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One option is to conduct a reverse split if a company doesn't receive an extension. Since 2005, 264 NASDAQ companies have completed a reverse split for one reason or another. The results of this action have been mixed. 

Perhaps there may be an alternative sooner than we think.  Next year NASDAQ will launch the NASDAQ BX Venture Market. This new exchange was recently approved by the SEC and will provide companies with a national listing above a standard OTC quotation.

Following are highlights from a recent conversation with NASDAQ's director of listings about the new BX Venture Market:

• Eligibility for the market requires a company to meet a number of quantitative standards including a $0.25 per share requirement for securities that were previously listed on a national exchange;
• $1 per share requirement for companies not previously on a national exchange;
• Companies must know if the move will impact investors ability to continue to own shares;
• Securities will need to meet the initial listing requirement of $4 to relist on the NASDAQ Capital Marke

While the BX Venture Market may be a viable solution, nothing beats operational performance.  However, this new market can be a good platform for companies as they reestablish their footing in today's economy. 

-- Matt Sheldon, msheldon@pondel.com

Most of us want to work for a boss that is kind and fair.  Paradoxically, however, when looking for a leader we also equate kindness with weakness, and selfish aggressive behavior with strength, according to a recent study conducted by researchers at the Kellogg School of Management, Stanford Graduate School of Business and Carnegie Mellon University's Tepper School of Business. 

The study said that being selfish makes "you seem more dominant and being dominant makes you seem more attractive as a leader."  And, "people who are generous or altruistic can appear weak or gullible."

This is an explanation, at least in part, of why we get corruption.  People who are more likely to be moral, kind and pro-social are least likely to be elected to leadership roles, and the likelihood of corruption and malfeasance increases because we have the wrong people in positions of leadership.

Indeed, these findings on how we perceive dominance and weakness (when it comes to leadership) are likely what is behind the frustration and anger of the "Occupy Wall Street" protesters.  The news of outrageous salaries and bonuses for CEOs and the government using taxpayer money to bailout big banks is all too familiar, while many average citizens cannot find work or have to work more for less pay. 

Joe Dear, chief investment officer of California Public Employees' Retirement System, said recently that people are waking up to the fact that the game appears to be rigged. A helpful first step for fairing up the game may be to begin viewing kindness, fairness and altruism as strengths in business leaders, and selfish behavior as reason to look for a new CEO.

-- Robert Jaffe, rjaffe@pondel.com

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I recently read that a U.S. District court in Manhattan threw out a motion to dismiss a case in which Swatch Group accused Bloomberg of improperly recording a February 2011 earnings conference call and providing a transcript of that call to Bloomberg users. 

Since I'm not a lawyer by trade, I won't argue whether the judge was justified in his decision based on copyright law.  However, as an investor relations professional with nearly two decades of experience, I will argue the validity of Bloomberg's belief that "... if a public company discloses financial performance information to a select group of analysts, that company has a responsibility to be transparent and provide that information to everyone."

Cursory research did not turn up a copy of the transcript in question on either StreetEvents or Seeking Alpha, so I have to assume that Swatch Group chooses not to make its conference calls available to the investing public (although they do provide substantial detail about the numbers on their website).  In fairness, I don't know how Swatch notifies investors of its earnings calls, and maybe they are more forthcoming than I believe them to be, but it seems to me that every public company has a fiduciary responsibility to update everyone, from the largest institutional investor to the smallest shareholder on Main Street, at the same time.  Perhaps it's time for Swatch to rethink its disclosure policies.

-- Laurie Berman, lberman@pondel.com

Once again, Silicon Valley is humming.  Tech IPOs are hot, hot, hot.  Household names like LinkedIn, Pandora and Zynga, just to name a few, have recently gone public or have plans to do so, with many others awaiting their debut (think Groupon and Facebook).  It reminds me (and others, I'm sure) of the late 1990s/early 2000s when technology/Internet companies were going public at an alarming rate, without the revenues or profits to back up lofty valuations.  Fortune says there will be more than 50 tech IPOs before the end of 2011 and that proceeds so far from this year's IPOs -- $12 billion -- have far eclipsed last year's total.  A recent guest blogger on CNBC states that, "there is a familiar sense of déjà vu.  In some ways, it's the year 2000 once again in the IPO world."

Should we be scared that optimism has again returned to the Valley?  The Fortune article asserts that "the consensus is that there remains sufficient fear in the marketplace -- be it on Sand Hill Road or Wall Street -- to prevent exuberance from becoming totally irrational."  Maha Ibrahim, a general partner at a Silicon Valley-based VC firm, says, however, "that bubbles can be very positive, and this one is needed to kick start a long-sputtering economy."  Are we really in the midst of another tech bubble, though?  According to Business Insider, the current environment "doesn't seem very bubblicious." 

Hopefully we've learned from past mistakes, but in my opinion, if recent activity helps drive the economy, than call it whatever you'd like.  After all, a bubble by any other name (to borrow slightly from Shakespeare)...is still a bubble. 

-- Laurie Berman, lberman@pondel.com

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A sound piece of stock market advice counsels to invest in such a way that you can sleep like a baby, which is exactly how one money manager sleeps - he wakes up every two hours and cries. 

That anecdote was among the lighter moments from this year's Orange County Public Company Forum, where more than 200 business leaders heard perspectives on the market from NASDAQ Chief Economist Frank Hatheway, as well as thoughts from a panel that included a vice chairman of Bank of America Merrill Lynch, two public company CEOs, a hedge fund chief investment officer and a partner in the corporate and capital markets practice of an international law firm.

First, the economy, according to Dr. Hatheway:  "Things are not so bad, which is very good news, particularly in light of recent fears that the economy was on the precipice of a second recession."  Hatheway said the "outlook for the U.S. is improving, albeit slowly and unevenly."  He noted that industrial production has been steadily rising since mid-2009, although he also expects to see interest rates rise modestly and continued weakness in the dollar. 

And second, the consensus on the stock market was similar to that of the economy:  The entire panel expects the markets to continue to improve during the next 12 months, with predictions that ranged from 3% to 10% growth.  Looking out even further, Cary Thompson, vice chairman of Bank of America Merrill Lynch, said he expects 3-5% annual growth for the next five to seven years.  Thompson also noted that the deals thus far in 2011 have been significantly larger than in 2010.

Given the choppiness of the expected growth, you may want to heed another piece of advice:  Don't watch the stock market every minute of the day, and take it slow and steady for a good night's sleep. 

The annual event, now in its 14^th year, was sponsored, in part, by PondelWilkinson, along with NASDAQ OMX; Paul Hastings; Bank of America Merrill Lynch; Deloitte; R R Donnelley; Woodruff Sawyer; NIRI Orange County; Mackenzie Partners; and the Forum for Corporate Directors.

-- Robert Jaffe, rjaffe@pondel.com

With annual reports complete and 10Ks filed, a number of companies are now in the midst of planning an investor day.  A successful investor day begins with diligent planning - and there are myriad details to consider beginning with the date, time and location.

During a recent call with a client, investor day woes were expressed about New York rush hour traffic and the dress code of a particular venue. So here is my question: Where do you think the best place is to hold an investor day?  Please let us know through our Facebook poll.

-- Matt Sheldon, msheldon@pondel.com

Hey friends of PondelWilkinson, let's keep this one to ourselves: Voice analysis may become the next tool, and a good one, for predicting stock prices. Two professors from Duke think they have proved it.

They learned that if you listen very carefully to subtle emotional cues in a CEO's or CFO's voice on a conference call, you may be able to forecast, not an EPS estimate, but a company's future stock performance.

Using a digital voice emotion software program made by privately held Israeli company Nemesysco Ltd., Profs William Mayew and Mohan Venkatachalam (yes, I checked the spelling twice) analyzed voice inflections from 1,647 typical quarterly conference calls hosted by 671 public companies. 

The study monitored subtle and not so subtle vocal cues that showed either positive or negative emotional states.  They then checked the companies' performances to learn whether earnings, stock prices or analysts' recommendations corresponded with the cues over the next six months.

Voila!  When the execs were excited, the stocks responded favorably and earnings were on the rise. But the more negative the intonations, the lower the stock prices went. According to the study, which was published in the Journal of Finance, performance was most pronounced in either direction when there were questions posed on calls, making it easier for the software program to detect the cues.

Where can you buy the software package and how much does it cost? Sorry, you'll have to research that for yourself.  If it's not too expensive, please let me know.

I guess we just have to hope that the executives on those conference calls really are feeling what they are saying, lest we must heed the words of American poet William Carlos Williams, who wrote: "It's not what you say that matters, but the manner in which you say it."

-- Roger Pondel, rpondel@pondel.com

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With myriad information and opinions hitting the papers and Internet every day about the ins and outs of "Say on Pay," it seems helpful to summarize the most pressing issues and commentary (and a short summary this will not be).

The SEC adopted formal Say on Pay rules about a month ago, as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act.  Companies must conduct an initial vote on Say on Pay at their first regular meeting of shareholders occurring on or after January 21, 2011 (even if a company's proxy statement was filed prior to January 21).  Companies whose public investors hold less than $75 million of its outstanding shares are not required to hold such a vote until 2013. It's important to note that the votes are advisory and not binding onto themselves.

In its most basic form, Say on Pay requires U.S. public companies to provide shareholders with the right to cast three types of advisory votes:

• Say on Pay: To approve the compensation of named executive officers;
• Frequency (a current hot button among public companies and their investors): To determine the frequency with which shareholders should be entitled to cast votes on the company's executive compensation;
• Golden Parachute:  To approve certain payments made in connection with an acquisition, merger or other specified corporate transaction.

As of the end of last year, 73 companies with shareholder meetings on or after January 21, 2011 had filed either preliminary or definitive proxy statements.  Do these proxies provide trend information about how Say on Pay will play out?

Latham & Watkins says that 56% of the filed proxy statements have recommended a vote to approve compensation every three years; 23% have recommended annual votes; 11% have recommend a vote every two years; and the remaining 10% have not made a recommendation related to frequency.  A Towers Watson survey of 135 U.S. public companies conducted in mid-December showed that 51% expected to hold annual say-on-pay votes; 39% preferred the vote be held every three years; and 10% anticipated holding a vote every two years. 

Law firm Qashu & Schoenthaler LLP reviewed the voting results of 88 companies that had disclosed the results of their Say on Pay frequency votes as of February 22.  While 55% of the directors at these companies recommended a vote every three years and 27% recommended a vote every year, only 29% of shareholders at these companies voiced their preference for vote every three years while 65% preferred every year.  Sheppard Mullin also provides an excellent view into recent voting trends and practices.

My best guess is that investors will continue to press for annual votes, as they seek to gain more influence over how their companies should be run.  Institutional Shareholder Services (ISS) supports this view and has a good FAQ on its compensation policies here.  A recent MarketWatch article noted that the shareholders of Monsanto, Air Products and Chemicals, Jacobs Engineering and Woodward Inc. demonstrated a strong preference for future Say on Pay votes to be held each year, instead of management's preference to hold the vote once every three years.

Towers Watson contends that there is "no single right answer to the question of how frequently these votes should be conducted that will work for every company.  Each company seems to be assessing its own circumstances and needs, taking into account its specific shareholder composition and the degree of potential shareholder concern about the company's executive pay programs."

Towers Watson found that nearly half of those companies surveyed are making "some adjustments to their executive pay-setting process in preparing for the upcoming proxy season."  Those making these changes plan to devote more attention to explaining their programs, performing additional analyses on the link between executive pay and company performance, and/or considering changes to programs such as severance, change-in-control benefits and perks that have high visibility.

Advice from Latham & Watkins says that in preparation for these upcoming votes, companies may want poll their significant shareholders about desired frequency of Say on Pay votes.  In fact, a recent Harvard Law School Forum on Corporate Governance and Financial Regulation informed   that a group of institutional investors led by Walden Asset Management and representing more than $2.0 trillion in assets under management, has asked some companies to host an annual conference call specifically for institutional investors to focus on corporate governance discussions in the proxy statement. Whoa.

When deciding what is best for your company and its shareholders, consider the results of past votes on equity plans and director elections to determine the level of shareholder satisfaction on past executive compensation matters.  It's also a good idea to understand the voting guidelines of proxy advisors, such as ISS and Glass, Lewis, as well as your largest institutional shareholders. 

Open and ongoing dialog is key to maintaining a best-in-class investor relations program, and whether it be Say on Pay or other issues facing your company, communicating honestly is the best recipe for success.  Let us know how your company is thinking about Say on Pay.

-- Laurie Berman, lberman@pondel.com

Remember that phrase, It's the economy, stupid?  It's a memorable slogan that emerged during Bill Clinton's successful first run for presidency in 1992. Ever since then, but particularly in the last few meltdown years, everyone's talking about it--the economy, that is. 

The folks who attended the Tatum networking breakfast meeting this week, yours truly included, were no exception. 

Two and three years ago, it was economic blame for performance woes; at this very same breakfast one year ago, the kvetching gave way to such clichéd rhetoric as hunkering down, blocking and tackling, more aggressive marketing and sales, and of course, slashing overhead.  Alas, while the economy was still the topic de jour at this week's meeting, the accompanying language was different:  not quite ready to breathe a sigh of relief, but almost there; finally seeing signs of life; getting inquiries on some pretty good engagements;  this should actually be a better year.

Spewing those and similar positive utterances was an investment banker specializing in M&A, several auditors, a D&O insurance broker, a management consultant, and others who principally serve middle market companies. In all, there were about 20 folks at the meeting, all similarly positive, with the exception of one--a lawyer specializing in restructuring and bankruptcies, who, because of the unemployment situation, believes the current euphoric feeling is temporary at best and feels we are in for a double dip.  How the world has changed.

I, for one, would, of course, like to believe the majority.  After all, we, too, are starting to feel a little better. But the question remains, could that one lone dissenter be right?  Perhaps he is just trying to be hopeful, since in his specialty, bad economic times usually signal good business. And are the others truly feeling that their businesses are better, or are they in so much pain that they are being hopeful as well? 

Our client, Steve Borick, CEO of Superior Industries, which manufactures wheels for most of the major auto makers, attended the auto show this week in Detroit. He said the mood was clearly up for this bellwether industry.  But he asked, who do you really believe?

As 2011 gets underway, it looks like things are getting better, especially if we believe the majority.  And perhaps if we will it, it will indeed come.  We just have to wait a little while longer and see what Q1 brings.

-- Roger Pondel, rpondel@pondel.com

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Remember those enticing print advertisements from stock brokerages (today called financial advisory firms) and mutual funds (still called mutual funds) in the mid-2000s, when the market was recovering from the dot-com bust and the world seemed better? 

In case you haven't noticed, the ads are back. 

Who woulda thunk they'd return so soon in the Great Recession's early wake?  And why on earth do the advertisers think their words of wisdom and comfort will entice new customers?  Hey, the world isn't quite better yet, anyway.

Last weekend, as I caught up on some old-fashioned newspaper reading, I couldn't help notice some of those ads.  Don't laugh too hard, but without mentioning any names, see if you get comfort from, or believe the words in any of these beauts:

"...we employ a thoroughness that inserts discipline into a potentially emotional situation."  Discipline is a great idea.

"...everything we do is unflinchingly client focused."  Unflinchingly? Is that even a word?

"...it's time a financial advisor took into account your complete financial situation."  I'll say it's time!

"...getting you to your dreams requires a more personal approach."  Whatever happened to sleeping pills?

"...building a relationship makes the difference."  What a notion!

"...we offer vision."  Ophthalmologists R Us.

"...we offer our mutual funds at cost."  What cost is that?

"...it's no secret that accumulating wealth today is more difficult than ever."  And I thought that was a secret!

"...the ultimate goal of new money is to become old money."  Better than lost money.

"...the trick is to learn from the past without getting stuck in it."  Sounds like an oil spill in the Gulf.

"...when you pay less, you can keep more."  And tell me, what does this have to do with investment returns?

"...past performance cannot guarantee future results."  Let's hope not!

"...everything shapes the future of your investments."   Everything?

"...the truth is that the financial world has fundamentally changed."  Good this firm is telling the truth.

"...in these changing economic times, some things never change."  Amen.

-- Roger Pondel, rpondel@pondel.com