Saturday, April 18, 2009

Dominic D’Alessandro on the road to Damascus

Today we learn that Dominic D’Alessandro, the CEO of Manulife, is attempting to make amends with his shareholders over his 2009 compensation payments. Forget about Manulife’s shareholders, when will Dominic make amends with all Canadians?

In the greater scheme of things who really cares whether Dominic D’Alessandro has or thinks he will make amends with Manulife’s shareholders by placing at risk some of his $12.6 million in compensation that he received as a windfall for five months of work in 2009, at a time when Manulife’s stock had tanked by 70%. This change in compensation is being motivated by the comment of: “I decided to take control of the situation myself, because it's my reputation that's at issue here, nobody else's”, said Dominic D’Alessandro.

Well if he’s worried about his reputation being at stake, then he has a much larger body of people to concern himself with , than Manulife shareholders, however many of them there might be, How about the 70% of Canadians who are without pensions for whom he played a key role in DEPRIVING THEM of an essential investment vehicle. An investment vehicle that gave them DIRECT INVESTMENT in the Canadian economy and that flowed taxes into Ottawa like never before. See October 27, 2006 Globe article by Steven Chase entitled “Tax cash floods in, leaving experts at a loss”. Instead Dominic D’Alessandro’s Machiavellian view of the economy was driven by all things Dominic-centric and all things Manulife-centric and meant taking away investment choices from Canadians in order to make them MORE CAPTIVE to the wares of Manulife. Instead of direct investments in Canada’s economy and a booming new issues market on the TSX, where income trusts were 50% of the new issue business, we had Manulife launching Income Plus the very week of Flaherty’s surprise income trust announcement. I wonder how much of a surprise it was to Manulife?

Manulife’s Dominic D’Alessandro would probably not have found himself in the position of having to make amends with Manulife shareholders had it not, IRONICALLY, have been for Income Plus. Dominic’s ill-fated decision to NOT HEDGE the risks associated with Income Plus turned it into a Liability Plus, and was the main cause of Manulife’s stock tanking by 70%. Of course these Manulife shareholders should be upset with a Board, that ostensibly represents shareholders ,who arbitrarily hands $12.6 million in discretionary pay to someone who made the pivotal decision to take on undisclosed risks that saw their investments drop by 70%. This is a quantum measure worse than the CEO of GM traveling to Washington for a government bailout by way of the company’s private jet. I guess Washington lawmakers know a thing or two about corporate governance and public opinion than the Board of Directors of Manulife.

As for making amends with ALL CANADIANS on his role and the role of other MANAGERS of Canadian corporations behind the scenes, that led up to Stephen Harper’s fateful betrayal of ALL TAXPAYERS on the income trusts betraya, I think the place for Dominic D’Alessandro to start, on his road to Damascus, is for him to begin by recanting the absurd and patently false testimony that he gave in Parliament, on February 1, 2007, of:

“The notion and the implication that somehow the government on this [income trust tax] file is responding to initiatives that originated with corporations is not based on reality.”

Which we know to be false because it was reported at the time of the income trust Halloween massacre in the Globe on November 1, 2006, that :

““High-profile directors and CEOs, meanwhile, had approached Mr. Flaherty personally to express their concerns: Many felt they were being pressed into trusts because of their duty to maximize shareholder value, despite their misgivings about the structure. Paul Desmarais Jr., the well-connected chairman of Power Corp. of Canada, even railed against trusts in a conversation with Prime Minister Stephen Harper during a trip to Mexico, and told him he should act quickly to stop the raft of conversions, according to sources.”

Dominic D’Alessandro and Paul Desmarais Jr, are both CEO’s of Life Companies and both serve on the Board of the Canadian Council of Chief Executives as Vice-Chairman of that self interest group of lofty business managers. How could he not have known, while at the same time he professes to speak to Parliament on behalf of what the government was doing and the activities of ALL corporations and not simply the conduct of Manulife.

Time for him to make amends to ALL CANADIANS if Dominic’s goal is to “take control of the situation myself, because it's my reputation that's at issue here, nobody else's”. In the greater scheme of things, Manulife shareholders mean nothing, and nor does Dominic’s tinkering with his compensation.


Kephalos said...

You have to brush up on your Bible. Dominic's conversion is merely partial. For the parable to be whole, Dominic would have to become the leading spokeman for income trusts; even to the extent of being willing to suffer jail, beatings, shipwreck and stoning. He's got a long way to go, eh?

Does he need to beg forgiveness? His very action says "Yes, dear shareholder I received compensation but I failed to create shareholder value."

There are number of other parables that apply to Dominic. Like this one:

16:1 He also said to the disciples, “There was a rich man who had a manager, and charges were brought to him that this man was wasting his possessions. 2 And he called him and said to him, ‘What is this that I hear about you? Turn in the account of your management, for you can no longer be manager.’ 3 And the manager said to himself, ‘What shall I do, since my master is taking the management away from me? I am not strong enough to dig, and I am ashamed to beg. 4 I have decided what to do, so that when I am removed from management, people may receive me into their houses.’ 5 So, summoning his master's debtors one by one, he said to the first, ‘How much do you owe my master?’ 6 He said, ‘A hundred measures [1] of oil.’ He said to him, ‘Take your bill, and sit down quickly and write fifty.’ 7 Then he said to another, ‘And how much do you owe?’ He said, ‘A hundred measures [2] of wheat.’ He said to him, ‘Take your bill, and write eighty.’ 8 The master commended the dishonest manager for his shrewdness. For the sons of this world [3] are more shrewd in dealing with their own generation than the sons of light. 9 And I tell you, make friends for yourselves by means of unrighteous wealth, [4] so that when it fails they may receive you into the eternal dwellings.

10 “One who is faithful in a very little is also faithful in much, and one who is dishonest in a very little is also dishonest in much. 11 If then you have not been faithful in the unrighteous wealth, who will entrust to you the true riches?

Luke 16

Dr Mike said...

The unfortunate thing is that Canadians do not realize or understand what has happened here with the massacre of income trusts--it was not leveling the playing field as Flaherty has droned-on about (certainly is a catchy vote winning phrase a la tax fairness for sure) , it was the loss of this very important income producing vehicle.

The young in Canada are very poor planners for future income as they age--live for today , raise those kids , have some fun & let things look after them selves--that Canada pension & old age security will be all we need--we can pay off that 100 grand or so we owe some day without any problem.

Well folks , that chicken will come home to roost when you are getting 2% return on a GIC when you are 70 years old & cannot even afford Meow Mix.

Income trusts were the ONLY vehicle out there that would afford a good quality of life by supplying sufficient funds to operate on a month to month basis.

The gov`t was short-sighted & remiss in affecting a non-consulted trust tax & we will be paying for this for years to come , unless of course the Liberals will step-up to the plate & do the right thing.

Dr Mike

Richard the Vitriolic said...

A little story on how some of us got our revenge on Manulife for Dominic D’Alessandro’s lobbying Harpass/Flatulence for the destruction of income trusts.

When Manulife was in full promotion mode of their “Income For Life” product, their agents wanted to come into our plus 50 adults only, active living, gated community to do a presentation. A sign up sheet was posted in our activity centre and a few names began to appear. We That Were Screwed stuck a note to the Manulife poster about how Manulife had lobbied for the Tax Fairness Plan so this presentation should be boycotted. Those who had signed up crossed their names off the list, leaving only 2-3 people for the presentation. The agents cancelled their event due to the lack of interest.

I’ve personally taken the boycott concept a step further and have removed Great West Life (Power Corporation-Paul Desmarais Jr.) from managing my wife’s pension and cancelled my subscription to The Globe & Mail.

We who have been hurt by the lobby efforts of D’Alessandro and Desmarais to kill Income Trusts have to go beyond squawking and bitching to boycotting. Financial pressure is a great tactic to employ against those companies that colluded to destroy our RRSP’s and retirements.

Dr Mike said...


Well done!!

Dr Mike

Anonymous said...

Great comment Richard the Vitriolic!

Even if you had attended the Manu-event and purchased some Income Plus, it still would have served to extract some revenge from Domo Manulie, because your Income Plus would have been added to the other $5 billion in Income Plus that blew up in Domo's face.....or shall I say, two-face.

Nice testimony by Domo Manulie before the Finance Committee. NOT. Only the CONs would be dumb enough to swallow a line like that, about one corporate CEO buying absolution for every other CEO under the Sun (Including Sun Life, no doubt), except the CONs (Rick Dykstra et al) already knew Domo's answer to be false, or they wouldn't have asked this staged question in the first place.

I think that tactic is covered on page 37 of Harper's 200 page manual on how to make Parliamentary Commitees useless.

Anonymous said...

Thank you Dr. Mike for your very insightful comments. Well said.

As for Manulife ... Dominic if you want to help restore your reputation in my household .. bad enough you ruined our cash accounts and RSP's with your role on Trust Units ... you and your crappy company can stay the f-ck away from my partner's company pension plan. The shitty, shitty mutual funds you have offered are worthless. Employees would get more benefit watching management flush their pension money down the toilet than they would from those mutual funds your reps are trying to peddle so aggressively. F-ck you and Manulife - you all deserve to go down. We consider ourselves fortunate that we have managed to stay away from your insurance products.