Business and Finance

New York’s top court backed a lower court in throwing out four of the state’s six claims against former New York Stock Exchange Chairman Richard Grasso’s $187.5 million compensation package, saying the attorney general at the time had exceeded his authority.

In a unanimous decision Wednesday affirming a midlevel court’s ruling, Court of Appeals Chief Judge Judith Kaye said the four challenges were based for the most part on just the size of the 2003 compensation package. But state law requires more: evidence Grasso knew the payment was unlawful or that he exercised bad faith in wasting NYSE assets, she wrote.

"The attorney general may not circumvent that scheme, however unreasonable that compensation may seem on its face," Kaye wrote.

Two claims alleging unlawful transfer of NYSE assets and breach of fiduciary duty remain against Grasso. He is separately challenging those, which have been upheld so far by a lower court.

Kaye noted that the four claims crafted by former attorney general Eliot Spitzer, once dubbed the "sheriff of Wall Street," carried a lower burden of proof than the remaining claims. They were based on common law doctrine that the state can sue to protect the public interest. She described that as "overriding the fault-based scheme codified by the Legislature and thus reaching beyond the bounds of the attorney general’s authority."

Calls to Attorney General Andrew Cuomo, whose office is now handling the case, and to Grasso attorney Gerson Zweifach were not immediately returned Wednesday.

Zweifach had argued the attorney general’s office could "prove [Grasso] got a lot of money, but that is not enough. It’s not how much he got. It’s whether under all the circumstances he acted in good faith and with reasonable prudence."

According to the court, Grasso’s base salary from 1995 through 2002 was roughly $1.4 million, with bonuses that escalated from $900,000 in 1995 to $10.6 million in 2002 no fax payday loan. His 2003 agreement provided a lump sum of $139.5 million, with an additional $48 million payable over four years.

The NYSE was organized at the time as a not-for-profit corporation, governed by state law. State attorneys argued that the NYSE compensation committee was hand-picked by Grasso and ignored a benchmark system in calculating his pay. They also noted several NYSE board members expressed disapproval of the 2003 package, which was left off a meeting agenda, then brought up and approved at the last minute when opponents were missing and others had no chance to review the details in advance.

The negative reaction to the compensation forced Grasso to resign, prompting an internal investigation and a request from the NYSE board for Spitzer and the federal Securities and Exchange Commission to investigate.

"This case demonstrates everything that can go wrong in setting executive compensation," Spitzer said in filing the 2004 lawsuit. "The lack of proper information, the stifling of internal debate, the failure of board members to conduct proper inquiry and the unabashed pursuit of personal gain resulted in a wholly inappropriate and illegal compensation package."

Joining Kaye in the ruling were judges Carmen Beauchamp Ciparick, Victoria Graffeo, Susan Read, Robert Smith, Eugene Pigott Jr. and Theodore Jones Jr. 

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Oracle Corp (ORCL.O: Quote, Profile, Research, Stock Buzz) reported a 27 percent rise in quarterly profit as sales of new software beat expectations, but the company gave a cautious outlook citing economic uncertainties, and its shares fell 3 percent.

Oracle, whose shares had been near a seven-year high, posted May quarter results that topped Wall Street estimates on virtually all measures. But the company cautioned that while business is growing, deals are taking longer to close than they have historically as customers are giving them more scrutiny.

“Bit more cautious environment. But … we have a big enough pipeline hopefully to get through it all,” Oracle President Charles Phillips said on a conference call.

Oracle gave forecasts for its fiscal first quarter, ending in August, roughly in line with expectations. It saw revenue growing 18 percent to 20 percent, net income at 17 to 18 cents per share, and earnings excluding items at 26 to 27 cents.

Analysts, on average, were looking for earnings excluding items of 27 cents per share, according to Reuters Estimates.

Pacific Crest Securities analyst Brendan Barnicle said Oracle’s commentary on business trends suggested some caution about the economy paydayloans. He said smaller software maker Red Hat Inc (RHT.N: Quote, Profile, Research, Stock Buzz) exhibited a similar tone in its report on Wednesday.

“I think companies are going to continue to be cautious about their guidance that they give moving into summer,” Barnicle said.

Chief Financial Officer Safra Catz said the August quarter faced tough comparisons with a year ago, when software license growth had jumped 35 percent from the year-earlier period. 

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Qatar’s transfer of control of its stock exchange to NYSE Euronext (NYX.N: Quote, Profile, Research, Stock Buzz) (NYX.PA: Quote, Profile, Research, Stock Buzz) is part of a modernization drive that will jolt rivals in the booming Gulf Arab region to follow suit.

The family ruled state is the first in the Gulf to sell part of its domestic bourse in a region where exchanges fall short of international accounting and reporting standards and are dominated by individual investors, heightening market volatility.

Qatar’s surprise sale of 25 percent of the Doha Securities Market for $250 million and surrender of management control demonstrates the challenges facing the region, whose surplus petrodollars have often been invested in Western companies.

Regional bourses, and regionally-listed companies, are often not as attractive to international or domestic investors as other markets — established and emerging — and are under pressure to improve.

The Qatar deal increases pressure on neighbors such as Kuwait and Abu Dhabi to consider similar measures or lose out in the race to become the leading regional exchange.

“It will definitely encourage other markets to have the best practices from around the globe,” said Faisal Hasan, head of research at Kuwaiti investment bank Global Investment House instant payday advance. “Aligning with international exchanges is already a trend.”

Dubai last year agreed to sell 33 percent of its Dubai International Exchange (DIFX) to Nasdaq OMX (NDAQ.O: Quote, Profile, Research, Stock Buzz). Dubai had set up the DIFX in 2005 to operate according to international standards and attract regional initial public offerings, but since then only 14 companies have listed stock on the exchange, of which just three are primary listings.

On at least two occasions companies have dropped plans to sell stock in IPOs and list on the Dubai exchange, one as recently as May. 

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Many Americans will forgo vacations and dine in more often to combat soaring fuel prices, while 1 in 10 are rethinking where they live or work, according to a Reuters/Zogby poll released on Wednesday.

Nearly 39 percent of those surveyed said they were considering changing vacation plans, while 31 percent plan to eat out less often. The poll of 1,113 likely voters found that 58 percent intended to drive less, and 2 out of 10 said they would rely more heavily on mass transportation.

About 10 percent said they were pondering moving nearer to work, while roughly the same percentage said they were thinking about finding a job closer to home.

“This is a broad, cultural change,” pollster John Zogby said, pointing out that while 10 percent is a small minority, it translates into millions of people considering major moves.

“Low energy costs and the availability of autos helped fuel suburbanization,” he said quick payday loan. As people conclude that high energy prices may be here to stay, “this is now one of those big changes in our lives that requires nothing short of dramatic lifestyle changes.”

Rising costs for fuel and food have come at a particularly vulnerable time for the U.S. economy, which was already on shaky ground because of the housing market slump that prompted banks to curb lending.

Airlines, hotels, auto makers and restaurants have been hit particularly hard as oil topped $130 per barrel, and many companies have responded by cutting production, laying off workers or raising prices.

None of that bodes well for the U.S. economy. 

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MADRID–Spain’s government called on striking truck drivers yesterday to get back to work and warned they had no chance of prevailing in a four-day-old stoppage that has led to shortages and panic-buying of food and fuel.

But two unions representing the strikers, who are protesting soaring fuel prices, stuck to their main demand: establishment of minimum rates for their hauling services.

Prime Minister José Luis Rodriguez Zapatero insisted Spain is gradually returning to normal, and he promised "zero tolerance" of violence or other disturbances by strikers.

The government signed an agreement on Wednesday night with nonstriking unions who represent the vast majority of Spain’s trucking industry. It calls for tax relief and other measures to cushion the effects of higher fuel prices, but not the key demand of the strikers, who are mainly self-employed drivers, and the latter refused to sign.

Zapatero appealed to the strikers to give up their demand and "join in the task of acting responsibly."

Development Minister Magdalena Alvarez told reporters: "One cannot maintain a rigid position when it is causing so much harm."

The strikers’ position, she said, "is not going anywhere."

Interior Minister Alfredo Perez Rubalcaba guaranteed police escorts for truckers who want to work.

He said the diehards control only about 12 per cent of Spain’s 380,000-vehicle trucking industry.

Portuguese truckers ended their strike late Wednesday after voting to accept a government package of measures – including lower highway tolls and tax breaks – to offset high fuel prices.

Spain’s interior ministry said highways that had been clogged by striking truckers are now clear and that 71 people have been arrested since the strike began on Monday.

On Wednesday, riot police removed strikers who had been blocking a key border crossing with France and a highway leading into Madrid.

But supply problems remained payday loans application. More than half a dozen auto plants are idle for lack of parts to assemble vehicles.

Few trucks unloaded yesterday at Mercamadrid, the main wholesale market in the Spanish capital, and many stands there were empty, Spanish media reported.

Antonio Berzal, who runs a grocery store and goes to the wholesale market every morning, said prices of some scarce fruits like cherries have tripled in a matter of days.

"People are taking advantage of the situation," he said.

Sara Ruano, a checkout clerk at a supermarket, said there has been a wave of panic-buying this week, especially on milk.

"Today is not so bad, but yesterday this place was packed," she said yesterday.

The independent drivers who are on strike say big trucking companies can cope better with fuel price increases by lowering their hauling rates to land more jobs. So the self-employed drivers are demanding a minimum, guaranteed rate for their services.

The Socialist government refuses, saying that would interfere with free-market competition and actually violate European Union rules.

Spanish truck drivers say their diesel costs have risen 36 per cent in a year.

Spanish fishermen have been on strike since May 30, also over fuel costs, and this is compounding problems getting fish supplies to consumers.

On Wednesday, a federation mostly representing small boat owners announced it was returning to work because it could not maintain the strike.

But the bigger fishing boat owners are continuing their nearly two-week-old stoppage.

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Financial markets focused on central bankers Tuesday morning, amid indications that the easing of interest rates in the United States is at an end.

Wall Street stock index futures pointed to a weak opening and overseas markets were lower after Federal Reserve chairman Ben Bernanke indicated interest rates might have to rise to forestall inflation.

The Bank of Canada, meanwhile, releases its policy decision, with market players widely expecting a quarter-point reduction in the overnight rate to 2.75 per cent – an expectation which has helped prod down the Canadian dollar by about three cents since the end of May.

The loonie pulled back further Tuesday, trading at 97.13 cents US, down 0.76 cent from Monday's close.

Private-sector economists see the outlook for further rate decreases in Canada as doubtful, as inflation worries increase and the Federal signals its rate-cutting is over.

Bernanke sent the clearest signal yet late Monday, saying U.S. growth appears weak in the current quarter but "the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so."

He stressed inflation concerns, observing that "the latest round of increases in energy prices has added to the upside risks to inflation and inflation expectations."

Bernanke added that the Fed "will strongly resist an erosion of longer-term inflation expectations" – strengthening expectations that the U.S. central bank will hold the cost of short-term money steady at its next meeting June 24-25 and probably through much of this year, with moves beyond then more likely to be up than down.

Oil prices revived Tuesday, gaining $1.42 to $135.77 on the New York Mercantile Exchange. That was off from last week's peak of $139.12 a barrel after a $4.19 pullback Monday, but many traders expect another move higher amid global supply and demand concerns and jitters over factors ranging from geopolitics to the weather.

"The market is taking a breather after the very sharp gain last week but it's undeniable we have a strong uptrend in the oil markets," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

"The market is still prone to further price spike."

Shum said supplies could be hit if hurricanes hurt production in the Gulf of Mexico, and anxiety continues over an Israeli cabinet minister's warning last week of an attack on Iran if it doesn't halt its nuclear program.

Asian stock markets sank Tuesday, with China's main index dropping 7.7 per cent on the country's latest move to tighten credit and restrain inflation fast cash online. The Chinese government ordered banks to keep more deposits on hand.

The benchmark Shanghai composite index fell 257.34 points to 3,072.33, and Hong Kong's Hang Seng index dropped 4.2 per cent to 23,375.52.

"Investors are concerned about a total meltdown and they just want to get out of the market," said Alex Tang, head of research at Core Pacific-Yamaichi in Hong Kong.

Elsewhere, Australia's benchmark index fell 2.8 per cent to 5,437.5, and Tokyo's Nikkei 225 closed down 1.1 per cent at 14,021.17 after dropping 2.1 per cent Monday.

Losses were less intense in Europe, with London's FTSE 100 index off about 0.5 per cent near midday.

In Canadian company news, Major Drilling Group International Inc. (TSX: MDI) – a major international success from its headquarters in Moncton, N.B. – predicts continued strong growth after its best-ever financial year. The global mine-industry drilling provider earned $25.4 million in its fourth quarter ended April 30, up 43 per cent from a year earlier as revenue increased 32 per cent to $170 million.

And CAE Inc. (TSX: CAE), another Canadian global leader in its field, has won a contract worth C$24 million to provide two full-mission simulators for the new BAE Systems Hawk 128 advanced jet training aircraft. CAE said the contract with Lockheed Martin, working for the U.K. military, could expand to $48 million if options are exercised.

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CALGARY–WestJet Airlines Ltd. has reported a May load factor of 79.5 per cent, off from 80 per cent in May 2007, as revenue passenger miles rose 19.3 per cent from a year earlier while capacity increased 20.1 per cent.

The year-over-year slippage in the proportion of seats filled came after a 15-month string of record load factors ended in April.

"Operationally, we like to run our airline at a load factor of between 78 and 82 per cent, which means right now we're right on target," WestJet CEO Sean Durfy stated Wednesday.

"And when we operate in that zone while increasing our capacity by more than 20 per cent, it tells us there is continued demand for our exceptional guest experience."

Revenue passenger miles totalled 1.13 billion in May, up from 946 million a year earlier, while available seat miles on WestJet's 75 Boeing 737 aircraft increased to 1.42 billion from 1.18 billion no fax payday loan advance america cash advance.

Revenue per available seat mile for the quarter "is tracking to improve over 2007," WestJet stated.

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Canada needs at least an additional 250,000 construction workers over the next eight years to keep pace with new projects and replenish an aging workforce, an industry report says.

"We are facing some significant labour challenges that are impacting us and will impact us in the future if we don’t resolve them," said George Gritziotis, executive director of the Construction Sector Council.

Canada-wide, employment in the industry has increased by a record 39 per cent over the last five years, but that influx won’t be enough, said the report.

"The immediate and urgent need is for qualified and experienced workers," it said.

Western provinces such as Alberta and British Columbia are hardest hit by the shortage of workers. Ontario, possibly facing a recession, is expected to have zero growth in its construction labour force over the next four years.

Ontario building permits fell by 16 per cent last month to $2 billion. The housing market has also peaked as starts are expected to retreat over the next several years.

Still, much of the slack is being replaced by non-residential construction projects and Ontario will face significant labour shortages in the longer term if retiring workers aren’t replaced, said the council – a non-profit partnership between the construction industry and government.

"There are not a flood of workers on the streets," said Gritziotis.

For one thing, other provinces are likely to bleed workers from Ontario in favour of more lucrative jobs, especially this year and next, said the report. Possible large-scale infrastructure projects are on the horizon, including nuclear electrical generation plants, that the province could have a difficult time finding labour for.

Manpower shortages on construction sites inevitably cause wage inflation as companies up the ante to finish projects on time payday loans lenders electronic check payday advance.

The 2010 Olympic site in Whistler, B.C., for example, was initially budgeted at $400 million and the cost has now almost doubled, said Gritziotis.

"When demand exceeds supply, you have cost overruns with wage rates that are a huge portion of that," he said.

Tim Smith, senior vice-president of Ellis Don, said it is a constant struggle for industry to maintain a skilled workforce.

"We have a lot of skilled, capable people out there, but we haven’t kept pace in replenishing them," Smith said. "In Ontario, despite the economic slowdown we’re still under pressure to build projects."

The construction council said retaining older employees while encouraging new people to join trades is one way to stem the flow.

The council also wants to see an increase in the number of temporary foreign workers, as well as a focus on recruiting Canadian women and aboriginal people.

"Attracting young people to start their careers in construction will be an increasingly hard sell" as the population gets older, said the report.

When the building industry started to recover in 1996, it drew workers largely from the unemployed ranks and from veteran workers who had left the industry during the early ’90s, said the council.

"By 2000 this source had been exhausted" while the economy continued to grow, leading to what the council said is a crisis situation today.

Key trades in demand include boilermakers, construction managers and supervisors, millwrights, crane and heavy equipment operators, insulators and ironworkers, said the council.

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