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I am Shaun Manzano, a recent MBA graduate, with specialized training in business modernization, change management, increasing productivity and efficiency, team building - organizational communication, training and knowledge management.

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Shaun Manzano

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Sunday, April 26, 2009

CEO Pay/Salary Cap or Not?

I’ve reviewed an article similar to the topic that is being brought up in your posts. I do not think the right approach in viewing CEO pay is from an ethical standpoint, but instead from a perceived value approach. What is the magic number or what is the price tag to keep that one distinguished member of the team? Within the corporate world, CEO is visionary and the financial performance – company stock – net worth etc are the metrics of this individual’s report card. For a CEO of a sports team, wins and losses are the kicker for the success of individual CEO’s as they hire the right management team to develop that brilliant winning team lead by the coach and their players. The Value is sometimes easier to see in that realm. But why is it in the corporate world, that vision isn’t so clear? That’s because the team has many challenges to seek, which they aren’t concentrated around a game with rules and conditions semi predicted to which a team can prepare itself for. So we ask ourselves what are the contributors to the success or the perceived value for a given corporate performance. This all revolves around competition, economic conditions, market valuations (stock in general), corporate culture & leadership, productivity of the corporation etc. So if there was a way to just categorize a corporation’s performance as a win or a loss, then a clear cut valuation method could be placed on putting a price tag on a CEO’s pay.
"There is no particular right number. That's what's difficult for people who criticize executive pay (S. Polczer & C. Herald, 2009).”
Enjoy the article.


S. Polczer & C. Herald (March 25, 2009), The Art Of Matching Pay To Performance; Petro-Canada chief earns more despite lethargic stock, retrieved on 25 April 2009, from web site http://www.calgaryherald.com/life/Suncor+trails+rival+income/1425557/story.html

Strategy plan or luck?

A strategic plan, what is it and what are the current results of having one?

The Fortune 500's biggest winners, article “Even as the economy crumbled, these 20 firms managed to make big money.”
Was it due to a strategy plan or luck?

“Exxon posted its fourth-straight year of record profits, enduring wild swings in oil prices and a worldwide drop in demand in 2008. Falling oil prices in the latter half of 2008 hurt its oil production arm (CNN Money.com , 2009).”

Did the company plan for this intriguing forecast that the world of economics brought for them? For a change, they did in a way, for the other part no. This was due to the simple fact that crude oil was made cheaper for the production of gasoline and oil (CNN Money.com, 2009). A company that is worth 26.1 billion has to have some kind of strategy and luck combined in this case as the economy effects us all. If the strategy wasn’t in place the economy alone would have took the company for what it was worth along time ago.

I have produced some pointers from the industry and within the text for strategy plans.

Where are we now – organizational assessment.
Financial Stability
Technology application
Competitive positioning

Strengths and weaknesses – Opportunities and Threats (SWOT Analysis)
What improvements do we forecast that we will need to implement
Competitive goals – alignment
Upgrades to current equipment

Financial forecast
What monies do we project to support strategic alignment of future improvement, upgrades and competitive alignment?
10 year plan for financial support

Future Checklist
As conditions continue in the market, predict future requirements for new competitive advantages and further future growth.


CNN Money.com (2009) Even as the economy crumbled, these 20 firms managed to make big money, retrieved on 24 April, 2009, from web site: http://money.cnn.com/galleries/2009/fortune/0904/gallery.f500_mostprofitable.fortune/index.html

U.S Debt Turns into Our Debt

U.S Debt Turns into Our Debt

One of the reasons why the U.S. in a financial crisis is due to the extreme growth in the real estate market tied to the flawed lending practices to increase non traditional ability to pay level of standards purchasing power.

How many times in the last two decades has the U.S. been in a recession?

How world crisis has the U.S. been involved in during that period? (Persian Gulf, Iraq etc.)

Where has the attention been on the whole time? Was it on other countries or ours?

While this occurred, the rich became richer, and many people have been taken advantage of. Those that can pay cash for a home are not subject to these claims of being taken advantage of. Who does this affect? Well we are all in use of the financial system that has been built over the years made possible through the Federal Reserve System.

So how do we pay for homes? We use this vehicle called a mortgage, for those who do not know this; it’s another term for a loan, which involves the lenders insight in the borrower’s ability to pay. The financial industry manage their accounts receivable (your ability to pay them back) through their general set standards.

Here are the categories:
Character – the borrower’s history of paying bills – credit report
Capacity – The borrower’s quantity of money borrowed and repaid – credit report
Capital – debt to income ratio, how much debt (open credit cards, car notes, all debt) compared to incoming salary.
Collateral – what do you have in value (stocks, other homes paid off, retirement accounts or liquid assets?)
Conditions – this is the part that is currently based on the industry trends or economy situations, 1st time buyer loans etc.

One of the traits that helped excel the mortgage loan increases were the subprime loans which made the loans available to those that lacked Character. This was definitely an adjustment in the backs “conditions” that are apparently not so favorable today. When the general standards of credit are not met more loan defaults occur, causing the industry to have substantial amounts of defaulted loans. Another twist to this, there was a lot of dishonest financial institutions that took advantage of the system to gain financial profits. Who is paying for those profits today? Who is stuck with the bad credit ratings?

To see where your state is in this cloud of financial woe visit: http://www.newyorkfed.org/mortgagemaps/

Forward thoughts!
Plan, Plan, and Plan some more!
Debt for school vs. debt to have to buy fun.
Plan for the debt, when you will repay.
Determine how much risk you are taking to meet the conditions that you have planned for.
Plan for additional risk, determine worst case scenario and develop a plan that will provide you support through the situation
Remember no plan is full proof that why it is called a plan.

If you would like to add to this post, please submit your comments or suggestion for new topics.

Shaun Manzano

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