Globalfoundries is primarily interested in acquiring IBM’s engineers and intellectual property rather than manufacturing facilities, which have little value as they are more than a decade old, said people with knowledge of the matter who asked not to be named because the talks are private. Globalfoundries, which has its own plant in New York state and a technology joint development project with IBM, will act as a supplier for IBM’s microprocessors, the people said. Terms of the deal weren’t available.
IT and technology companies hire contract workers to beat margin pressures, maintain lean benches, and facilitate just-in-time hiring in today's highly volatile market. Contract hiring provides quick access to skilled technical people and is a costeffective alternative to supplement existing IT staff without incurring recruitment or training costs.
What Palmisano didn’t leave behind was any revenue momentum.
So Rometty is going to have to squeeze costs and goose the per-share number with liberal use of stock buybacks, which have long been part of the IBM playbook.
Behind the scenes, though, Palmisano, then-CFO Mark Loughridge, and others at IBM were engaged in a sustained effort to win over Wall Street on their own terms. At its core was what Palmisano calls “the model,” a rolling multiyear road map for earnings growth and cash generation. IBM committed to increase earnings per share from $6 in 2006 to $10 in 2010, described the mix of growth and cost-cutting necessary to achieve that goal, and invited investors to judge its process along the way. It also used the metrics in the model to shape employee compensation. ...
Was it the right way to run a company? Palmisano thinks so. He’s not a big critic of Wall Street, just of corporate management teams that don’t deal with it intelligently. Since stepping down as IBM’s chairman, in October 2012, he has been spreading his ideas about good management by coaching CEOs, and in April 2014 he launched the Center for Global Enterprise, a nonprofit devoted to the study of the contemporary corporation. He’s also a member of Exxon Mobil’s board of directors.
Note: A subscription or one-time fee is required to read the interview. However, the article and Mr. Palmisano's comments are mentioned in the BusinessWeek article The Trouble with IBM.
“They have really been stymied by the financial industry, which is spending millions of dollars to fight this rule,” said Karen Friedman, executive vice president and policy director at the Pension Rights Center, a nonprofit consumer group. “All the Labor Department is trying to do is modernize a rule that is out of date.”
The agency is trying to amend a 1975 rule, part of the Employee Retirement Income Security Act, known as Erisa, which outlines when investment advisers become fiduciaries — the eye-glazing legal term describing brokers who must put their customers’ interests first. The rules are stricter for fiduciaries who handle consumers’ tax-advantaged retirement money compared to fiduciaries under federal securities law.
But it is easy to avoid becoming a fiduciary under Erisa, consumer advocates say, because brokers must first meet a five-part test before they are required to follow the higher standard: If the advice is provided on a one-time basis, for instance, the rule does not apply. On top of that, the consumer and the broker must also “mutually agree” that the advice was the main reason for the investment decision.
Actually, Tarr worked for Royal Alliance Associates, a brokerage firm owned by insurer American International Group Inc. (AIG) She encouraged hundreds of departing AT&T employees to roll over their retirement money into the kind of risky high-commission investments that Wall Street’s self-regulatory agency warns against on its website.
Tarr and her business partner reaped hundreds of thousands of dollars a year in commissions and trips to the Bahamas and Florida resorts. Not all of her clients fared as well, and 37 of them have filed complaints against her, according to Financial Industry Regulatory Authority records reviewed by Bloomberg News. Tarr and Royal Alliance say the investment choices were appropriate. ...
While retirees can generally leave their savings in 401(k) plans, financial firms entice them with cold calls, Internet ads, storefront signs and cash incentives to switch to IRAs. They tout the advantage of the IRA’s wide variety of investment choices over the typical 401(k) plan’s limited menu.
Yet that appeal can also be a pitfall for retirees offered expensive and high-risk investments. IRAs often charge higher fees than those associated with 401(k) plans, giving brokers an incentive to promote rollovers.
“You’re going into the wild, wild west when you take your money out of a 401(k) and put it into an IRA,” said Karen Friedman, executive vice president and policy director of the Pension Rights Center, a Washington-based group representing retirees. ...
The U.S. Labor Department has said it will propose rules in January that brokers and other advisers act in clients’ best interests during rollovers, a so-called fiduciary standard. The agency had announced a similar plan in 2010. Brokers are generally held to the lower standard of selling products that are suitable for their customers, meaning that they don’t have to put their clients’ interests first as long as they select appropriate investments. In January, Finra, the Wall Street self-policing group, warned members that it would heighten its scrutiny of IRA rollovers.
The Securities Industry and Financial Markets Association, which represents brokers, banks and money managers, opposes stricter regulation. It would hurt commission-based brokers, limiting consumer choice, according to the group. Disclosure rules are already sufficient to protect customers, said Ira Hammerman, the association’s executive vice president and general counsel.
Three million people signed up for workplace health coverage for this year through private exchanges, Accenture said. That’s roughly three times the number of people the firm had estimated last fall would enroll for coverage through the private exchanges — online systems that are separate from the state and federal health insurance marketplaces. ...
Private exchanges are similar to the public marketplaces, but are offered by employers to their employees. Consulting companies, including Aon Hewitt, Mercer, Towers Watson and Buck Consultants, operate private exchanges, and some insurers also offer their own versions. Walgreen and Sears, for instance, participate in Aon Hewitt’s offering, known as the Corporate Health Exchange.
Some employers are shifting employees to the exchanges to control costs and reduce administrative burdens, and to give workers more plans to choose from. (The idea is that offering plans from multiple insurers will help lower costs through competition.) While details of the exchanges vary, companies typically allocate a specific amount for employees to spend on health insurance, and then workers choose from a menu of options.
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