Through Shareholders' Eyes

Upper-level executives can be too wrapped up in their own world, writes a reader. More letters to the editor: the NRA on guns at the workplace; divided loyalties of real-estate reps.


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Your February cover story, "The Best Defense," shows what is available to top executives for defense efforts. It also mentions issues that "at the time" seemed legit but later appeared differently. It fails to mention, however, that in many cases, part of the equation that would give the average shareholder the total picture (oral agreements, contingency options, and so on) was not disclosed to the general public.

One case mentioned is the Merrill Lynch-Enron "barge" trial. Was the buyback option disclosed at the time of the initial sale? From what I have read, it was not, and this is a major portion of the "equation."

Too many times upper-level executives get so wrapped up in their own world that they are unable to understand or relate to the world of the average stockholder or person. When an executive says he is broke, but he owns several multi-million-dollar assets, he is definitely out of touch with the reality of people with less than six-figure incomes. If these executives could see corporate activities through the eyes of the average person, I don't think there would be the backlash we see today against top management. If companies got rid of the backroom deals and put everything on the table for all to see, I suspect most of the problems would go away and there would be trust in upper management again.

Gordon Knudson


Gordon S. Knudson CPA

Hudson, Wisconsin

Regulating Hedge Funds

It is right that the Securities and Exchange Commission should start regulating hedge funds. They are growing more common day by day, and a greater number of ordinary investors are putting their money into them. Forcing these funds to comply with regulations and become more transparent should help prevent fraudulent use of investors' money.

Ashim Bhanja Chowdhury

Via E-mail

Out of Touch

I don't know who Jessica Byrnes is, but perhaps I should ("Sharing Responsibility," Letters, February). Her comment that you chose to print boldly in red — "There is not a single person working in a U.S. public company...who should not be able to read and understand a financial statement" — demonstrates that she's out of touch with reality. I would bet that more than half of the people in management of our U.S public companies cannot read or understand a financial statement, not to mention the people who actually do the work.

Dave Kosek

Humphreys and Kosek

Accounting and Tax Services Inc.

Hightstown, New Jersey

A Safer Workplace?

Your magazine claims there's "strong evidence that guns and offices do not mix" ("Park-n-Load," Topline, January).

Of course, "offices" aren't the issue, since the legislation moving forward across the country protects only honest employees who keep firearms in their parked vehicles, in compliance with state law.

The "evidence" also isn't strong. The authors of the North Carolina study that claimed an association between gun policies and workplace homicides admitted they "did not control for [workplace experience with robbery and violent crime]."

Had they done so, they would have seen that 75 to 82 percent of workplace homicides occur in connection with a robbery, according to the U.S. Department of Labor and the Bureau of Justice Statistics. Employee policies are unlikely to have much effect on armed robbers. In fact, a full 84 percent of workplace homicides are committed by strangers, compared with just 12.5 percent of all homicides nationally.

Indeed, the American workplace is getting safer. As of 2005, workplace homicides had declined 49 percent from their all-time high in 1994. Workplace homicides declined faster than homicide in general during that period, and accounted for less than
4 percent of all homicides in 2003.

Finally, the highest-risk occupations for workplace homicide are those in small business, such as taxi drivers and convenience-store clerks — businesses where the CFO, as likely as not, is the person who makes change and works alone through a long shift. Neither corporate policies nor restrictive laws should deprive those people of the ability to defend themselves against crime.

Chris W. Cox

Executive Director

National Rifle Association of America

Fairfax, Virginia

Definite Conflicts

I read "Divided Loyalties" (December 2005) with interest. I am a broker with Newmark Knight Frank in New York City. Before joining Newmark, I was vice president of corporate real estate for Chase Manhattan, a director of corporate real estate for PaineWebber (now UBS), and I am an attorney.

Any person with a basic knowledge of commercial real estate practices in the United States would find a claim that a "tenant rep" firm has no conflicts because it doesn't represent landlords very amusing. Brokers in commercial real estate, including the so-called tenant-rep firms, get paid by the landlord, not their customer. That inevitably creates an inherent conflict, yet rarely do tenants want to pay their broker a fee. Everyone is very aware of, and most accept, this unusual custom and practice.

Further, in New York City and elsewhere, when a commercial real estate firm represents both an owner and a tenant, the broker at the firm representing the tenant earns almost 50 percent less than if that broker had made a deal at a building not represented by his own firm. That might seem to discourage brokers from making deals at buildings represented by their own company. I grant you the situation may be different where the same broker represents both parties, which may increase the possibility of such a broker favoring the landlord.

When a commercial real estate firm is paid by the landlord on a deal, what matters is the ethical reputation of the firm and the individual broker with whom a tenant is dealing. For a tenant-rep firm to say it has no conflicts because it doesn't represent landlords is a self-serving selling tool that merely clouds the reality of a business with inherent, but widely known and accepted, conflicts.

John Lizzul

Newmark Knight Frank

New York


In our October In Tech section, we ran a story ("Surprise Inside") on possible tax deductions for embedded software in business machinery. In it, we noted that 21 states currently offer such an exemption. We have since learned that fewer states actually offer the exemption for firmware. Likewise, the chart accompanying the story should have read "local property-tax collections of states that grant tax exemptions for various types of software," rather than "states that grant exemptions for embedded software." We regret the error.


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