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DHB Industries, Inc. (DHB) Message Board

  • saprophytic1 saprophytic1 Oct 10, 2003 7:17 PM Flag

    OT: On Nepotism

    Controversial but worth reading:

    'In Praise of Nepotism'
    Adam Bellow's amazingly wrongheaded opus "In Praise of Nepotism: A Natural History"

    �Bellow wants to draw a distinction between "good" and "bad" nepotism. The latter involves blindly favoring family members who are utterly unqualified for the positions they are given, and worse yet, ungrateful. "Good" nepotism seems to involve helping members of one's family, instilling loyalty and other "family values" in one's offspring, and helping them learn the ropes of the familial business, trade, or profession. As Bellow defines it, good nepotism can also mean mentoring proteges who are not actually family members. In his view, "nepotism" might even mean having a sense of loyalty to one's religion, ethnic group, race, or nation.�

    A recent study published in the June 2003 issue of the Journal of Finance confers statistical legitimacy on Bellow. When authors Ronald C. Anderson and David M. Reeb examined the performance of Standard & Poor's 500 Index stocks, they found that companies that have retained founding-family ownership have done better than nonfamily companies. The findings, according to Anderson and Reeb, contradict "anecdotal accounts and prior literature [suggesting that]continued family-founding ownership in U.S. corporations is an organizational form that leads to poor performance." What's the secret sauce of family firms? The authors point to a focus on investing for the long term, a reluctance to manipulate current earnings, and the fact that concentration of ownership "mitigates managerial opportunism."

    CNBC further reports: "The Investor Responsibility Research Center has identified nearly 140 examples of corporations in the Standard & Poor's 500, small and mid-cap indexes that have directors who are related to other directors or employees."

    Here in America, where we have a historical aversion to nepotism, it has flourished nonetheless in the Mafia, Hollywood, and in our famous dynastic political families: the Adamses, Roosevelts, and Kennedys.

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    • - With regard to the lease:

      �Management performed a comparison of market rates at the time the lease was entered into, and believes that the terms of the lease were at current market price that would then have been obtained from an unrelated party.�

      - Are the prices TAP charges DHB a fair price for the company?:

      �The unit prices charged by TAP have been less than the prices charged to the Company by its previous outside suppliers, and TAP�s products are available on demand�. TAP is an approved subcontractor under the applicable contracts between the Company and the United States federal government.�

      - Are the prices TAP charges DHB fair to investors? Why doesn�t the company just buy-out TAP?
      See message 10964 by vntravel2003

      • 1 Reply to saprophytic1
      • Sapro..I did go back and read msg.10964.You are right about the discount for minority owned cos.I was the manager in a machine shop in Calif.And yes we bid on state and federal contracts for that very reason (usualy 10% discount)because the company was owened by a female.Lots of red tape with them but well worth it.

        Also I keep asking about the Marine contract..any links or posts so I can learn more about the "contract"? Thanks...Staying long Caloak