A study by Yan Zhang at Rice University's Jones Graduate School of Management indicates about 27 percent of those CEOs studied left their job within three years. Zhang says it makes a difference if a candidate rises from within the organization.
"If you compare an outside CEO to an inside CEO, right, an inside candidate, the board members have much better chances to observe, to interact, with inside candidates. Asymmetry problem associated with an insider candidate is much less because of prior co-working experience."
Zhang studied 204 company leaders from 1993 to 1998. Many companies institute mandatory retirement ages. Inadequate succession preparation means a higher likelihood that the board will make a poor hiring decision.
"If a prior CEO was routine, like a retirement, then a company is more likely to be prepared for the CEO's succession, right? You know the CEO will then leave office in two years, and they very likely have started to think about who could be potential internal candidates, who could be potential external candidates."
Zhang was reached in Beijing, where she is visiting a Chinese graduate business school.
The White House says President Bush is considering new proposals to help stimulate the economy. White House counselor Ed Gillespie said there is a "short window" for Bush to come up with fresh economic policy and that aides are constantly studying the options. He spoke before Bush delivered a speech on the economy. Gillespie said the president wouldn't unveil any new proposals during the remarks, timed around the ceremonial swearing-in of new Housing Secretary Steven Preston to be the administration's point man on the slumping housing market and subprime lending crisis.
Congressional auditors say if oil and natural gas prices stay as high as they've been in recent months, the government could lose as much as $53 billion over the next 25 years in energy royalties because of an adverse court ruling. The Government Accountability Office says that the soaring price of crude oil and natural gas also means the windfall that companies will enjoy from the court ruling also could increase by billions of dollars. In October 2007, a federal court ruled in a claim originally filed by Kerr McGee Corporation that the government can't require companies that are exempt from paying royalties on oil and gas taken from federal land and waters to pay them if market prices reach a certain level. The Interior Department has urged that the case be appealed but has left the decision to the Justice Department.
Wall Street companies are continuing to scale back their borrowing from the Federal Reserve's emergency lending program. A Fed report says the companies averaged $8.26 billion in daily borrowing over the past week. That compares with $12.3 billion the previous week. The program begun on March 17th is one of several steps the central bank has taken in response to the fallout from housing, credit and financial troubles.
Freddie Mac's CEO is trying to reassure shareholders that the mortgage finance company's fortunes will improve, after a year in which its share price was sliced by more than 60 percent amid a prolonged housing slump. Chairman and CEO Richard Syron told shareholders at the company's annual meeting that the second-largest U.S. buyer and backer of home mortgages will be able to emerge from the housing downturn with a robust business. Syron reiterated previous expectations, saying the company expects revenue growth of 15 percent to 20 percent this year, but expects to see losses from bad mortgages rise to as much as $6 billion this year.
Comcast says that by early 2010 it plans to offer consumers in most of its markets internet service so fast they will be able to download a high-definition movie in minutes. A Comcast official says the nation's second-largest Internet service provider--and biggest cable TV operator--will deploy a technology capable of delivering up to 100 megabits of data or more per second in 20 percent of its markets by the end of 2008. At a media conference in London, Senior Vice President Marlene Dooner said the speed was "very competitive" with Verizon's fiber-optic Internet service, which had about 1.8 million subscribers in the first quarter. Among cable operators, Comcast has been one of the most aggressive in deploying a wideband technology called Docsis 3.0 to fend off competitors as more users download videos over the Internet. Dooner also said Comcast expects to move the majority of its analog television channels to digital in most markets by early 2010.
YouTube videos are coming to late-model Sony LCD flat panels. Sony says YouTube and wired.com have been added to the video providers for a $300 module it sells for its LCD flat panel TVs. The Internet video link module is a small box that fits into the back of some 2007 and 2008 LCD TVs. It connects to the home broadband router and is controlled by the TV remote. Video service comes free with the module. Yahoo!, AOL, Sports Illustrated and style.com are among existing video providers for the device. Similarly, the Apple TV set-top box streams YouTube videos to a TV set, but it works with any high definition set. Also Sony is introducing two high-end LCD TV models with backlighting produced by light-emitting diodes, or LCDs. The models are 46 inches and 55 inches diagonally. Prices have not been announced.
Efforts to implement free wireless high-speed internet service nationwide have hit a snag in Washington. Federal Communications Commission Chairman Kevin Martin tells the Associated Press that the plan won't be voted on at the agency's meeting this month. But he adds that he does hope to present the proposal to the full commission. The effort to make the country a huge, free, wi-fi hotspot was first envisioned by wireless start-up M2Z Networks of California. Under the plan, the FCC would auction a chunk of the broadband spectrum to a single bidder who would use it to build the wi-fi network. The plan has been met with concerns about possible interference and a proposed censoring feature that has riled free-speech advocates.
Striker Fernando Torres wants to be surrounded by more stars at Liverpool. So Torres is urging feuding owners Tom Hicks of Dallas and George Gillett, Jr., to start spending more. The interview with Torres is on journalist Guillem Balague's Web site. Liverpool finished fourth in the Torres debut season in the Premier League and was ousted in the Champions League semifinals by Chelsea. The season was marred by a dispute between the club's American owners, who have struggled to agree on anything since January and have often criticized the other through media interviews. Hicks owns the NHL Dallas Stars and MLB's Texas Rangers.