The boards of Australia’s biggest listed companies are trying
revising the employment contracts of chief executives and senior managers to
cut back on large termination payments, says the lead story of the Financial Review (not online). While the CEOs of the
top 50 companies are still in line for so-called golden parachutes totalling
$186 million, new contracts and revised agreements on termination are limiting
entitlements to 12 months base salary – down from 18 or 24 months a few years
ago.

Amcor’s new boss Ken MacKenzie may have breathed a sigh of
relief when controversy over cardboard box price-fixing allegations died down
over Christmas, but in the New Year investor attention is turning to the
fundamental problems affecting the packaging group’s immediate outlook, says Anthony
Hughes in the Fin‘s Due Diligence. Amcor
is the world’s biggest producer of PET packaging products, like plastic bottles
and jars, but rising input costs and an inability to pass them on to all its
big customers continues to squeeze profits. Meanwhile, shares have dropped about
7% in the past few weeks on the view MacKenzie’s planned turnaround could take
a lot longer than expected. And with energy prices still strong, the full
extent of the pain may lie ahead, says Hughes.

The Australian share market will be bracing itself for a
precipitous fall today after Wall Street had its worst day in three years last
Friday, reportsThe Australian.
The Dow Jones Industrial Index plunged 213 points after US
corporate giants Citigroup and General Electric issued disappointing results
and the oil price rallied past $US68 a barrel. The Australian market is
expected to give up 50 points or more, as a result.

Some time in the next eight or nine weeks, Finance Minister
Nick Minchin – or whoever might replace him in the imminent cabinet reshuffle
– must decide whether to proceed with a total or partial sale of
the Australian taxpayers 51.8% share in Telstra, says Michael Sainsbury in The Australian. It’s not going to
be easy. It’s a matter of whether it decides to sell the
lot or simply have a partial sell-down and place the rest into the Future Fund.
But even that option is fraught with risk. The global telecommunications sector
remains in incredible flux and there is no guarantee that Telstra shares will
ever rise back to the Government’s target level of $4.50.

While the law is theoretically open to all, the reality is that
justice is a costly, tortuous business, says Michael West in The Australian.
And business
treats it as business – claims and counter-claims ensure Joe Bloggs
has little
hope in the courts against the big end of town. Enter John Walker. As
managing
director of IMF Australia, the softly spoken lawyer and insolvency
specialist has taken on Big Tobacco, the insurance companies and even
Chris
Corrigan’s Patrick Corporation, and won. Walker
says: we’ll take on your claim, take the risk, finance it, do the
strategy and
marketing. And if we win, we take a third of the pot. Which is
precisely what
he’s doing now for shareholders of pokies giant Aristocrat and
aged-care group
Village Life, and for creditors of collapsed gold company Sons of
Gwalia,
creditors of Ion, Pan Pharmaceuticals, property developer Westpoint and
gold miner
Allstate Explorations.

Having survived 138 years, two World Wars, the depression of
the 1890s and the Great Depression, countless changes to men’s fashion and
everything from SARS to the introduction of unfriendly train timetables that
kept customers away, the iconic Sydney department store Gowings will be gone
after this Sunday, says Michael Evans in The Sydney Morning Herald.

Counter-cyclical share investors always believe the logic of
buying low and selling high is on their side but, says Malcolm Maiden in his latest “Dogstar” survey in The
Smage – “sometimes shares are low and high for very good reasons.”

Meanwhile, it’s going to be fascinating to watch the hedge
funds in 2006, says Maiden.
According to estimates, they account for as much as 50% of the trading volume
on Wall Street in any given day. And they’ve reached this lofty perch by flogging
a simple concept called Alpha. Traditional fund managers shape their portfolios
to track the sharemarket itself, more or less. They are chasing Beta, the
return the market as whole throws off. Hedge funds, on the other hand, claim to be able to capture
absolute above-market returns and charge very high fees for doing so.

Toll’s struggle to get Patrick highlights the fact that much
of the transport business is dominated by iconoclastic entrepreneurs who either
started or largely built the companies they head, say Rod Myer and Larry
Schwartz in The Age. Not only Paul Little and
Chris Corrigan fit into this category, so do many of the smaller operators
Graeme Samuel moved to protect when he said he feared a merged Toll-Patrick
“could be used to discriminate against or foreclose rival transport and
logistics providers”.