Monday, July 13, 2009

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Guardian Business as muse? By STAFF WRITER ~ Guardian Business Desk: It's serendipity, of course. But the same week Guardian Business wrote an article about the potential cost savings associated with downsizing of executive teams, Benchmark (Bahamas) makes just such a move. "The board of directors... wishes to announce that effective 30 June 2009, Mr. Reno Jean Brown will resign as Chief Executive Officer of Benchmark (Bahamas) Ltd.," reads a release sent Guardian Business last weekend. "However, he will remain on the Board as a Director. The board also wishes to announce that Julian Renaud Brown will assume the post of Chief Executive Officer and also remain as president of the company." The move come on the heels of an article in this very newspaper detailing an almost identical round of musical chairs at RND Holdings. Minimizing executive pay expense through consolidation of duties — instead of the more-often-reached-for cut to front-line staff — is responsible for a "significant" chunk of the net profits reported as part of the public company's last quarterly statement. Effected way back in 2007, that corporate downsizing, specifically, the top executive's move over to the chairman's seat and the transfer of his duties to Kenneth Donathan — then the chief operations officer and now the company's CEO as well — allowed RND to eliminate a senior executive salary expense. That was without incurring any additional salary increases despite Donathan's extra duties at the holding company, with both a commercial rental property division and an electronic ticketing reservations unit. The creative thinking is responsible for a "substantial" percentage of the $82k RND was able to lop off of its administrative costs for the nine months ended November 30, 2008, compared to the same 2007 period. Those results were released just this month in a statement highlighting a net income jump of $213k, again comparing year to year results. The gain is really a story about cost containment, given revenue actually slid by about $15,000. It's the kind of move U.S. companies are also initiating. The gargantuan size of executive pay in the U.S. means savings through the consolidation of executive teams has been even more rewarding, that according to an April issue of leading industry periodical BusinessWeek. It says an increasing number of companies are taking a serious look at their CEOs and the number of hours they log in a week. The examination suggests to some that those top execs are essentially operating more as consultants and final arbiters than taking on responsibility for the day to day stewardship of a company. It is unclear how exactly the shakeup closer to home and at Benchmark will effect its bottom line. Tuesday, June 30, 2009