Well after years of headlines about out of this world CEO compensation there is a small effort to control the greed underway. A new Security and Exchange Commission (SEC)  rule will require disclosing the gap (usually massive- an average of twenty to one is estimated)[Correction:an average of 20 times in 1965 to almost 300 in 2013.BP ] between a company’s chief executive pay and the rank and file workers.  

Their thinking goes like this: Because the rule will generate an easily graspable and often decidedly shocking number, it may energize a cadre of new combatants in the executive pay fight. And because these newcomers — company employees, state governments and possibly even consumers — will most likely be more vocal on the matter than institutional investors have been, the executive pay bubble might actually start to deflate.

   Some are hopeful, but the effort may have its hands tied from the start.One independent compensation consultant points out that the SEC’s reporting method may understate the CEO/worker compensation gap.

That’s because the calculation, which relies on what is known as the summary compensation tables in the annual proxy statement, does not include the total amounts executives have built up in their pensions and supplemental retirement plans.

  And there is this detail;the rule doesn’t become effective until 2017 which means it won’t be until shareholder meetings held in 2018 that SEC pay ratio reports will be available.  I guess someone figured out there is no 'shame' in waiting-at least for the fatcat CEOs.

After years of declining quality in their services FairPoint has come up with a bold action plan they think will remedy their ongoing failure to meet a required standard of service. They want Vermont Public Service Board to do away with quality standards they are required to meet.

Brilliantly simple, no quality standards, then no problem.

“The very fact that we answer to the Public Service Department for service quality issues, or, in fact, there’s a proceeding at the Public Service Board; none of our competitors are subject to any of that regulation,” says Mike Reed, who is president of FairPoint in Maine and speaks for the company on regulatory issues.

Reed says regulation of FairPoint is rooted in the past, when phone companies were monopolies and consumers had no choices.    

While smaller Vermont phone companies also have to meet standards for billing, repairs and installations for telephone service, Reed says FairPoint’s competitors don’t. These are providers like Comcast, Verizon and Sovernet. By law, the state doesn’t have regulatory power over their voice services.

FairPoint came to Vermont, Maine and New Hampshire and acquired Verizon’s landline services well aware of the competition landline services faced with regard to new internet-based services. Early on they promised to maintain existing landline services and even to hire hundreds in the Burlington area. However almost immediately they cut back on jobs, and poor service has been an ongoing issue.    

Considering that history and the fact the state has made some one or two favorable regulatory accommodations for them I have to admit to no small bit of admiration at the level of moxie FairPoint had to muster for this new tactic.    

Yet FairPoint must believe in the magic of the competitive market place:

FairPoint’s Reed continues […] in today’s environment, it's competition – not regulation – that assures quality. “If customers are not satisfied with our service, they leave us.”

Leave them and go to … ah Comcast. Comcast – unburdened by public service quality rules – is the subject of 50,000 complaints to the FTC in 2014 and the only two-time winner of Consumer Reports’ Consumerist Worst Company in the world award (2010 and 2014). Now there’s a fine example of the level of quality the competitive marketplace assures.  

Should we assume Comcast set the bar low enough for FairPoint to be competitive?

In the US Senate three bills dealing with  nuclear power plants' "end of life " issues have been reintroduced. New England Senators Ed Markey and Bernie Sanders were joined by Barbara Boxer of California to move measures from last year that, if passed, would  accomplish significant plant closing safety and decommissioning funding changes.

Each of the Senators has active nuke plant closing issues in his/her home state – Entergy’s two New England nukes, Pilgrim and Vermont Yankee, and Southern California Edison’s San Onofre plant.

The Safe and Secure Decommissioning Act of 2015 would bar the US Nuclear Regulatory Commission "from issuing exemptions from its emergency response or security requirements for spent fuel stored at nuclear reactors that have permanently shut down until all of the spent nuclear fuel stored at the site has been moved into dry casks, which are a more secure and safe option for storage," the sponsors said.  

The Nuclear Plant Decommissioning Act of 2015 aims to "ensure that states and local communities have a meaningful role in the crafting and preparation of decommissioning plans for retired nuclear plants located in those areas," and "require NRC to publicly and transparently approve or reject every proposed decommissioning plan" for such plants.

The Dry Cask Storage Act of 2015 would require all power reactor operators to develop "an NRC-approved plan that would require the safe removal of spent fuel from the spent fuel pools and place that spent fuel into dry cask storage within seven years of the time the plan is submitted to the NRC. The legislation also provides funding to help reactor licensees implement the plans and expands the emergency planning zone for non-compliant reactor operators to 50 miles."  [added emphasis]

Spent fuel pools, dry cask storage and derelict plant safety issues along with decommissioning funding are hot button problems for all three plants. Sen. Markey is worried about the potential for an accident at Pilgrim’s “overstuffed spent fuel pool”. Sen. Boxer’s state has an ongoing legal battle over a secret closing cost agreement for the damaged San Onofre plant that tags utility rate payers with 70 percent of the $4.7 billion shutdown costs. All these worries and more are probably shared by Senator Sanders regarding the "beloved" old Vermont Yankee.  

There is no word on how fast or slow the US Senate will act on the now “reintroduced” bills. No surprise there. But Republican Senators might want to remember that their grandkids will continue to breathe the same air as the rest of us in every nuked state in the nation.

“I always think there's a band, kid.” Harold Hill The Music Man

Bill Stenger had a press event the other day for his Newport AnC/Bio project. In an effort to boost confidence (and continued foreign investment) in the fledgling EB-5 financed biotech project, he was accompanied by Dr. Ike Lee, CEO of AnC/Bio of Vermont. Dr. Lee sounded a hopeful note about the future success of his biotech firm and also explained that unlike the failed AnC/ Bio business in South Korea, he’ll get it right this time.

“We established a beautiful facility in Korea expecting that we would have the products to produce for the global market. That didn't happen.”

AnC/Bio South Korea failed to meet payments on their building and it was sold out from under them. This shouldn’t happen here as the Newport property is owned by GSI Dade Miami, a Stenger/Quiros company. Interestingly GSI Dade is currently listed as commercial cooking and restaurant equipment wholesaler by one online business service listing.

He [Dr. Lee] says federal Food and Drug Administration review of these new biotechnologies has been slow, but now the timing is perfect for a facility that provides production space, marketing and research for fledgling companies near the end of the approval process. “And now as we are getting many green lights from the government we are really excited to push it forward,” Lee said.

According to Stenger roughly three quarters of the debt free (in his view) EB-5 financing is now in hand for the Newport plant. However final FDA permitting for their products is still pending, and meanwhile, investment analysts speculate about a biotech industry bubble. Their concern is a speculative bubble driven, they say, by multibillion-dollar market valuations for biotech companies that don’t yet have a single product for sale.

But hope springs easily to Stenger and Quiros Vermont’s EB-5 supported entrepreneurs — there’s always a band.

Perhaps a little mud season break from politics will be welcome. Vermont may be called the King of Maple Syrup with an output of 3 million gallons of syrup produced in 2014. But according to the Washington Post more people prefer fake to the real thing.

Fake maple syrup resembles real maple syrup about as much as Velveeta resembles a good Camembert. But when I asked 1,000 Americans which they preferred on their pancakes, the artificial brands won out big time.

Just over 25 percent of respondents to an online Google Consumer Survey panel said that real maple syrup was their pancake topper of choice. Seventy percent chose either Aunt Jemima, Mrs. Butterworth's, Log Cabin or Hungry Jack, while another three percent chose something else.

They speculate the preference for fake probably has to do with high cost — hopefully not flavor. Mostly it is that a gallon of fake syrup goes for about eight dollars (at WalMart), a far cry from the forty to sixty dollars a gallon the labor-intensive genuine maple syrup costs.

So it is mostly about price and availability, although marketing, accessibility, and culture may be additional factors. So there you have it: Not everything boils down to politics.

First off it is a curious thing to me how Bruce Lisman, former top executive at Bear Stearns investment bank has been so readily accepted as Vermont’s premiere fiscal scold.

At the time it crashed in flames, Bear Stearns had a leverage ratio of 33 to 1 (for every dollar in equity, it had $33 of debt). Should he really be lecturing anyone on fiscal restraint?

Be that as it may, Bruce Lisman took four years, one million of his many millions of dollars and built his very own non-partisan “political outfit,” the Campaign for Vermont. Add to this exploit one recent key component: Governor Shumlin has managed to shoot himself in the foot just about every other day for several months and has transformed into a seemingly vulnerable opponent. And … Viola! Bruce has “found” his political voice according to VPR

It’s been almost four years since former Wall Street executive Bruce Lisman founded his public policy outfit, Campaign for Vermont. But only recently has he begun using his public platform to castigate the Shumlin administration directly. And his pointed criticism suggests Lisman might be setting the stage for what could be a wide-open race for governor in 2016.

Others have traveled here before. Rich Tarrant and Jack McMullen were both rich Republican types who, like Lisman, after successful lives in business decided Vermont politics might be a nice ‘closer’ for their careers  — a plutocrat’s nightcap.

Tarrant waged an attack-ad driven campaign against Bernie Sanders to be Vermont’s US Senator, spent $ 7 million, and lost. And of course businessman McMullen moved to Vermont and year later wanted to be a senator but never made it far — losing the Republican primary to farmer Fred Tuttle.

For now Lisman is still keeping his “market price low” regarding a run for governor

So is he gunning to be that guy [to run]? Since the founding of Campaign for Vermont in 2011, Lisman has deflected inquires about his ambition. He continues to do so today.  “I don't give it a lot of thought” Lisman says.”I guess i'm in the same place I've been. I don't give it a ton of thought….” [added emphasis]

It's as if he bought a prime piece of land, took out a building permit and then expects people to believe he hasn’t given building a house or a mega mall  “… a lot [or a ton] of thought”.

Ultimately if he runs for office he must sell a commodity — himself — to Vermonters. In that regard he appears to have charisma only equal to Tarrant and McMullen’s, i.e., none.

Lisman for governor would be just another bad Wall Streeter commodity swap — by Shumlin’s default.

No joke!

Well, this will warm the hearts of Vermont’s big ski resort owners and perhaps mollify budget-cutting legislators. A deal is now under consideration by the Shumlin administration to “sell” state land which is currently under long-term lease to ski resorts. This potential deal was uncovered by the investigative team at the Burlington Free Press.

The FreeP reports that the plan is the brainchild of former Douglas administration official Mike Smith (current interim dean for land sales and divestment at Burlington College). The plan, as outlined by Smith for Governor Shumlin, would, they say, raise hundreds of millions of dollars (one-time only) for Vermont.

Earlier, Smith had meetings with Vermont Ski Area Association’s Vin Bogataj to gain input and ensure their enthusiastic “buy-in.” At the time Smith pitched his approach, the Governor had just received the State Auditor’s report on antiquated ski-resort leases of state-owned land.

Currently 8,500 acres of public land are under a variety of long-term leases to ski resorts. Payment arrangements are based on a percentage of lift ticket sales. In recent years other sources of income beside ticket sales have been added to the resorts and remain untapped by the state.

The feasibility of renegotiating the terms has been considered to take into account the increased worth of the state lands to the resorts. Revisiting the decades-old agreements as a new revenue source was roundly panned by the Vermont Ski Area Association (VSAA) and then quietly abandoned by the Shumlin administration as politically impractical. The abandoned health care initiative and his resulting popularity decline may have contibuted to the Governor's choice, or as some observers speculate, he may just always have been like this.

According to leaked terms of the new plan, Vermont will “sell” the state forest land for a fixed one-time cash payment and permanently void the old leases. The Pree Fress retorts:

A source in the Shumlin administration said the ski resort purchaser will ‘own’ the land as a kind of trust hybrid known as a Reverse Trust, similar to corporate legally non-binding contracts and common non-legal binding misunderstandings. Said the source “It’s a win, win, the state gets a onetime payment and the resorts get ownership of thousands of acres of public land to use as their own. It’s a common sense decision … the Vermont way.” [added emphasis]

State officials note tough limits on land uses will be part of the deal, and forest development will be strictly limited with eye on preservation. Restaurants, water parks, hotels/condominiums, casinos and road building (on a case by case basis) will be confined to areas less than 6,000 ft in elevation.

A Reverse Trust (ARGAL /BARGL): the Vermont Way. 

Significantly, Vermont will retain an element of legal involvement -ownership can revert back to the state. The provision included at the insistence of the VSAA is a complicated legal arrangement called a Reverse Trust.

The Reverse Trust procedure occurs in the event a calamitous event or catastrophic liability is suffered by a ski resort. It automatically triggers the land (and any associated liability) “reverting” through a buy-back mechanism the State of Vermont is responsible for. This buy back feature “fixes” a guaranteed return to the resorts of their initial investment plus 10 perecnt.If any event (natural or economic) significantly degrades or otherwise permanently debilitates the property’s worth then the “fix” kicks in.

This agreement is similar in structure to A Retained Guaranteed Agreement of Liability (ARGAL) and the more familiar Business Agreement on Retained Guaranteed Liability (BARGL)

The VSAA ‘s Vin Bogataj is very please by the plan

“The proposed state forest sale will not only provide a welcome level of certainty to the ski industry but, free up a portion of yearly lift ticket sales now paid to the state, which now acts as little more than an unnecessary tax burden. The resulting boost in revenue will help VSAA member resorts continue to provide the kind of seasonal minimum wage service jobs Vermonters expect from us.”[ italics added to attract eyes]

In addition one ski resort owner reported he received informal assurances from high level state office holders that a portion of the forest land sale money will be used to improve winter time highway plowing and expand overall road capacity to several remote mountain locations

A tenative target date for enacting this is currently agreed to be by April 1st 2016!

Some of the biggest banks aren’t feeling all the respect from Democratic Senators they think they deserve — and maybe  they expect it after donating millions to canditates over the years.

The Too Big to Fail Mob of investment banks — Citigroup, JPMorgan, Goldman Sachs and Bank of America — are very upset that Senators Sherrod Brown and Elizabeth Warren are leading efforts to stave off amendments and other agreements that would weaken parts of the Dodd-Frank banking laws.

And this from the same Wall Street investment banking industry where total bonuses for 2014 were $28.5 billion. That is more than double the annual pay of more than 1 million workers earning minimum wages.

So upset were the banks that representatives from the Citigroup, JPMorgan, Goldman Sachs and Bank of America mob got together to make a plan:

“…discuss ways to urge Democrats, including Warren and Ohio Senator Sherrod Brown, to soften their party's tone toward Wall Street” [added emphasis]

Following the bankers’ strategy meeting unconfirmed reports surfaced that the four banks may not make as many donations to Democratic candidates as usual. Whew, a nice way to “soften” the tone.

Well, Senator Warren will have none of it from big banks. “They have taken their shot, but it will not work.” She wrote in a letter to supporters And she continued:

I’m not going to stop talking about the unprecedented grasp that Citigroup has on our government’s economic policymaking apparatus,” she added. “I’m not going to stop talking about the settlement agreements that JPMorgan makes with our Justice Department that are so weak; the bank celebrates by giving their executives a raise. And I’m not going to pretend the work of financial reform is done, when the so-called 'too big to fail' banks are even bigger now than they were in 2008.”

 Pretty good tone, Senator, it reminded me of this:

We had to struggle with the old enemies of peace –business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering. They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob. [added emphasis]

 That’s President Franklin Roosevelt from his Second New Deal announcement during his 1936 re-election campaign. That's a pretty good tone too.