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Two cents' worth

Dear Friend,

Here’s a quick quiz.

Who said this in his 2006 annual report? (I have changed the company name to XYZ so as not to give it away):

Dear shareholder,

For XYZ, 2006 was a pivotal year. It was a year of transformation—one in which we built a strong foundation to grow XYZ’s preeminent brands. We began to increase operating efficiencies, strengthen and leverage our market-leading knowledge and resources, and evolve our business model to increase revenues and profitability. We migrated toward greater standardization of business processes, better client-profitability metrics, and more effective compensation systems. We focused on improving the operations and financial performance of each operating company, simultaneously seizing opportunities to leverage XYZ as a whole

There remains a great deal of work to be done, but today we are more client-centric, efficient, and profitable.”

And here’s another clue, today that same company posted fourth-quarter earnings that were less than half of those a year earlier?

Give up? It’s Marsh’s former CEO Mr Cherkasky of course!

And guess what? Today’s filing also revealed that Cherkasky’s departure has cost Marsh $27m ($14m in the fourth quarter and $13m in the third quarter).

$14m is two cents a share, hence the title above.

So how about this for a re-write?

“Dear Shareholder, in less than a year’s time my personal departure is going to cost you just under 4 cents for every share you own in MMC. So long, and thanks!”

Signed M.C.

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