Longtime Lompoc businessmen Michael Carroll and Robert Klug have been elected to the Board of Directors of the Allan Hancock College Foundation.
The board of directors now includes 23 community members from the Santa Maria, Lompoc and Santa Ynez valleys.
“We are fortunate to welcome these two strong leaders from the Lompoc Valley,” said Jeff Cotter, executive director of the Allan Hancock College Foundation. “They have demonstrated success in both business and community service. They are the kind of leaders who will make a lasting difference in the lives of the students of our communities.”
Klug will provide leadership on the foundation’s nominating committee. He is the chief operating officer and president of his family’s business, Master Repair Service Inc.
He has a long history of community service and has volunteered time with the Lompoc Rotary Club, Lompoc Valley Club, Elks Lodge, Lompoc Boys and Girls Club, Leadership Lompoc Valley, Scholarship Foundation of Santa Barbara, Lompoc Chamber of Commerce and LOVARC Board of Directors. He also served as president of the Lompoc Rotary.
In addition to general foundation business, Carroll will provide leadership to the foundation’s scholarship program, which this year will set a record by awarding more than $500,000 in scholarships to Hancock students.
Carroll is the vice president and branch manager for Union Bank in Lompoc. A 23-year resident of Lompoc, Carroll is also involved with the Lompoc Boys and Girls Club, Lompoc Chamber of Commerce, and is a Paul Harris Fellow Award recipient within the Lompoc Rotary Club.
For more information about the Allan Hancock College Foundation, call 805.925.2004.
Tuesday 12 April 2016
There's Only 1 Way Forward for AIG and CEO Peter Hancock
U.S. stocks are lower in late morning trading on Wednesday, with the Dow Jones Industrial Average (DJINDICES:^DJI) and the S&P 500 (SNPINDEX:^GSPC) both down 0.65% at 12:05 p.m. EST. Shares of mammoth insurer American International Group Inc are outperforming, up 0.33%.
At the end of October, this columnist wrote that it took Carl Icahn to point out the obvious on AIG. In an open letter to the insurer's CEO Peter Hancock, the legendary investor called for two immediate actions in order to enhance shareholder value:
Hancock has little room to maneuver, as it now appears AIG's institutional shareholders privately hold similar views to those the unabashed Icahn states publicly.
In a note published on Tuesday, Sanford C. Bernstein & Co.'s Josh Stirling presented the results of a survey Bernstein conducted across some of its institutional clients. The numbers suggest there is essentially no support for the status, nor any ambivalence regarding the way forward. For example:
There is quite a bit of research supporting the existence of a diversification (or conglomerate) discount in the financial services sector (see, for example, Laeven & Levine (2005) and Schmid & Walter (2007)).
In other words, companies that diversify across different businesses areas, such as lending and securities underwriting, are valued less highly than those that choose to focus on a single one.
That diversification discount also exists within the insurance industry. The authors of a 2008 paper in The Journal of Risk and Insurance concluded:
Furthermore, at AIG, that conglomerate discount is probably compounded by a size discount because it is one of only three insurers that has been designated as a SIFI (Systemically Important Financial Institution) and will, therefore, almost certainly be required to hold additional capital.
With rival insurer MetLife Inc announcing a breakup plan of its own yesterday that would see it split off a substantial part of its retail segment, AIG had better come up with something big on January 26, failing which, Hancock is not long for his position.
For investors, I believe there is a medium-term opportunity here, with AIG's shares now trading roughly 7% below where they closed on Oct. 28, the day Icahn published his entreaty and announced he owned "a large stake" of the company.
At the end of October, this columnist wrote that it took Carl Icahn to point out the obvious on AIG. In an open letter to the insurer's CEO Peter Hancock, the legendary investor called for two immediate actions in order to enhance shareholder value:
- Implementation of a cost control program.
- AIG should focus on property and casualty insurance, hiving off its life and insurance businesses into two separate publicly traded companies.
Hancock has little room to maneuver, as it now appears AIG's institutional shareholders privately hold similar views to those the unabashed Icahn states publicly.
In a note published on Tuesday, Sanford C. Bernstein & Co.'s Josh Stirling presented the results of a survey Bernstein conducted across some of its institutional clients. The numbers suggest there is essentially no support for the status, nor any ambivalence regarding the way forward. For example:
- "Only 4% of investors said they support management's current strategy, as it is."
- "Only 9% of the respondents indicated they would support management's directors in their most likely posture -- pursuing the current strategy enhanced by a 'modest acceleration of cost-cutting and small divestitures."
- 86% of respondents want AIG to announce a plan "de-conglomerate and un-lock value by selling businesses and/or spinning divisions."
There is quite a bit of research supporting the existence of a diversification (or conglomerate) discount in the financial services sector (see, for example, Laeven & Levine (2005) and Schmid & Walter (2007)).
In other words, companies that diversify across different businesses areas, such as lending and securities underwriting, are valued less highly than those that choose to focus on a single one.
That diversification discount also exists within the insurance industry. The authors of a 2008 paper in The Journal of Risk and Insurance concluded:
Our results indicate that un-diversified insurers consistently outperform diversified insurers. In terms of accounting performance, we find a diversification penalty of at least 1 percent of return on assets or 2 percent of return on equity.Two percentage points may not seem like much, but in the context of a company that has earned a median annual return on common equity of just 7.3%, it starts to look pretty significant.
Furthermore, at AIG, that conglomerate discount is probably compounded by a size discount because it is one of only three insurers that has been designated as a SIFI (Systemically Important Financial Institution) and will, therefore, almost certainly be required to hold additional capital.
With rival insurer MetLife Inc announcing a breakup plan of its own yesterday that would see it split off a substantial part of its retail segment, AIG had better come up with something big on January 26, failing which, Hancock is not long for his position.
For investors, I believe there is a medium-term opportunity here, with AIG's shares now trading roughly 7% below where they closed on Oct. 28, the day Icahn published his entreaty and announced he owned "a large stake" of the company.
The $15,978 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. In fact, one MarketWatch reporter argues that if more Americans knew about this, the government would have to shell out an extra $10 billion annually. For example: One easy, 17-minute trick could pay you as much as $15,978 more...each year! Once you learn how to take advantage of all these loopholes, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how you can take advantage of these strategies.
Alex Dumortier, CFA,
has no position in any stocks mentioned. The Motley Fool has no
position in any of the stocks mentioned. Try any of our Foolish
newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. In fact, one MarketWatch reporter argues that if more Americans knew about this, the government would have to shell out an extra $10 billion annually. For example: One easy, 17-minute trick could pay you as much as $15,978 more...each year! Once you learn how to take advantage of all these loopholes, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how you can take advantage of these strategies.
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