Here is a brief look at some of the recent news stories that featured Neeley students, staff and faculty. For a complete look at Neeley in the News, check out In the News Archives.
March 2, 2012
TCU’s Low named associate dean for undergrad, international programs - By Betty Dillard
George Low, associate professor of marketing at the Neeley School of Business at Texas Christian University, has been named associate dean for undergraduate and international programs at the school.
Low came to the Neeley School in 1996. He earned his doctorate in business administration from the University of Colorado at Boulder, his master of business administration degree from the University of Western Ontario, and his undergraduate degree from Brigham Young University.
Low served as chair of the marketing department at the Neeley School for four years, where he led the redesign of undergraduate and graduate course offerings and hired several faculty members. He has served on the TCU faculty senate, TCU undergraduate curriculum committee, and chaired a dean’s search committee.
Low serves as a fellow for the American Council on Education at the University of Texas at Arlington. He was nominated by TCU Chancellor Victor Boschini and selected as one of 50 ACE Fellows from a national competition.
March 8, 2012
Supply Chain Leaders Drive Growth in Revenue and Profit, According to Global Survey
CSC Publishes Ninth Annual Survey of Supply Chain Managers in Cooperation with TCU's Neeley School of Business and Supply Chain Management Review
A global survey of supply chain managers indicates that aggressively managing costs and creating a flexible supply chain are major factors for businesses in successfully growing market share as the economy rebounds. Results also show supply chain managers are investing in systems and developing partnerships that enable greater visibility with their supply chain partners.
Conducted by CSC with the support of TCU's Neeley School of Business and Supply Chain Management Review, the ninth annual Global Survey of Supply Chain Progress studied three factors believed to be critical to supply chains across visibility, analytics and flexibility. The survey results clearly show that supply chain leaders are building systems and developing partnerships that give them greater depth of visibility into a wider set of factors.
In 2010, CSC pulsed supply chain near the bottom of the economic downturn and found that supply chain managers were key contributors to stabilizing the abrupt economic down draft by aggressively managing costs and crafting a flexible supply chain to retain market share through increasing customer service. In the 2011 study, the results show the continuing importance of supply chain managers as the economy rebounds. Read full article.
March 13, 2012
More video of Flight Attendant Rant Surfaces
Bill Becker, Assistant Professor of Management, was interviewed by Clarice Tinsleyat the Channel 4 news studios in Dallas about American Airlines’ recourse and responsibility for a flight attendant’s rants during take off resulting from not taking her bi-polar medication. What should an employer do? What can coworkers do? Is this a learning eposide for employers regarding mental health of their employees?
March 17, 2012
Death-benefits broker paying dividends in spite of lawsuits - By Barry Shlachter
Brian Pardo is not only the founder and CEO of Waco-based Life Partners Holdings but also the biggest shareholder, controlling more than 50 percent of the stock. So when the troubled corporate parent of a death-benefits broker paid out $11 million in cash dividends last year, Pardo received $4.4 million -- despite three straight quarters of net losses. And this month, he’s getting more than $500,000 as Life Partners, whose business hasn’t materially improved, announced yet another quarterly dividend -- 10 cents a share, down from 20 cents.
The dividends are being paid despite multifront battles against state and federal regulators, class-action lawsuits lodged by angry shareholders and another by investors unhappy about the fractions of life insurance policies they bought through Life Partners. It didn’t help that the auditor, Ernst & Young, resigned in June and another disowned an earlier financial statement.
Wall Street no longer embraces the stock, which traded as high as $29 on the Nasdaq market in 2009 (ticker: LPHI) and changes hands at just above $4 despite a still-healthy dividend yield topping 9 percent. The stock closed at $4.21 Friday.
“I think what you now have is a classic ‘run on the bank’ syndrome, and it has to do with confidence,” said Dan Short, a professor and former dean at Texas Christian University’s Neeley School of Business who reviewed the company’s Securities and Exchange Commission filings. “Given their recent dividend, it will be very interesting to see their next balance sheet. I’ll be real concerned if their cash balance continues to decline.”
In its last filing, for the nine months ending Nov. 30, Life Partners said its cash balance had plummeted from about $24.5 million to about $16 million.
“While the balance of retained earnings would permit them to legally pay dividends, the real issue is cash,” Short said. “If they lost another $4 million in cash from operating activities and paid another $12 million in dividends, they would not have enough cash to stay in business.”
Short said there are other concerns for shareholders. He said nearly $1 million in bonuses were paid last year to Pardo’s daughter Deborah Carr and son-in-law Kurt Carr, both Life Partners executives. In fiscal 2011, Pardo himself earned $1.1 million, including a $468,560 bonus while his wife’s company, which uses the same switchboard as Life Partners, gets paid $180,000 annually for determining whether insured people on policies it brokers have died.
“And you want a strong auditor like Ernst & Young, which they lost,” Short said. Ernst said it resigned after Pardo issued a threat when it refused to sign off on the company’s financials. Losing a Big Four accounting firm, Short said, is “a giant red flag” to investors.
A Life Partners spokesman declined to respond to Short’s comments.
March 19, 2012
William Cron Earns 2012 Lifetime Achievement Award
Dr. William Cron, Associate Dean of Graduate Programs and Research and the J. Vaughn & Evelyne H. Wilson Professor of Marketing at the Neeley School of Business at TCU, has been awarded the Selling and Sales Management Lifetime Achievement Award by the sales special interest group of the American Marketing Association. The award is given each year to an outstanding scholar who has made meaningful contributions to the field of academic sales by consistently publishing sales research in top journals, being recognized for teaching excellence, encouraging sales as a career choice and fostering the professional development of others, and adding appreciably to our understanding of a sales topic or area through scholarship.
March 18, 2012
Citi payouts could use a peer review - By Aaron Elstein
When Citigroup failed a government-administered stress test last week, it was a sign of how far the bank still has to go before it fully recovers from the disastrous events of four years ago. Nevertheless, Citi is finding ways to pay top executives as if they've already orchestrated an impressive turnaround.
The bank shelled out millions in raises to its five highest-paid executives last year, even as income from continuing operations grew by only 1% and its share price sank by nearly half. The pay increases were made possible in part by Citi subtly moving the goalposts. It stopped basing compensation decisions on what fellow struggling global banks like Barclays or UBS paid their senior executives and started looking more closely at pay within much healthier competitors such as American Express and Wells Fargo.
By tweaking its peer group of banks, Citi was able to put itself in the company of more generous companies and justify paying its top people more. The switcheroo has left some banking and compensation experts shaking their heads. “I'm surprised they're playing musical chairs,” said William Lau, a former investment banker at Citi who's now a lecturer at the University of Hong Kong. “A cynic would say executives are manipulating information to make it look like they're getting paid a fair wage.”
Citi's changes to its peer group are no secret. They were disclosed in a 130-page regulatory document filed earlier this month ahead of its annual meeting. In the filing, the bank said it altered its peer group “to reflect Citi's growing focus on consumer and global payment systems.” A spokeswoman for Citi didn't respond to a request for comment.
Of course, every company of any size keeps close tabs on what its rivals are paying, and since 2006 public companies have had to disclose which competitors they look at when it comes to setting compensation.
“The evidence shows there's a bias toward companies saying an industry's biggest and best are their competitors, because the biggest and best tend to pay the most,” said John Bizjak, a finance professor at Texas Christian University's Neeley School of Business.
What's striking about Citi, however, is how frequently it changes its peer group.
In 2008, for instance, Citi was guided by the pay practices at 16 peers, including American Express, General Electric and HSBC. But in 2009, the bank cut its peer group in half as it abandoned its financial-supermarket strategy. That left it with a peer group made up mostly of big, struggling institutions such as Bank of America, Morgan Stanley and UBS, where pay levels were under heavy pressure.
Even though Citi said last year it was “seeking to maintain consistency in the peer group going forward,” it nonetheless decided to start considering several strong U.S. financial institutions as peers. Back came AmEx, as well as U.S. Bancorp and Wells Fargo, where pay was still high for top executives. The CEO of U.S. Bancorp, for example, saw his total compensation more than double in 2010, to $19 million, while Wells Fargo's CEO's award of $21 million made him the best-paid in banking in 2009.
“You wouldn't think a bank would change its peer group that often,” Mr. Bizjak said.
March 23, 2012
Unions fume as American Airlines prepares to reject labor contracts - By Terry Maxon
American Airlines Inc.’s effort to throw out its union contracts raises the question of how that drastic step will damage its relationship with employees.
For Texas Christian University business professor Daniel Short, it also raises the question of whether it’s possible to make that relationship worse. “To me, it’s a little like Japan after the tsunami,” Short said Friday. “Someone says, ‘Oh, my God, it’s going to rain.’ Is that going to cause much more damage?”
American management announced Thursday that it will go to U.S. Bankruptcy Judge Sean Lane next week and ask for permission to reject its collective bargaining agreements. Predictably, the unions didn’t like that.
“Apparently, American has no interest in achieving a constructive relationship with labor, based on trust and respect,” the Association of Professional Flight Attendants told its members Friday. “Instead, it is perpetuating its long-standing practice of preferring contention over consensus. That is truly regrettable.”
“The future of everyone at American Airlines is at stake in this difficult process,” said Bruce Hicks, a spokesman for the carrier. “It isn’t easy for us, just like it wasn’t for all of our main competitors who have been through this at least once. We are committed to successfully restructuring American into a viable, sustainably profitable carrier where all employees can have a brighter future.”
Kenneth Malek, senior managing director of restructuring and financial advisory firm Conway MacKenzie, said that American, which filed for bankruptcy Nov. 29, must remember that an airline is essentially whatever its employees make it.
“The face of the airline is the employee. The employee creates the customer flying experience,” Malek said. “Without an employee who is driven to provide excellent employee service because of good relationships with their employer, you have an airline whose performance could well continue to deteriorate.”
He cited Continental Airlines Inc. as an example of what bad management-labor relationships can do, as well as what a good one can do. Continental filed for Chapter 11 bankruptcy in 1991. It emerged with the same management team in 1993 but still struggled.
“They were rated in the bottom rung across the board in all the metrics — lost baggage, on-time arrivals, customer satisfaction with the flying experience, customer satisfaction with the frequent-flier program — because of bad employee morale.”
The carrier didn’t turn around until a new team of executives, led by Gordon Bethune, took over in late 1994.
“When the new management team was brought in, they really focused on fixing the issue of the employee morale,” Malek said, “and made it apparent to employees that the employer and the employees were on the same team, and there was a sense of mutual well-being.” Malek said American’s big problem is that its revenues have lagged. Unable to do anything about that in the short term, it has to turn to cost-cutting, he said.
Short said there’s no question that American and its unions have to improve their working relationship.
“American and the labor unions have a rocky history. They just like to fight with each other. It’s not a really healthy marriage,” Short said. “What I don’t think labor has fully embraced yet is the tremendous financial difficulty American has been in all of these years. Right now, we’re in a crisis, and the issue is survival,” he said.
Short said the situation at American is “analogous to a husband and wife standing in a burning building, fighting about who started the fire. Let’s get out of the building. Let’s put the fire out. And once the fire’s out, let’s begin pointing fingers.”
March 28, 2012
Wednesday on WBAP morning news - By Brian Estridge
6:47 a.m. - American Airlines’ unions hanging on by a thread. Dr. Daniel Short, TCU’s Neeley School of Business, interviewed live on WBAP.