On the controversy---Su (fast)
>> vivendi has reached a final agreement to sell most of its u.s. entertainment assets to general electric’s nbc unit. g.e. will issue about $3.8 billion in stock in exchange for 80% of the combined k g.e. will also assume $1.7 billion worth of debt. vivendi will get the other 20% of the new company and $3.3 billion in cash through a deal allowing it to borrow against g.e.’s commitment to issue shares. vivendi’s u.s. businesses include universal studios and theme parks, as well as the u.s.a. and sci-fi cable tv networks. it will double nbc’s sales to $13 billion. the new company will be called nbc universal. checking the stocks at the close g.e. shares down 5 clents, vivendi universal down four cents.
>> wall street today is now waiting for the new york stock exchange to disclose how much its top five executives are paid. interim chairman john reed met tuesday with exchange members and said they won’t be pleased with what they hear. bloomberg su keenan has more on the controversy.
>> a lot of anticipation here. among the numbers he said that will be released this week, the pay packages of the two top lieutenants of ousted exchange chairman richard grasso. new york stock exchange presidents robert brits and catherine kinney. reed has said their compensation packages followed the same kind of pattern as grasso’s, with bonus, deferred payments and retirement benefits. both received incentive bonuses of $2.3 million in february of last year. and while full details on salary will be revealed for the first time, grasso did recommend earlier this year that they each receive close to $2 million in bonus, and close to $1 million in deferred pay. it was the outrage over the size of former chairman grasso’s initial pay package, of close to $190 million that led to his resignation last month. now, reed who took the chairman’s position on a temporary basis met with 250 exchange members yesterday and told them that they wouldn’t be “happy” with the figures. that’s according to three board members who were at that meeting. separately the head of one of the nation’s largest pension funds, call sters, sent letter urging reed to release the numbers now saying, “delaying such information only feeds further skepticism that the compensation philosophy of the board that led to mr. grasso’s situation, also runs deeper within the organization.” reed has said he will also make public the combined pay of the new york stock exchange’s 21 top executives. some members have requested that he go even further and do the same for all 61 officers listed on the 2002 annual report. lane, of course, we’ll bring those numbers to you as they are released by the exchange.
>> su keenan. fred alger management is being investigated by securities regulators as part of a widening probe into after-hours trading of mutual funds. new york state attorney general eliot spitzer and the securities and exchange commission, are now focusing “on the money” manager and several of the firm’s executives. last week fred alger suspended three employees in its mutual fund operation. a spokesman for fred alger says the firm has not been informed it is a focus of the investigation. the s.e.c. declined to comment. alger, by the way, manages about $10 billion in assets. the securities and exchange commission wants to make it easier for shareholders to nominate a company’s board members.
>> the staff has developed a package, a rule proposal that attempts to strike an important balance between shareholders who seek a more active voice and the proxy process, and those who have legitimate concerns about the impact of these proposals on the oversight, management and operation of public companies.
>> under the current rules, those that are unhappy with the board of directors must send their own ballots to shareholders which may be costly and yield unsuccessful results. the new rules include giving investor groups that hold at least 5% of the company’s stock , a chance to put their own board candidates on the ballot, permitting shareholders who have shown a lack of confidence for the existing board in one year, to name their own nominee the following year. and allowing as many as three investor nominees on a board with 20 or more directors. some economists say the new measure would result in better corporate management. but some commissioners and investor advocates are concerned about the timing and details of the agency’s proposal.
>> that the best course of action now might be just to be patient and wait to see how recent government―governance reforms enacted by congress, s.e.c. and s.r.o.’s may play out.
>> the s.e.c. will vote on a final version of the rule after 60 days of public komentd. crude oil futures fell on a larger-than-expected gain in u.s. supplies today. they dropped 60 cents to $29.81 a barrel. gold futures declined $1.80 to $376 an ounce on speculation the dollar will end its slide against the euro and the yen. the number of mortgage applications around the country surged for a second week in a row. the mortgage bankers association of america says its index jumped more than 15.5% from last week to 817. applications for mortgage refinancing also rose. the index which measures that climbed nearly 20%. the drop in interest rates sparked more home purchases and refinancing. mortgage rates reached a 13-month high in august but have declined since then. coming up, president bush is blaming china’s currency policy for the loss of american jobs.
