by Wall Street Job Report on April 27, 2012
Barclays Prepares To Apologise Over Handling Of Bob Diamond’s Pay [Here Is The City] Barclays will apologise on Friday to shareholders for the bank’s handling of the £17m pay package awarded to its chief executive, Bob Diamond. At what is expected to be a stormy annual meeting at the Royal Festival Hall in London, Barclays chairman Marcus Agius will acknowledge that the bank should have communicated more effectively with shareholders, who are also angry about the low levels of dividends they receive from the bank compared with the amount paid out in bonuses.
Chesapeake To End CEO Investment Program [Bloomberg] Chesapeake Energy says that it is ending a program that allowed CEO Aubrey McClendon to take personal stakes in the wells it drills as part of his compensation package. Its board will also review financing arrangements between McClendon and any outside groups that may have done business with Chesapeake in the past. McClendon’s arrangement with the board allows him to purchase up to a 2.5 percent interest in every well Chesapeake drills for his own investment portfolio.
Manufacturing: The Third Industrial Revolution [Economist] The first industrial revolution began in Britain in the late 18th century, with the mechanisation of the textile industry. Tasks previously done laboriously by hand in hundreds of weavers’ cottages were brought together in a single cotton mill, and the factory was born. The second industrial revolution came in the early 20th century, when Henry Ford mastered the moving assembly line and ushered in the age of mass production. The first two industrial revolutions made people richer and more urban. Now a third revolution is under way. Manufacturing is going digital. As this week’s special report argues, this could change not just business, but much else besides.
Heard On The Streets: U.S. Companies Strike Prophets [WSJ] The first quarter hasn’t provided the comeuppance for corporate results it was supposed to. With companies topping analyst estimates by an unusually wide margin, profits look far healthier now than was expected earlier. For S&P 500 companies, first-quarter earnings now look set to rise 6.3% from a year earlier, according to Standard & Poor’s Capital IQ. That is up from a projected increase of just 0.9% as expected at the end of last month. Concern that companies might beat estimates, but then signal future weakness, also appears to have been misplaced. With around half of S&P 500 companies having reported, analysts have instead been nudging up estimates for the remainder of the year.
Macquarie’s Investment Banking Headache [WSJ] Traditional investment banking isn’t Macquarie Group‘s MQG.AU +2.95% strength these days. In the year to March 31, Macquarie’s core investment banking unit, Macquarie Capital, contributed 85 million Australian dollars (US$88 million) to the group’s net profit of A$730 million. That’s a profit decline of 60% from a year ago for the division. The group’s securities business swung to a net loss of A$194 million, contributing to a 24 percent year-on-year fall in net profit for the firm as a whole.
Revealed: How Twitter’s secret offer for Instagram made Facebook pay $1B [VentureBeat] The secret details of the $1 billion deal between Facebook and Instagram are more convoluted than anyone thought. VentureBeat has learned that Instagram chief executive and co-founder Kevin Systrom first got an offer and a term sheet from Twitter, then shrewdly doubled the value of his young company by striking a deal with Facebook. On Monday, April 9, Facebook announced that it was buying photo-sharing sensation Instagram for $1 billion in cash and stock. The unexpected, mammoth deal was a shock to the Internet community, and to many of Instagram’s own investors — including new investors in a $50 million round of funding that closed prior to the buyout (Instagram has yet to confirm the round).
Wells Fargo to Buy Brokerage-Services Firm [WSJ] Wells Fargo WFC +0.27% & Co. agreed to acquire prime brokerage services and technology provider Merlin Securities LLC as it looks to expand its offerings for asset managers. Financial terms weren’t disclosed. Wells Fargo, the nation’s largest mortgage lender, expects to close the deal during the third quarter. Merlin serves more than 500 single- and multi-primed managers and provides open-architecture technology, custody and clearing services, operational support, and securities trading.