Usually, when a chief executive of note retires after an extended tenure, the valedictories talk about corporate growth. Think, for example, of Mick the Miner turning a $500m coal asset called Xstrata into a global miner worth $50bn or more. Or Chris Gent producing similar magic in the field of mobile telecoms at Vodafone.
What’s rarely mentioned is the amount of stock issued in the process; rather than executive graft, the growth in size typically reflects equity financing of acquisitions. Xstrata investors never saw a 100-fold increase in their investment; at Vodafone, investors are still nursing burnt fingers from backing Gent’s extraordinary land grab. Read more