4000 people finds that respondents celebrating the holiday plan to spend an average of just under $134, about three bucks more than last year, but the number of people planning to celebrate it this year has fallen — just 54% compared to 60% last year. RetailMeNot finds that almost 20% of people don’t plan to spend anything on their significant other for Valentine’s Day.

About 70% of the more than 1,200 respondents to the Chase survey say they’d rather be surprised than pick out their own present for Valentine’s Day. Gift recipients prefer chocolate over flowers, tech toys over jewelry and dinner out over a home-cooked meal, although RetailMeNot finds that the number of people who want to stay in for the evening has gone up 10 percentage points since last year. The NRF survey finds that more than a third of people will give flowers or take their significant other out for the evening, about half of people will give candy and around 20% plan to buy jewelry.

The NRF survey also looks at Valentine’s spending beyond what people get for their significant others: Almost 60% will get something for a family member, 22% get gifts for friends and almost 20% get Valentine’s Day presents for their pets.

TIME Retail

Target To Speed Up Smart Cards After Security Breach

The company plans to have more secure REDcards by early 2015

Target is accelerating a $100-million plan to develop chip-enabled smart cards with better security, after the company suffered a major cyber breach late last year.

In an opinion article published in The Hill newspaper, Target’s chief financial officer John Mulligan wrote that since the data breach, Target has sped up its plan to have chips that keep customers’ personal data more secure in their REDcards by early 2015. That date is six months earlier than their original plan. Currently, credit and debit cards in the U.S. have a magnetic strip that contains buyers’ financial information, but the new smart cards Target is working on will have a chip that encrypts buyers’ personal data during a purchase. So even in the event that a credit card number is stolen, the information is meaningless without the chip. Mulligan also suggests that requiring PIN numbers would add another level of security.

“Nothing is more important to Target than our customers,” Mulligan writes. “We are who we are because of their trust and loyalty. That is why it is so important to move forward with a more secure technology.”

Just hours later, Mulligan apologized for the breach during a Senate Judiciary Committee hearing on data security.


Why Shareholder Value Should Not Be the Only Goal of Public Companies

Twitter employees sit in a cafeteria at the company's headquarters in San Francisco, Oct. 4, 2013.
Robert Galbraith / Reuters

Carl Icahn’s bid to force online auction giant eBay to spin-off its payment processing business, PayPal, and eBay’s resistance to the idea once again highlights the disconnect that often exists between company shareholders and management.

It is widely accepted that companies should have only one goal, which is to maximize returns for investors. This works well for small and mid-size privately held businesses where senior managers often hold major ownership stakes and so the company’s interests are perfectly aligned with investor returns. It also works well for private equity sponsored deals where the investors play an ongoing and thoughtful role in the management of the company.

For large enterprises, however, and particularly public companies, the reverse can be true.

Contrary to popular belief, shareholders do not always hold a preferred claim to a company’s profits or assets. The rights of debt holders, employees, retirees, and even some large customers can supersede those of equity holders at different times and circumstances (such as bankruptcies). What this means is that CEOs tasked with running a company should focus as much on the preservation and growth of the business as on the maximization of shareholder wealth. In the free market system and in the long-term, the two will automatically coincide, even if in the short-term they diverge.

Unfortunately, executives at major companies today are under pressure to maximize returns for investors every quarter, or for activist shareholders looking to cash in quickly on some perceived opportunity, which can lead to hasty business decisions, poor strategic planning, and acquisitions or divestitures that backfire later. More importantly, they are compensated based on short-term price performance rather than long-term business feasibility, which can misalign the interests of both management and current shareholders with the true welfare of the company.

That is not to say that CEOs and Boards prioritize equity holders over other stakeholders and the best interests of the company in every case but the obsession with shareholder value can sometimes compromise a company’s innovation and strategic direction in favor of immediate profits. Recent examples of such myopic decisions include Blockbuster’s lost opportunity to transition to digital (thanks to Carl Icahn) and JCPenney’s failed makeover as a substitute for business strategy (thanks to Bill Ackman).

Another point to remember is that shareholders in public companies do not assume the liability of true owners. The legal structure of public companies and business insurance policies shield equity holders from the bulk of corporate liability, including from indebtedness and legal problems. This weakens shareholders’ claims to pure ownership of the company – since assets and liabilities should theoretically be two sides of the same coin. Conversely, lenders arguably could lose a lot more from poor performance and employees often have their entire livelihood invested in a company and so those stakeholders have at least some claim to ‘ownership’ as well.

Realistically, of course, we live in a capitalist society and our individual prosperity depends on it. Stakeholder capitalism, good as it sounds, is not necessarily the panacea for corporate woes nor any more fair than our existing system. The right and productive way to look at it is for companies to simply recognize the fact that nobody has a 100 percent entitlement to the rewards of a successful business, and to balance out the needs of different constituencies with the long term needs of the company itself.

Financial prosperity in the long-term depends upon many things, including risk-taking and strategy, and not just on meeting quarterly earnings projections, and if management needs to make decisions that prioritize the former over the latter, that is simply good business practice.

Sanjay Sanghoee is a political and business commentator. He has worked at investment banks Lazard Freres and Dresdner, as well as at mutli-strategy hedge fund Ramius Cowen. He has appeared on CNBC’s Closing Bell, MSNBC’s The Cycle, TheStreet.com, and HuffPost Live on business topics. He is also the author of two thriller novels.

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