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AutoZone, Inc. Message Board

  • billberggren billberggren May 3, 2004 1:41 AM Flag

    OT: Shareholder Bill of Rights.

    I made most this up, watching AZO.

    *** Shareholder Bill of Rights ***

    I call for the complete elimination of stock
    and stock option payments to employees, board
    members, and ceos.
    This dilution will hurt the stocks value over time.
    A much better approach would be to give 10
    percent of total earnings as a bonus to employees. Thus, if an employee leaves
    they lose the bonus. If they were to recieve options they could become millionaires without
    providing significant contribution to the company.

    The company should strive for low or no debt. A company with no debt rarely goes out of business.
    A company with no debt will allow the company to get through the disasters or new additions.
    If new debt is created, it should be payed back as soon as possible. Some cash on hand is
    nice too.

    Automatic stock buybacks, 20-50 percent or more of earnings should be spent
    buying back stock regardless of p/e. A high p/e may signify future value of the company
    shareholders perceive. Since this is the best investment available, buying
    your own shares should be the best way to use the stocks money, minus the amount
    to reduce the debt. If conditions are favorable, it might be wise to use debt to
    buyback shares, only if the 1/(p/e) is higher that either the tbond or tbill rate.
    If the share price is too high, consider spin-offs, or create a new division in a
    growth area. Thus, every year, shares outstanding will decrease and
    diluted shares outstanding will equal shares outstanding.

    About 20 percent of the earnings should be paid as dividends. No secondary offering of stock
    unless under dire cash needs of the inital growth phase.
    All growth should come from preferably come from within. An exeception, might be
    to purchase a company in which you buy supplies.

    The CEO and management should not be the highest paid employees of the
    company. This management should preferably come from below. The employees below
    put in the time to understand the business.
    The CEO should be paid within 10X the lowest paid employee. The engineers
    that develop the products and salemans might possibly be paid the highest paid
    within 20X.

    Under no circumstances will the company be sold to another. Many of these are from
    large companies with little or no growth prospects.

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