Showing posts with label David Baldwin. Show all posts
Showing posts with label David Baldwin. Show all posts

Sunday, September 6, 2009

Not so fast Davy Boy

Look at the result from Mighty River Power out this week, profit up by over 40% and retail customers up by over 30000 for the last year.

Contrast that with Contact Energy Ltd [CEN.NZ] FY 2009 profit release out in August. Profit down by more than 50% and retail customers lost, more than 40000.

Reason?

Well according to David Baldwin, CEO , it was "overconfidence" (see arrogance in the dictionary for possible explanation) that led to the spectacular drop in profit and associated loss of customers and reputation:

"There's a fair amount of reflection over what we've done in Contact and it has to be said hubris had been building up over several years."

The 45-year-old is urging his staff to re-adjust their thinking.

"If we assume that everything good that happens to us is all good luck then we won't carry that confidence [forward] and we'll start afresh." NZ Herald Sept 5 2009

Of course if you accept that arrogance is the reason for the slump in profit you would have to sheet the responsibility for that arrogant attitude down to the company leader/s, after all we know that company culture is fostered by its leadership right?

Well, apparently not. David was nice enough to share the responsibility for his muck up with his staff.

Weather plays an important part in company fortunes and boy oh boy meteorologically speaking David has had a bitch of a year with that.

Of course that is understandable, weather is crucial to running an electricity utility company and that is plain to the average Joe but I have rarely seen David blame the weather when it is in his company's favour, it seems to be down to his good management. Boy David has some great connections there - as opposed to the 40000 connection lost over the last 12 months.

Many of you reading this will be thinking, what is your problem Mr Rickard, any company can have a bad year?

Very true and there can be many reasons for a bad year, some of them out of leaderships hands but these reasons are universally known and should be accounted for when running a business.

The big problem that I have though with Origin Energy Ltd [ORG.ASX] appointed David Baldwin is that he and his board of directors were almost single-handedly responsible for Contact's bad year.

They raised electricity prices (probably validly) at a time when they doubled directors fees while in the same week having an expensive lunch at a posh restaurant on the shareholder tit. The shite then hit the fan and they waved bye bye to more than 40000 customers and what they had left of their reputation.

Very few individuals will put their hands up and criticise such a monumental stuff up and put the blame on where it lies, with David.

The piece that I quoted from in the NZ Herald was so soft soap I have to rub myself down (control your excitement) again with dettol just to feel clean again.

The fact that David and his board are still employed after their stuff up is hard enough to stomach but his PR exercise of apportioning blame to everyone else rather than solely on himself is a business slight of hand often used in New Zealand to bury ones mistakes as time passes and it should not be accepted by Contact Energy shareholders.

David, the board, his executives and the puppet masters at Origin Energy should be ashamed, but it is clear that they are not and that is the cutting part.


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Beam me up Davy
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Friday, July 24, 2009

Beam me up Davy

I think Contact Energy directors have been watching too much moon landing coverage over the last week because its seems that a number of them may have disappeared up their own planet of Uranus.

Clearly some live in a parallel universe when they can cost their company nearly 40000 customers in just under a year by making a public exhibition of himself by raising electricity prices, granting directors big bonuses and having an expensive boozy lunch on the company in October last year and then expected to be rewarded for it.

David Baldwin, managing director and CEO of Contact Energy Ltd [CEN.NZ] yesterday applied for a waiver from the NZSX to get "financial assistance", an interest free loan from Contact Energy shareholders, so he can participate in the company's Long Term Incentive plan (LTI).

Boy those Contact shareholders sure are generous!

Fair enough, you deserve the free shares for doing a good job, but Baldwin has cost the company 10s of millions in lost revenue over the last year and since he has become the MD this year he becomes ineligible to participate but has decided in his infinite wisdom that he will apply to his mates at the NZX to waive this rule that allows him to participate.

And guess what, the waiver was granted just 24 hrs latter.

Beam me up Scotty, I wanna be where Dave lives, 'cause it don't work that way down here on earth.


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