Wednesday, April 16, 2014

The Ukraine crisis Boys from the blackstuff - Economist

The Ukraine crisis

Boys from the blackstuff

http://www.economist.com/news/briefing/21601048-government-kiev-has-no-obvious-counters-russian-inspired-occupations-industrial?fsrc=scn/tw/te/pe/ed/boysfromtheblackstuff


The government in Kiev has no obvious counters to Russian-inspired occupations in the industrial east

Apr 19th 2014 | MOSCOW, RUSSIA, AND SLOVIANSK, UKRAINE | From the print edition
AT A strangely stilted press conference six weeks ago, just after the annexation of Crimea, Vladimir Putin, Russia’s president, was asked if Russia would fight a war with Ukraine. “I want you to understand me clearly,” he answered. “If we make that decision, it will only be to protect Ukrainian citizens. And let us see if [Ukrainian] troops try to shoot their own people, with us behind them—not in the front, but behind.”
Intended to reassure Russians, his words carried a sinister double meaning: Russia was prepared to use Ukrainian civilians as human shields. Now it is doing so. In the past week it has engineered a situation in which the Ukrainian government must either appear entirely ineffectual or risk attacking some of its own citizens and, in so doing, provide a pretext for further Russian action—even, perhaps, invasion.

On April 6th armed men seized the administration buildings in Donetsk and Kharkiv, as well as the security-service buildings in Luhansk—the three capitals of Ukraine’s eastern provinces. Barricades went up and local enthusiasts gathered on them, but without massive public support. On April 12th, in an apparently co-ordinated way, the crisis moved to a new phase. Police and security-service buildings fell to rebels in towns all across the region, many of them situated on road and rail links that would have strategic value in the event of a Russian invasion. These smaller, poorer towns where the family of the deposed president, Viktor Yanukovych, has strong influence were an easier target than the cities.
Unidentified, well-equipped soldiers led many of the occupations. They were followed by local armed separatists and ordinary civilians. Many police officers switched sides. Russian television channels, disconnected a few weeks ago because of their ceaseless propaganda, have been turned back on. Passing through a checkpoint set up by pro-Russian rebels in Sloviansk, 100km from Donetsk, a man on the barricades says cheerfully that the situation unfolding is “just like Crimea”.
Alien invasion
Russia denies that the “little green men” who co-ordinated the occupation of Crimea, some of whom have now been seen in Donbas, are its soldiers. But last year Russia’s defence ministry boasted about the creation of a “special operations” unit comprising personnel who could act as “illegals” in neighbouring countries, and many think this has now been seen in action. Ukrainian security forces say they have intercepted a telephone conversation between pro-Russian forces and their Russian minders in military intelligence.
The occupations have shown how little authority Ukraine’s government has in the east. Yulia Tymoshenko, a former prime minister and presidential candidate, urged the government (which she effectively controls) not to use force. One reason is her lack of confidence in Ukraine’s security services. A botched operation would enrage the public and give Russian forces a pretext to move deeper into Ukraine. Another reason is the presidential elections scheduled for May 25th, which Ms Tymoshenko still hopes to win, despite trailing behind Petro Poroshenko, a billionaire who supported the February revolution.
The acting president, Oleksandr Turchinov, pledged large-scale anti-terrorist operations, issued ultimatums and set deadlines—but to little effect so far. On April 15th government forces freed a small airport at Kramatorsk which had apparently been taken by militants, but which does not seem to have been defended. “It looks a bit farcical, says Fyodor Lukyanov, the editor of Russia in Global Affairs, a journal. “The militants are pretending that they are taking control of things and Ukrainian forces are pretending they are freeing them.”
The farce could yet turn bloody. As The Economist went to press, armoured personnel carriers containing Ukrainian troops who had surrendered to pro-Russian crowds were entering Sloviansk. In a telephone call to Angela Merkel, the German chancellor, on April 15th Mr Putin described Ukraine’s operation as a serious escalation. Ukraine, he said, was on the brink of a civil war. This was what he said about Crimea to justify annexing it, citing NATO’s action in Kosovo—which at the time Russia deplored—as a precedent. Mr Putin would not need a genuine conflict, such as that in Kosovo, to make a move; but there are enough pro-Russian and pro-Ukrainian feelings on the ground to spark one.
Though Mr Putin may yet move militarily against Ukraine, perhaps under the guise of a peacekeeping mission, perhaps even to recognise independence for the south and east, he seems unlikely to want to annex any more of the country. The bribes that would be needed to ensure the acquiescence of a good chunk of the population would cost a great deal. In Crimea Russia has pledged to bring salaries and pensions up to Russian levels; to do the same for Donetsk would cost twice as much. Subsidising the region’s coal mines, as the government in Kiev has done for years, would be another burden on the Russian economy. Much better simply to gain influence on the government in Kiev by turning the east into a constant source of trouble which keeps Ukraine chaotic, dysfunctional and unpalatable to the West. “Bringing the troops across the border would be seen as a failure of the Kremlin’s game,” says Mr Lukyanov.
Alexander Dugin, one of Russia’s most vocal imperial nationalists and anti-American ideologues, agrees that an occupation of south-eastern Ukraine would not be in Russia’s interest. He argues that the Maidan revolution in Kiev was an American plot to drag Ukraine into the European Union and NATO. Having failed to make this happen, Mr Dugin says, America is now trying to provoke violent clashes to justify putting NATO military bases in Ukraine.
As Russia’s plans depend on a new federal structure for Ukraine which gives increased power to the areas over which it holds sway, it might seem odd that the most recent flare up of separatism in the east began just after Arseniy Yatseniuk, Ukraine’s acting prime-minister, confirmed that the government intended to decentralise power and engage with local elites there. Rinat Akhmetov, who controls a great deal of industry in the Donetsk region and is Ukraine’s richest oligarch, volunteered himself as a mediator. Those might seem to be the sort of moves towards federalisation that Russia would seek to encourage.
But they are also developments designed to build bridges between the government in Kiev and the businessmen and politicians in the south and east, and Russia wants none of that. Pro-Russian forces are stirring up anti-oligarch sentiment because Russia knows that they might back the central government rather than see separatism ascendant. What is more, for Russia to endorse the government’s effort would be to recognise its legitimacy and that of the revolution which swept it to power, both of which the Kremlin rejects (it refers to Ukraine’s government as a “junta”). Thus a proposal by Mr Turchinov to hold a national referendum on federalisation was almost ignored by Russia.
Rather than allowing the government in Kiev to delegate power to the regions, the Kremlin needs the eastern regions to grab power for themselves, creating parallel government structures that undermine the central government’s legitimacy. That is why Mr Putin wants a representative from southern and eastern Ukraine at international talks on the crisis—a proposal Ukraine, Europe and America reject.
Russia’s short-term objective is to sabotage the elections. “National elections cannot take place without Donetsk,” says Maksim Shevchenko, a journalist close to the Kremlin. Its long-term aim is to stop Ukraine ever moving towards Europe. Given that the February revolution was powered by aspirations to do just that, this would provoke unrest in Kiev and in western Ukraine. That is not a problem for Mr Putin. Russia wants to turn Ukraine back into a buffer state, with a level of disorder it can turn up or down. In the end, Ukraine may end up barely a state at all.


9 CEOs With the Absolute Worst Reputations - TIME

9 CEOs With the Absolute Worst Reputations

http://time.com/51222/9-ceos-with-the-absolute-worst-reputations/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+timeblogs%2Fcurious_capitalist+%28TIME%3A+Business%29

April 7, 2014
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Nine CEOs with the Worst Reputations

By Douglas A. McIntyre and Vince Calio April 4, 2014 3:55 pm EDT
9. J. Paul Raines
> Company: GameStop
> CEO rating: 40%
> Company rating: 2.7
> Years as CEO: 4
> No. of employees: 17,000
Despite a business model that some say is outdated, and disappointing per-share earnings, GameStop Corp. (NYSE: GME) CEO Paul Raines received a total compensation package of roughly $11.4 million during the company’s 2012 fiscal year, a 95% increase from 2011. In fact, the combined compensation of GameStop’s top five executives, including Raines, was $34.7 million in 2012, up from $19.4 million in 2011. Comparably, the average hourly salaries of sales associates and game advisors were just above minimum wage. According to Glassdoor, employee morale is low not only due to the modest pay, but also because of the increased number of store closings. Some analysts are questioning whether the retail video game seller can survive competition from larger retailers such as Walmart and Amazon.com, and whether it can sustain its business model.
8. Jeffrey Yabuki
> Company: Fiserv
> CEO rating: 39%
> Company rating: 2.5
> Years as CEO: 9
> No. of employees: 21,000
Employees of Fiserv Inc. (NASDAQ: FISV), which sells information technology and e-commerce products, were resentful of layoffs due to frequent M&A activity. The company has acquired more than 140 acquisitions since it was founded in 1984, with the most recent being the 2013 acquisition of Open Solutions. The biggest criticism of the company under Yabuki’s direction is how frugal it is with compensation, according to comments on Glassdoor. Employees also felt that the company’s upper management does not listen to employees’ ideas on how to improve the company. Some former employees who commented on Glassdoor said that Yabuki is disrespectful to the company’s workers, claiming he once said, “If you don’t like the way we do business, there’s the door.”

7. Bill Nuti
> Company: NCR
> CEO rating: 39%
> Company rating: 2.5
> Years as CEO: 9
> No. of employees: 29,300
NCR Corp. (NYSE: NCR), based in Duluth, Ga., produces ATM machine technology, bar code scanners and other devices used in the sales process. While the company’s revenues grew to $6.2 billion in 2013 from $6.0 billion in 2012, employees showed a strong dislike of their CEO, Bill Nuti. One of the most common complaints among current and former employees on Glassdoor is that under Nuti, people can be called to work on a moment’s notice at any time during the week. They also criticized upper management for maintaining a structure in which decisions are based on cronyism, rather than what’s good for the company. One current employee, while commenting on Glassdoor, wrote to upper management, “We carry your water every day, and you disrespect us every day, we’re just your minions. You put out surveys, obviously you pay no attention to them or things would begin changing.”
6. Mike Jeffries
> Company: Abercrombie & Fitch
> CEO rating: 31%
> Company rating: 2.8
> Years as CEO: 22
> No. of employees: 9,000
Employees of casual clothing retailer Abercrombie & Fitch Inc. (NYSE: ANF) not only earn low salaries, but also suffer from low company morale, exacerbated by several controversial statements made by CEO Mike Jeffries. The board recently stripped Jeffries of his chairman role, following a campaign by hedge fund Engaged Capital that cited the company’s financial performance. Jeffries has also been criticized for his racy comments, including statements about selling thongs to pre-teenage girls and the stores’ target market — “cool” not “fat.” One store manager on Glassdoor advised upper management to “Get over yourselves. Get rid of Mike, revamp the board, bring on all new upper management from execs, directors, and RM’s. Learn to pay employees a salary to actually live on.” Likely making employees resentful, even as same-store sales declined the past eight consecutive quarters, Jeffries earned more than $79 million from 2010 to 2012. Jeffries signed a one-year employment contract in December, despite the fact that several large shareholders wanted him ousted.

5. Ursula M. Burns
> Company: Xerox
> CEO rating: 30%
> Company rating: 2.74
> Years as CEO: 5
> No. of employees: 140,000
Ursula Burns made headlines in 2009 when she became the first African-American woman CEO of a Fortune 500 company. Burns has been exceptionally visible during her tenure, making frequent public appearances even as the company’s prospects have faltered. Burns pushed for the $6.4 billion acquisition of Affiliated Computer Services that closed in 2010, claiming it would help the business. Xerox Corp. (NYSE: XRX), though, has yet to see any substantial benefit from the deal. Late last year, the company called the police prior to announcing 168 layoffs at its Cary, N.C., facility, noting they “were expecting trouble.” It was the second round of a total of roughly 500 layoffs. This treatment of employees stands in contrast to how the board treats Burns, awarding her an average of $13 million a year between 2010 and 2012. One former employee, commenting on Glassdoor, said, “Most upper management have received salary increase over the last 6 years, but staff has not.”


Read more: Nine CEOs with the Worst Reputations - 24/7 Wall St. http://247wallst.com/special-report/2014/04/04/nine-ceos-with-the-worst-reputations/#ixzz2z3Hl0Xnf
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A good manager understands the contribution of his or heremployees. In return, managers often receive the respect of their workers. And indeed, more than two-thirds of American employees approve — even like — their companies’ chief executive officers.
Some CEOs, however, are not popular with employees. At nine major companies, 40% or fewer employees gave their CEOs a positive review. Sears Holdings’ CEO, Edward Lampert, received positive reviews from just 20% of Sears employees and from just 26% of Kmart employees, the lowest rated CEO. Based on 24/7 Wall St.’s independent review of employee ratings provided by Glassdoor, these nine CEOs have the worst reputations.
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According to Glassdoor spokesperson Scott Dobroski, “While this list was compiled by independent research by 24/7 Wall St., it’s clear that some CEOs may want to take note that their own employees feel they can improve when it comes to leadership.” 24/7 Wall St. identified a number of factors that can hurt a CEO’s reputation within his or her own company. These include a CEO’s propensity for humiliating the company in public, poor stewardship of the company and a compensation package that employees perceive to be excessive.

A number of CEOs have failed to represent their companies adequately in public. On some occasions, a CEO’s public conduct was nothing more than a nuisance, while in other instances it became a liability for the company. Abercrombie & Fitch CEO Michael Jeffries is an infamous example of the latter. His comments about the retailer’s target audience — “cool, good-looking people” with “washboard stomachs” — have created negative feelings. Both the press and general public heaped scorn on Jeffries for his blatant lack of sensitivity and the company’s customer discrimination.


Many of the CEOs with poor reputations also ran their companies poorly. Xerox CEO Ursula Burns has repeatedly claimed the company’s 2010 buyout of Affiliated Computer Services would rekindle Xerox’s years of flagging fortunes. Instead, Xerox’s services business has faltered and revenue flattened. The acquisition’s once-prized assets have barely turned out to be valuable at all. Less than one-third of Xerox employees gave Burns a positive review.
One measure of stewardship is the evaluations employees gave their companies. Companies run by the CEOs on this list received scores of less than 3 out of 5 as an overall company rating, indicating workers were unhappy with their jobs and the companies. Employees of Sears Holdings’ Kmart stores gave their company just a 2.0 overall rating.
Dobroski noted that the relationship between overall rating and CEO approval was not a surprise to him. “The same is conversely true for the top [rated CEOs]. CEOs with high approval ratings tend to lead companies with higher than average satisfaction ratings as well.” According to Dobroski, this is because “leadership and the tone for the company going forward is generally set at the top and then trickles down to the rest of the company.”
Layoffs can also breed animosity toward management among employees. Since the beginning of 2013, GameStop has closed 500 stores. It is unlikely that company CEO J. Paul Raines is popular with current and former employees for that decision.
Other cuts can have a similarly negative effect on employee morale. Last year, Forever 21, run by CEO and founder Do Won Chang, cutemployee benefits and moved a number of workers from full-time to part-time status. The company denied this was intended to limit some employees from working more than 30 hours per week — which would have required the retailer to provide workers with health coverage as part of the Affordable Care Act.
Continued store cuts at Sears Holdings, which are central to the company’s plans to streamline operations, may also create negative feelings toward management among workers.
Extravagant pay can also lead employees to resent their CEOs. The three members of the Dillard family who run Dillard’s not only serve as management, but they also control the company’s board. The three brothers were paid a total of more than $58 million between 2011 and 2013. With a share price that has risen dramatically in recent years, from just a few dollars to nearly $100, investors may feel this money has been earned. It is unlikely that employees were as enthusiastic.


The chief executives with the worst reputations may want to look at their more popular counterparts at other companies to determine how they can improve and win over their employees. According to Dobroski, well-liked executives focus on “clearly communicating their vision, including being transparent about where the company is going, how they’re going to get there, and how each employees plays a vital role in this.”
However, for many executives there is little incentive to improve those perceptions without direct intervention from the stockholders. Despite the company’s weak financial performance, and his own rash statements, Abercrombie & Fitch’s Jeffries only stepped down as chairman of the board after hedge fund Engaged Capital launched a campaign to split the roles of CEO and chairman. Sears Holdings’ Lampert not only serves in both these roles, but he also engineered the 2005 merger of Sears, Roebuck & Co. and Kmart, widely considered to be a failure. Additionally, ESL Investments, Lampert’sinvestment fund, owned 48.5% of all shares outstanding as of March 19.
In order to identify the CEOs with the worst reputations, 24/7 Wall St. examined employee reviews at Glassdoor. To be considered, companies had to have a minimum of 500 reviews. Of the more than 225 companies with more than 500 comments, 24/7 Wall St. identified the nine CEOs with the lowest favorable reviews — 40% or lower. Positive reviews of Eddie Lampert, CEO of Sears Holdings and subsidiary Kmart, were both below 40%. Reviews of Michael Jeffries, CEO of Abercrombie & Fitch and subsidiary Hollister, were also both below 40%. Data on average wages by position were also from Glassdoor. Additionally, we reviewed financial statements from these companies, where available, filed with the Securities and ExchangeCommission. Employee counts are from companies’ own financial statements, as well as Yahoo! Finance. Estimates of employee counts of Forever 21, a privately held company, were taken from Forbes.

4. Ursula M. Burns
> Company: Xerox
> CEO rating: 30%
> Company rating: 2.74
> Years as CEO: 5
> No. of employees: 140,000
Ursula Burns made headlines in 2009 when she became the first African-American woman CEO of a Fortune 500 company. Burns has been exceptionally visible during her tenure, making frequent public appearances even as the company’s prospects have faltered. Burns pushed for the $6.4 billion acquisition of Affiliated Computer Services that closed in 2010, claiming it would help the business. Xerox Corp. (NYSE: XRX), though, has yet to see any substantial benefit from the deal. Late last year, the company called the police prior to announcing 168 layoffs at its Cary, N.C., facility, noting they “were expecting trouble.” It was the second round of a total of roughly 500 layoffs. This treatment of employees stands in contrast to how the board treats Burns, awarding her an average of $13 million a year between 2010 and 2012. One former employee, commenting onGlassdoor, said, “Most upper management have received salary increase over the last 6 years, but staff has not.”


3. Do Won Chang
> Company: Forever 21
> CEO rating: 26%
> Company rating: 2.4
> Years as CEO: 30
> No. of employees: 30,000
Under founder and CEO Do Won Chang’s leadership, Forever 21 employees commented on Glassdoor that they receive minimum wage, often have to work late into the night and get very little time off. Chang has often received attention for his actions over the years. In August, a company memo sent to employees stated that salaries and benefits would be cut, which many suspected was done in order to avoid paying health benefits as mandated by the Affordable Care Act. He also decided to have a reference to a Bible passage, John 3:16, sewn to the bottom of the retailer’s carrying bags, which may not sit well with some of his employees and customers. Former employees on Glassdoor claim that they have been threatened with termination if they called in sick.
2. Bill Dillard II
> Company: Dillard’s
> CEO rating: 24%
> Company rating: 2.4
> Years as CEO: 16
> No. of employees: 38,900
Like many of the companies run by unpopular CEOs, Dillard’s Inc. (NYSE: DDS) retail employees are paid poorly. According Glassdoor, a sales associate can expect to make $10.72 per hour. In contrast, the three family members of the clothing retailer who control the company, William Dillard II, the CEO, the company’s president, Alex Dillard, and its executive vice president, Mike Dillard, have paid themselves a total of $54 million over three years between 2010 and 2012. Bill Dillard II also did not win over employees when the company settled a class action disability discrimination lawsuit brought by former employees for $2 million in 2012. The company allegedly forced employees to reveal confidential medical information in order to be allowed sick days. Employees are under pressure to meet a sales quota that many of them have labeled as unrealistic. One current sales associate stated on Glassdoor, “Sales quotas are not entirely reasonable. Hard work doesn’t always pay off, especially if no one is in the store.”

1. Edward S. Lampert
> Company: Sears Holdings (Sears/Kmart)
> CEO rating: 20%
> Company rating: 2.5
> Years as CEO: 1
> No. of employees: 226,000
Lampert created Sears Holdings Corp. after coordinating the merger of retail giants Kmart and Sears, Roebuck & Co. nearly a decade ago. Since then, Lampert has served as chairman of the holding company, and recently took up the role of CEO as well. Lampert controls nearly half of all shares through his fund ESL Investments. Sears has continued to flounder under Lampert, who has repeatedly spun off its various assets and stores into independent entities, including Land’s End and Sears Automotive. Same-store sales, revenue and earnings have all continued to disappoint. A Businessweek profile of the company last year criticized Lampert for pitting divisions against one another. This, according to the article, has discouraged divisions from collaborating. According to one reviewer on Glassdoor, “communication from top levels is weak,” a common complaint for the CEOs with the worst reputations.