NYSE Euronext (NYSE:NYX) watched one of their members of the Board go down in flames. Ricardo Salgado tendered his resignation because he did not receive a majority of votes. As per by-laws he had to walk the plank and tender his resignation. Now as per common sense did he or the NYSE Euronext not have a sense of where his support stood. Maybe not because he essentially went kamikaze and went down in flames.
Apparently there is some concern about his ability to commit time to NYSE Euronext activities. Apparently he did not attend too many board meetings so the investors had to ask why should we vote for him. Good question. The nominations process which is controlled by the board and management could not see their way through the arithmetic of failure and put up his nomination anyway. OK so he must be a smart guy and you know what NYSE Euronext executives are not a bunch of dummies. So why was he nominated, why did he accept the nomination and why was he defeated. Read the press release for a few clues.
In thanking him NYSE-Euronext remarked on his twenty years of contribution. so like he is connected and can make stuff happen just like the godfather. The next sentence is crucial. and I quote ” However, we completely understand the business priorities and his leadership role in the Portuguese financial community which requires his full attention, and we wish him continued success.”
Leadership in Portugal which is a financial basket case is an interesting perspective. The whole euro-crisis has more back room maneuvering than front page headlines. Portugal of course is in need of help and Ricardo Salgado is working on it. Institutional shareholders who have the numbers in a proxy battle gave him the thumbs down. Now this is a time where I wish I worked mornings at the Fed Reserve and afternoons at the CIA. (Probably best job combo in whole world) and we could find out the true rationale for agreeing to stand re-election and the institutions finding it too distasteful and voting no.
So here is my take on it. NYSE Euronext made a long term decision and said lets keep this guy. He has been good for/to us in the past and we expect more of the same in the future. Proxy shareholders who think about the board look at his current overwhelming involvement in Euro zone financial problems and throw him over board. Short term decision A+. Medium to long term F-.
Is the NYSE Euronext so sensitive to one board member? Well no and that’s good. But it’s the mix that eventually counts. Short term thinking with board selections is not good. So the big gumba shareholders filling in the proxy cards and directors votes. Ya blew it.
To those of you blaming Euro games it will not matter.
George Gutowski writes from a caveat emptor perspective.
- Banco Espirito Chief to Tender Resignation From NYSE Board (dealbook.nytimes.com)