As noted in this previous post, University of Illinois law professor and prominent blawger Larry Ribstein has become NY Times business columnist Gretchen Morgenson‘s worst nightmare — a sharp mind on business issues exposing the vacuous nature of her columns.
The subject of Professor Ribstein’s latest analysis is Morgenson’s column ($) this past Sunday, in which she addresses the rather tame fight for three board seats at the Acxiom Corporation, an information management company in Little Rock, Ark., where Acxiom’s CEO, Charles D. Morgan and Acxiom’s largest shareholder, ValueAct Capital, have squared off over ValueAct’s allegations that Morgan has improperly billed Acxiom for his personal pursuits (such as sponsoring NASCAR teams and leasing a private jet from Morgan’s company), stacked its board with pals and rejected its value-enhancing management ideas. Ms. Morgenson is particularly troubled by Morgan’s company expense account, which is assuredly greater than Morgenson’s at the Times:

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Long-suffering United Airlines’ first quarter of operations after emergence from its three-year hike through chapter 11 was not particularly impressive. The Chicago-based carrier reported a loss of $306 million (excluding a one-time, emergence-from-chapter 11 accounting gain) that compared with a net loss of $302 million a year earlier (also excluding reorganization items). Revenue for the quarter rose 14% to $4.47 billion from $3.92 billion a year earlier.
Despite that desultory performance, United is already playing the professional sports franchise game of threatening to move its long-time Chicago-area headquarters to friendlier (and presumably better subsidized) environs, such as Denver. Although one is tempted to suggest that Chicago might be better off by saying “good riddance” to the troubled airline, late-night talk show host Conan O’Brien observed late last week that Chicago really doesn’t have much to worry about:

“United Airlines might be leaving the city of Chicago. The good news is that they will be leaving from O’Hare so they will not depart for another six years.”

During the Lay-Skilling trial, the questionable governmental policy of criminalizing corporate agency costs is on full display.

In this TCS Daily column, Clear Thinkers favorite Stephen Bainbridge lucidly explains corporate agency costs and why shareholders deserve protection from theft, but not from risk-taking.

Given the government’s overwhelming prosecutorial power and the real presumption in cases involving failed business decisions, the criminalization of corporate agency costs is a serious threat to justice and to creation of wealth and jobs. Professor Bainbridge is an expert at the top of his game on this key business law issue, so don’t miss his analysis.

WSJ ($) columnist and Clear Thinkers favorite Holman Jenkins (prior posts here) is on a roll today in his Business World column as he addresses the hypocrisy of Europe pursuing its anti-trust case against Microsoft while simultaneously indulging such transparent European-based anti-trust violators as Airbus. Money quotes:

“Antitrust is untrammeled bureaucratic whim masquerading as law and science, and sometimes the only effective check is a political check.”
“Antitrust always and everywhere ends up being a neurotic response to ephemeral issues of corporate power, yielding only when the spasms of a previous administration can be politely swept out of sight.”

Read the entire column. Good stuff.

Despite the success of Wal-Mart, operating a successful retail business in the U.S. during the best of times is difficult. In that regard, recent years have not been kind to retailers, particularly “big box” retailers — i.e., those companies that lease large, warehouse-type buildings that anchor a strip shopping center containing any number of smaller retail businesses.
As a result, many of those strip centers have lost their anchor tenants, which often prompted smaller businesses to vacate the premises because of reduced customer traffic. Moreover, inducing a new retail anchor tenant to come into a center that has already lost its previous anchor is usually a dicey proposition, so owners of such centers often are left with the vexing problem of attempting to turnaround a relatively new retail property in a market that is devoid of potential tenants. What to do?
Well, as this Thaddeus Herrick/Wall Street Journal ($) article reports, Houston is at the forefront of an innovation that is helping owners of such properties solve their problem — big chuches buying or leasing such centers to house part of the growing space needs of the churches:

Several years ago, when leaders at the 5,000-strong Tallowood Baptist Church in Houston realized they needed more space to expand their congregation, they considered building a new church on the outskirts of this sprawling Texas city. Instead, they opted for a less conventional site: a strip mall on the Katy Freeway.
Last year, Tallowood began services in a renovated 32,000-square-foot building that was formerly a Circuit City store. In addition to a 300-seat auditorium, the location now boasts 30 offices, a conference room that doubles as a day-care center and a Christian bookstore. “Not everyone comes to church for the architecture,” says Larry Heslip, Tallowood’s minister of education and administration. “Some people just like to be in a space that’s usable.” [. . .]

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George Melloan, the deputy editor, international, of The Wall Street Journal and the author of the WSJ’s weekly “Global View” column for the past 16 years, is retiring from the Journal at the end of this week. His final Global View column is here, which concludes as follows:

As readers may have suspected from the above, this is my last Global View column. After 54 years of joy at being part of a great news organization, I am retiring at the end of this week. I will keep myself busy writing a book about the 36 years I have spent writing and editing a portion of the copy you have read on the Journal editorial pages.
Part of the pleasure of this column has been the exchanges I’ve had with readers. Let me thank again those of you who have been generous with your time in sending me your thoughts and criticisms. A tiny few readers have expressed their disagreement in barnyard terms, but, having grown up on an Indiana farm, I long ago became familiar with that kind of discourse. I can quite understand hostile reactions to the preachments of a newspaper columnist, since I occasionally have tantrums myself when I disagree with a journo who sees the world in a different light. In America, neither side, thank goodness, can use the power of the state to suppress the other.
I will leave this column in the hands of a far younger and more talented writer. It has been fun, but all good things must end. Sayonara.

Melloan is a talented writer on business and politics, and I have liberally cited his columns in these previous posts. His common sense and — most of all — clear thinking will be sorely missed. Congratulations on a fine career and a job well done.

Houston-based Plains Exploration & Production Co. announced Monday that it has agreed to acquire Stone Energy Corp. of Lafayette, La. and assume the company’s debt in a stock deal with a current value of about $1.35 billion.
Under the agreement, Plains will swap 1.25 common shares for each Stone Energy common share as Plains expects to issue about 34.5 million shares and assume about $485 million in debt. When the acquisition closes, Plains shareholders will own 70% of the combined company with Stone Energy shareholders owning the balance. Stone Energy shares rose $1.76 to $48.86, while Plains stock declined $2.92 (7%) to $39.05 as of the end of yesterday afternoon’s New York Stock Exchange composite trading.
The primary purpose of the acquisition is to diversify Plains heavy concentration of reserves in California into Louisiana and the Gulf Coast. After the acquisition closes, Plains will have a proved reserve base of about 500 million barrels of oil equivalent (about 80% in oil) with operations in California, the Rocky Mountain region, Texas and the Gulf of Mexico.

In this era of increasing skepticism regarding executive compensation of public companies, I pass along this Seattle Times blurb on the compensation package of Amazon.com’s CEO, Jeff Bezos:

Amazon.com spent $1.1 million last year protecting Chief Executive Jeff Bezos, according to regulatory filings.
Since 2003, the online retailer has paid roughly $3.2 million on security for Bezos, including at business facilities and for business travel. The expense showed up for the first time on the company’s annual proxy, which was filed Thursday with the Securities and Exchange Commission.
Meanwhile, Bezos’ pay remained the same for the eighth year: $81,840.
As the company’s founder, Bezos owns 101.3 million shares, or 24.3 percent of the company, worth about $3.68 billion.

80 grand in annual compensation and over a million in security costs? Sounds as if Bezos should trade jobs with his bodyguard. ;^)

Flying somewhat beneath the radar screen of a Houston business community that is preoccupied by the corporate criminal case of the decade is a new proposed state tax on earnings of partners that exceeds $300,000 a year (are you listening, law firm partners?).
This Ft. Worth Star-Telegram editorial surveys the political landscape regarding the proposed tax, which has been proposed by the so-called Sharp Commission, the special tax reform commission that former state comptroller John Sharp chaired. The proposed tax is part of a legislative effort to meet a June, 2006 deadline to fix the stateís funding system for schools and — as you might expect — more than a few law firms are opposing it.
Among other things, the Star-Telegram editorial notes that opponents are contending that the tax is unconstitutional because the Texas Constitution contains a 1993 amendment that specifically prohibits any ìtax on the net incomes of natural persons, including a personís share of partnership and unincorporated association incomeî without approval by voters in a statewide referendum.

For years, NY Times business columnist Gretchen Morgenson was able to publish her columns about the morality plays of greedy and conniving American businesspersons without critical analysis, save for an occasional letter to the editor.
But the blogosphere has changed all that. Now, sharp analysis of columnists’ views is available almost immediately for all the world to review and absorb. In particular, Larry Ribstein is exposing the vacuous nature of Ms. Morgenson’s columns, the latest of which is this column on John Bogle’s proposal to require disclosure of fund manager compensation. Professor Ribstein comments on Ms. Morgenson’s relentless bashing of what she perceives as excessive executive compensation:

While we’re constructing conspiracy theories about the incentives of all kinds of business people we might ask about Morgenson’s incentives. As I’ve discussed, Morgenson has an incentive to entertain readers, not inform. So she constructs the most entertaining scenario ñ a conspiracy of silence about mutual fund manager pay. Then it’s off to the races, manipulating every argument so that it fits the plot.
Because I find Morgenson to be such a particularly shining example of distortion of business issues by prominent business writers, I’ve decided to institute fisking of her columns as a regular feature of this blog. So after you curl up with the Sunday New York Times, be sure to tune in here for the real story.