Restricted stock awards also would fully vest immediately upon his death. The company’s pay practices earned the company a failing grade from The Corporate Library, an independent corporate governance research firm. [3] The compensation awarded to Toll rated a “High Concern” from The Corporate Library. [4] Even as the company lost $297.8 million for the fiscal year ended Oct. 31, 2008, Toll received $8.8 million in total compensation for the year. That’s twice as much as the $4.6 million median compensation for
The company had forgiven millions of dollars in loans and granted excessive bonuses to executives. It was also found that Tyco’s stock price was inflated. (Kaplan, 2009) The main impropriety was discovered when District Attorney, Morgenthau, was investigating Kozlowski for tax evasion on some exotic art work. The investigation uncovered that many other questionable business practices had ensued. (Kaplan, 2009) The illegal and unethical behavior occurred when (CEO) Kozlowski, and (CFO) Swartz, awarded millions of dollars to themselves and other executives that were not approved by the board of directors.
By early 1987, problems at Enron emerged. Despite the evidence of potential financial misconduct by top execs at Enron’s oil trading unit in Valhalla, N.Y., Lay allowed the execs to continue at the company. Months later, those same execs were found to have committed other improper acts that opened the company up to as much as a billion dollars in losses. As a result, the office doors in Valhalla were closed. Although this pales in comparison to the scandal 15 years later it does have eerie similarities.
It lost $1.7 billion. Some additional problems included: * Merger with US Airways Group blocked by Federal antitrust regulators which led to expensive contract deal leaving united with the highest labor costs in the industry * In 2000, pilots and mechanics put pressure on management for new contracts which led to flight cancellations and loss of business customers * Rise of low-cost, low-fare airliners that competed for business and did not have the same overhead costs which United could not match. In September of 2002, Glenn Tilton was brought on as the new CEO for United Airlines as the board of directors believed someone from outside the airline industry would help turn things around. It was only three months later into his career at United, in December 2002, that under Tilton’s leadership as CEO, the company filed for Chapter 11 bankruptcy. The bankruptcy lasted until February 2006.
Business Ethics Homework 6 20 March 2013 GlaxoSmithKline Case 1. Since 2005, GSK was hit with several severe lawsuits regarding product liability. When Andrew Witty was assigned the chief executive role of the company, post-merger, the ice of shares declined 50 percent, which harmed the company’s earnings, sales and reputation. The first ethical lapse came about when GSK was criticized for selling drugs to the public without informing its buyers of the detrimental side effects. The detrimental product was Paxil, designed to relieve depression, generated disastrous side effects such as addictive behavior and birth defects.
FBN has made significant investments (property, plant and equipment) on account, thereby getting into financial trouble by owing their creditors quite a bit of money. FBN made too many investments (on account) and their cost of services increased faster than their sales. Yet another indicator of financial woes is the Profitability Analysis. By observing the Return on Assets, we can see that in two years, the ROA declined from 7.5% to 0%. Such a decline (and such a low percentage) indicates that management is not efficient in employing the company’s assets to make a profit.
I. Introduction and Comment * The Duplan Reorganization Plan and Proposed Compromise Settlement The reorganization plan of Duplan Corporation estimated its balance of cash at $27.1 million and stock at $27.2 million. The total $54.3 million were distributed to its creditors that included banks, trade creditors, note holders, debentures holders as well as some small claimers. Since the assets were less than $69 million of allowable debt, the original equity owners will be wiped out and there were some controversies among creditors regarding to distribution of cash and stock. In our opinion, the reorganization plan of Duplan Corporation underestimated its assets and distributed available cash and new stocks unfairly.
According to Dempsey’s research (2008), U.S. airline industry had made a huge lost on profit, by the end of 1991. It was recovered in late 1990s, but once again, the industry suffer a bigger loss in early 2000s (Dempsey 2008). This second drop of profit is probably due to the September 11 terrorist attack. The impact of the September 11 was a loss in revenue of U.S. airline of $19.6 billion in 2001-2002 (IATA). From 2011 to 2005, a total loss was $57.7 billion (IATA).
The other two men that were involved and also charged with this crime were Hisashi Mori and Hideo Yamada. The charges for this crime consisted of “inflating the company’s net worth in financial statements for five fiscal years to March 2011.” These three individuals did all of this because there were some “risky investments” that went under in the 1980’s. The final decision has not been made yet, that I know of, but they could serve up to ten years in prison and/or fines close to 130,00 dollars. The company itself could face a much worse fine than the individuals. So, Olympus and it’s three employees could face heavy fines and jail time for the unethical decisions they made back in the 80’s, and the company may also have many lawsuits from its shareholders.
1. Problem Statement & Objective The Great Atlantic & Pacific Tea Company, Inc. (A&P) suffered from continued loss on the net income from 2000 to 2003, which caused a general concern on its high risk of bankruptcy. However, conflicting with analysts’ estimation, the company’s third-quarter financial results surprisingly exceeded their expectation, and stock price rose 23% to $9.28 per share on six times average daily trading volume. Our objective is to dig out more information from A&P’s financial reports and make suitable recommendations to investors/analyst/debt holder through further analyzing its business strategy and financial ratios by the end of 2003. 2.