The Sunbeam Board Of Directors - 1620 Words

This paper attempts to study and analyze the decisions of the Sunbeam Board of Directors (BOD) during Albert Dunlap’s stint as the Sunbeam’s Chief Executive Officer (CEO). This analysis will comprise the CEO hiring and his shareholder primacy view, first year and second year CEO compensation package review and will conclude with the BOD’s decision to fire the CEO. In July, 1996 Sunbeam was a dying brand, which struggled to survive in the increasingly competitive market-place and needed a savior.(case p. 2) Sunbeam’s BOD brought in Al Dunlap to turnaround this ailing firm, based on Dunlap’s proven ‘restructuring and downsizing’ track record. â€Å"For much of his career before coming to Sunbeam, Dunlap was known as the poster child of corporate restructuring (case p.1).† Self-serving CEO’s (Dunlap’s) short-sighted and flawed shareholder primacy view Dunlap focused largely and explicitly on shareholder primacy and practically lacking consideration for all other stakeholders of the firm, which reflected in his â€Å"take-no-prisoners† (case p.1) management style during his tenure as Sunbeam’s CEO. Dunlap’s goals were limited to just maximizing stockholders’ wealth by adopting fast turnaround tactics and all other salient characteristics of the very existence of corporation such as product innovation, product/service quality, employee and customer satisfaction and corporate ethics were completely neglected. Mr. Dunlap’s adaptation of shareholder-theory was based on historic view ofShow MoreRelatedThe Sunbeam Board Of Directors1488 Words   |  6 PagesThis case attempts to study and analyze the decisions of the Sunbeam Board of Directors (BOD) during Albert Dunlap’s stint as the Sunbeam’s C hief Executive Officer (CEO). This analysis will comprise the CEO hiring and his shareholder primacy view, first year and second year CEO compensation package review and will conclude the BOD’s decision to fire the CEO. In July, 1996 Sunbeam was a dying brand, which struggled to survive in the increasingly competitive market-place and needed a savior.(case pRead MoreAl Dunpal Case Study1394 Words   |  6 Pagesstock price from $38.00 to $120.00 and sold the company to Kimberly Clark for more than $6B. Due to his past success, Al Dunlap was hired to turn around Sunbeam. Sunbeam had a long period of management and financial instability. In other words, Sunbeam needed a â€Å"savior.† Many believed this was Al Dunlap. Unfortunately, through his tenure at Sunbeam, stock price fell from a high $53.00 to $16.00 on the day that he was fired. Were his â€Å"rightsizing† techniques not adequate? or was he just an overpaidRead Moreï » ¿Case Study â€Å"Al Dunlap a t Sunbeam†1020 Words   |  5 Pagesï » ¿Case Study â€Å"Al Dunlap at Sunbeam† Response to Dunlap’s view of shareholder privacy I don’t agree with Dunlap’s view that shareholders are the only constituencies about which corporate directors and executives should be concerned. In light of agents’ obligations to principals, managers are supposed act in the best interest of the company’s shareholders, the major capital providers, when making decisions; however, as shareholders and stakeholders interests are to a large extent compatible, especiallyRead MoreCorporate Fraud: Sunbeam Corporation and Chainsaw Al Essay1940 Words   |  8 PagesBackground In July 1996, Alert J.Dunlap (also known as Chainsaw Al)was hired as CEO and Chairman by Sunbeams board of directors to help the company from a period of lagging sales and profits and make it an attractive acquisition target. Dunlap used cost-cutting style method and had a reputation for results that immediately the price of Sunbeam stock price increased by 60 percent. How things begin? In 1997, Dunlap fired thousands of employees, shut down factories and warehouses, and streamlinedRead MoreSunbeam: Balance Sheet and Shareholders Wealth966 Words   |  4 Pagesidea of the different investment, financing, and dividend decisions made by that particular firm. When it comes to the Sunbeam case, I think that in the beginning, June of 1996, Albert Dunlap definitely succeeded in maximizing shareholders’ wealth. It seems to me that he was more of a short term guy, considering that in the long run everything ended up backfiring. Sunbeam used a sketchy approach when it came to their accounting practices, and in turn the company was able to report higher revenueRead MoreAl Dunlap and Sunbeam875 Words   |  4 PagesDEPARTMENT OF ACCOUNTANCY UNIVERSITY OF ILLINOIS MEMORANDUM DATE: September 14, 2011 SUBJECT: Al Dunlap at Sunbeam analysis Introduction This memo will reflect on and analyze the decisions of the Sunbeam Board of Directors during Albert Dunlap’s tenure as CEO. This analysis will include an overview of Sunbeam’s goals, evaluation of 1996 – 1997 and 1998 compensation package, assessment of the firing decision by BOD and the overall governance of the BOD. Sunbeam’s Goals Dunlap is famousRead MoreSunbeam Corporation and Chainsaw Al3034 Words   |  13 PagesOTTAWA UNIVERSITY FINANCE ADMINISTRATION POST-CLASS ASSIGNMENT MODULE 5 FAHRIAN C.H. CHOE STUDENT ID: 128370 MELAKA # 03 DUE: JULY 5, 2004 FINAL CASE IN FINANCIAL DECISION MAKING SUNBEAM CORPORATION AND CHAINSAW AL Prepared For Richard Brewington Instructor Ottawa University International Prepared by Fahrian C.H. Choe Student Ottawa University International June 30th, 2004 CONTENTS Read MoreSunbeam Corporation Ethics4981 Words   |  20 PagesBusiness Case Studies – January/February 2010 Volume 6, Number 1 Sunbeam Corporation: A Forensic Analysis Patricia Hatfield, Ph.D., Bradley University, USA Shelly Webb, Ph. D., Xavier University, USA ABSTRACT The members of the Board of Directors at Sunbeam were completely bewildered. Al Dunlap, Sunbeam’s highly successful but controversial CEO was threatening to resign after almost two years of leading Sunbeam successfully out of a slump that had threatened the long-term viability Read MoreSunbeam Ethical Analysis2500 Words   |  10 Pages 3 Restructures in Sunbeam 3 Turnaround at Sunbeam 5 Accounting Practices at Sunbeam Corporation 5 Accusations 5 Key Players in Sunbeam’s Scandal 6 Unethical Behaviours 7 Ethical Analysis 7 Stakeholder Theory 7 Deontological Theory 7 Shareholder Theory 7 Utilitarianism Theory 7 Reference 9 Executive Summary This report is based on Sunbeam Corporation and Albert DunlapRead MoreCooperative Advertising Reserve : A Cooperative Advertisement Reserve Essay906 Words   |  4 PagesAn excessive figure called the cooperative advertising reserve was literally recognized by Sunbeam in the year 1996. It was mainly established to fund a part or portion of its personal retailers’ costs by running the local promotions.Anderson was supposed to have identified the increase of the amount recorded known to 25% more than prior’s year accrual amount which turns out to be an amount of $21,800,000 dollars at least identified during the horizontal analysis of the financial statement especially