DealBook: Putting a Value on a C.E.O.

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Edited by Andrew Ross Sorkin

TODAY'S TOP HEADLINES | Tuesday, December 2, 2008 M & A: Big Three May Need to Trim Brands BANKING: Deutsche Rejects a Rescue PRIVATE EQUITY: Hawaiian Telcom Files for Bankruptcy HEDGE FUNDS: Paul Tudor Jones's Rules of Investing OFFERINGS: Cheer Fades as Stocks Plunge 9% VENTURE CAPITAL: Small Players Vie for 'Green Car' Loans LEGAL: U.S. Is Said to Expand Tax Inquiry TOP STORY Putting a Value on a C.E.O. With taxpayers' money now sunk into banks like Citigroup, can Main Street stomach the high salaries that some argue it takes to keep Wall Street's leaders in place? One thing the financial crisis has demonstrated is that Wall Street's old pay systems failed, Andrew Ross Sorkin writes in his latest DealBook column. But its failure raises questions with no easy answers. The trick, Mr. Sorkin writes, is to dole out enough rewards to keep executives working hard, but not to dole out too much. Mr. Sorkin tables his own suggestion: have executives invest in their own firms on the same terms as taxpayers. Go to Article from The New York Times» Read More Add a comment ADVERTISEMENT Back to Top MERGERS & ACQUISITIONS For the Big Three automakers to win over Washington lawmakers in their bid for federal aid, they may have to show they are serious about shrinking their vast lineups of different brands. Ford Motor Company said Monday it would re-evaulate options for Volvo, including a possible sale. Go to Article from The New York Times» Go to Item from DealBook» Go to Ford News Release» Read More Add a comment British Airways said Tuesday that it is discussing a potential merger with Qantas Airways of Australia through a dual-listed structure. Separately, the Associated Press reported that the Australian government plans to increase the level of foreign ownership allowed in Qantas, but will not permit a takeover. Go to News Release from British Airways» Go to Article from The Associated Press» Go to Proposal from the Australian Department of Infrastructure and Transport (PDF)» Read More Add a comment At least three groups submitted offers on Monday to the Tribune Company in the latest round of bidding for the Chicago Cubs baseball team, Reuters reported, citing two sources familiar with the process. Go to Article from Reuters via The New York Times» Read More Add a comment Withdrawn mergers and acquisitions total $322 billion so far in the fourth quarter, and could end up surpassing the value of completed deals thus far, according to Thomson Reuters. Go to Item from DealBook» Read More Add a comment Dow Chemical set the financial terms of its joint venture with Kuwait Petroleum, boosting investors' confidence about Dow's pending acquisition of Rohm and Haas. Go to Item from DealBook» Go to Statement from Dow Chemical Read More Add a comment Exelon's offer for NRG is a textbook example of a hostile bid, and The Deal Professor looks at how this battle is likely to be fought. Go to Item from The Deal Professor» Read More Add a comment Johnson & Johnson said it would buy Mentor Corporation, a maker of breast implants, for $1.07 billion in cash. Go to Item from DealBook» Go to News Release from Johnson & Johnson» Read More Add a comment Yahoo should put its money where its mouth is and offer to buy Microsoft's MSN unit with a public bear hug, Breakingviews says. Go to Article from Breakingviews via The New York Times» Read More Add a comment Aabar Investments, a firm with ties to Abu Dhabi's ruling family, has agreed to buy American International Group's private Swiss banking unit for $253 million. Go to Item from DealBook» Go to Statement from Aabar» Read More Add a comment Back to Top INVESTMENT BANKING Deutsche Bank fancies itself a shining exception to the prevailing view that giant banks need rescuing by governments. But so far, the markets are not buying the story. Go to Article from The New York Times» Read More Add a comment Goldman Sachs is likely to report a net loss of as much as $2 billion for the fourth quarter, The Wall Street Journal reported, citing industry insiders. Go to Article from The Wall Street Journal (Subscription Required)» Go to Article from Reuters via The New York Times» Read More Add a comment JPMorgan Chase unveiled plans Monday to cut a total of 9,200 jobs at Washington Mutual, which it acquired in September after the Seattle savings and loan became the nation's largest bank to fail amid the ongoing financial crisis. Go to Item from DealBook» Read More Add a comment Back to Top PRIVATE EQUITY Hawaiian Telcom Communications, the largest telephone company in Hawaii and a holding of the Carlyle Group, said Monday that it had filed for Chapter 11 bankruptcy protection. Go to Article from The Associated Press via The New York Times» Go to Article from The Washington Post» Go to Press Release from Hawaiian Telcom (PDF)» Read More Add a comment Kohlberg Kravis Roberts plans to invest $100 million in a Chinese dairy-farm business, Bloomberg News reported. Go to Article from Bloomberg News» Go to Related Article from The New York Times» Read More Add a comment Back to Top HEDGE FUNDS Even as Paul Tudor Jones blocked investors from redeeming money from his main hedge fund for a quarter, he said he will "never quit on an investor who is willing to stay with Tudor unless we are at or above high watermark." Go to Item from DealBook» Read More Add a comment A hedge fund has sued Countrywide Financial over loan modifications. Go to Article from The New York Times» Read More Add a comment The European Union will this week take the first step toward new rules governing high-risk hedge funds, the E.U.'s financial services chief said Monday. Go to Article from The Associated Press via The New York Times» Go to Transcript of Mr. McCreevy's Speech» Read More Add a comment Back to Top I.P.O. / OFFERING In six and a half hours on Monday, the Standard & Poor's 500-stock index declined nearly 9 percent -- the type of collapse that, historically, has taken years to occur. Go to Article from The New York Times» Read More Add a comment Stocks fell Tuesday in Europe and Asia amid deeply bearish sentiment stoked by expectations of a protracted global recession. Go to Article from The New York Times» Read More Add a comment Daimler, the German automaker, sold 1 billion euros ($1.27 billion) of three-year bonds on Monday, paying sharply higher interest than it did for a similar issuance three months ago. Go to Article from Reuters» Read More Add a comment Back to Top VENTURE CAPITAL A $25 billion auto industry loan program intended to quicken the development of fuel-efficient cars has set off something of a gold rush among Silicon Valley firms and old-line Detroit auto suppliers. Go to Article from The New York Times» Read More Add a comment ExtendMedia has raised $10 million in Series C funding from previous backers TVM Capital, Atlas Venture and Venrock Associates. Go to Article from GigaOm via The New York Times» Read More Add a comment Panasonic and Samsung said Monday that they have invested an undisclosed amount into SiBEAM, the maker of high-speed networking chips. Go to Article from VentureBeat via The New York Times» Go to Press Release via BusinessWire» Read More Add a comment Back to Top LEGAL The Justice Department has expanded its criminal investigation into foreign banks that sell offshore private banking services to include Credit Suisse and HSBC, The New York Times reported. Go to Article from The New York Times» Read More Add a comment The head of a new Congressional panel set up to monitor the gigantic federal bailout says the government still does not seem to have a coherent strategy for easing the financial crisis, despite the billions it has already spent in that effort. Go to Article from The New York Times» Read More Add a comment The United States economy officially sank into a recession last December, which means that the downturn is already longer than the average for all recessions since World War II, according to the committee of economists responsible for dating the nation's business cycles. Go to Article from The New York Times» Read More Add a comment Maurice R. Greenberg, the former chief executive of the American International Group, again took to the op-ed pages of The Wall Street Journal, writing on Tuesday that the insurance giant needs yet another revision to its bailout by the federal government. Go to Op-Ed from The Wall Street Journal» Read More Add a comment The Bank of Japan on Tuesday as it announced emergency measures to ease an acute squeeze in corporate funding that threatens to push Asia's largest economy deeper into recession. Go to Article from The New York Times» Read More Add a comment Pilgrim's Pride, one of the nation's largest poultry producers, filed for bankruptcy protection on Monday, as the company seeks more time to negotiate with its creditors. Go to Article from The New York Times» Read More Add a comment About 93 percent of law firm leaders surveyed by American Lawyer said they do not expect their firms to reduce head count in 2009. Go to Article from American Lawyer» Read More Add a comment Federal prosecutors are passing on their last chance to reinvigorate a criminal tax-shelter proceeding against KPMG, once billed as the largest in history, after a string of setbacks in the case. Go to Article from The New York Times» Read More Add a comment Get home delivery of The New York Times for as low as $3.15 a week.

SEARCH DEALBOOK SITE DealBook | E-mail Preferences Help | Advertising Opportunities M&A about to take deep dive December 2, 2008 Equity markets thwacked from all sides December 2, 2008 Dow takes big hit to seal Kuwaiti deal December 1, 2008 Bracing for Bonus News London's financial workers expect their bonuses to drop as much as 70 percent from last year, according to a survey. More» Video: Fixing the Big Three Andrew Ross Sorkin talked about taking a tough-love approach to bailing out G.M., Ford and Chrysler in an appearance on the Charlie Rose show. More» Tracking the Bailout The New York Times tracks how the $700 billion Troubled Asset Relief Program is being doled out to banks, insurance companies and more. More» Toasts Amid the Turmoil As other hedge funds struggle, John Paulson's firm and its investors celebrated big gains at an opulent dinner. More» What G.M. Really Needs Instead of getting a bridge loan that will just disappear, General Motors should be revamped in a government-sponsored bankruptcy filing. More» Video: Griffin on Capitol Hill Kenneth Griffin of Citadel testifies before a House committee on the role of hedge funds in the financial markets. More» Revolving Door The latest hires, promotions and departures at Kirkland & Ellis, Fannie Mae, BlackRock and more. More» The Rescue Squad DealBook's special section looks at the people reshaping Wall Street and what the new landscape might look like. More» The Deal Professor A blog-within-a-blog that looks at mergers, private equity and corporate governance through a legal lens, written by Steven M. Davidoff, a professor at the University of Connecticut School of Law and a former lawyer at Shearman & Sterling. More» Lehman's Fall Full coverage of Lehman Brothers' dramatic slide into bankruptcy protection. More» The Bear Bailout Full coverage of the proposed takeover of the troubled investment bank -- and the crisis that led to the sale. More» DealBook for BlackBerry Get one-click access to DealBook to read the latest deal news throughout the day. Visit mobile.nytimes.com/bbinstall directly from your BlackBerry or by sending the text message "db install" to 698698. More information on DealBook for BlackBerry. News By Industry Airlines / Autos Basic Industries Consumer Goods Energy / Utilities Financial Services Food & Beverage Healthcare Media Real Estate Retail / Leisure Technology Telecom Tools & Resources GET QUOTES Look Up Symbol RESEARCH SUITE Portfolio Company Research U.S. Markets International Markets Mutual Funds SEND A TIP OR FEEDBACK E-mail us at dealbook@nytimes.com Dealboard

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