Knowledge at Wharton

Last week the Obama administration’s ”pay czar ” Kenneth Feinberg announced that the government will impose caps on compensation for the 25 highest-paid executives at seven companies that received ”exceptional assistance” through the Troubled Asset Relief Program -- including American International Group (AIG) Bank of America Citigroup Chrysler Chrysler Financial General Motors and GMAC. Under the new regulations salaries will be reduced by an average of 90% and total compensation (including bonuses and stock options) will be lowered by 50%. Knowledge at Wharton spoke with Wharton accounting professor Wayne R. Guay and then with finance professor Alex Edmans about what these changes could mean for Wall Street company shareholders and taxpayers. Hosted on Acast. See acast.com/privacy for more information.

Microsoft dipped its toe into retail waters this month by opening its first company store as a way to showcase the latest and greatest in PCs Zunes and Xbox consoles. But computer companies aren’t the only manufacturers moving into the retail space says Wharton marketing professor David Bell. Whether it’s handbags from Coach shoes from Nike or suits from Ralph Lauren consumers increasingly have the choice to buy products either at stores operated by manufacturers or from independent retailers. Bell recently co-authored a research paper looking into competition between company stores and independent retailers in the same market. Hosted on Acast. See acast.com/privacy for more information.

James Riady is the CEO of Lippo Group one of Indonesia’s largest conglomerates with annual revenues of some $3 billion. The Group among the most active property developers in Southeast Asia has expanded into China and Hong Kong and plans to invest $10 billion over the next five years in the Asia Pacific region. It also has interests in media telecommunications retail and health care. Fifteen years ago Riady was responsible for the establishment of Universitas Pelita Harapan in Indonesia and he has a strong interest in the social impact of business. During an interview with Knowledge at Wharton Riady explained the lessons he has learned over the years from successes and failures in business and politics. Hosted on Acast. See acast.com/privacy for more information.

In a year when DVD sales are falling and studios are facing major shakeups in their executive ranks the movie industry has at least one success story to cheer about: Netflix. Despite the recession the Los Gatos Calif.-based company continues to thrive and is now in a race to transition to a business model focused on streaming content online while continuing to exploit its current model based on physical DVD distribution. According to Wharton faculty Netflix has managed this balancing act deftly so far but growing competition in digital distribution means that it may not have an advantage for long. Hosted on Acast. See acast.com/privacy for more information.

Five years ago C.K. Prahalad published a book titled The Fortune at the Bottom of the Pyramid in which he argues that multinational companies not only can make money selling to the world’s poorest but also that undertaking such efforts is necessary as a way to close the growing gap between rich and poor countries. Key to his argument for targeting the world’s poorest is the sheer size of that market -- an estimated four billion people. How has Prahalad’s book -- a revised fifth-anniversary edition of which has just been published -- affected the behavior of companies and the well-being of consumers in the years since its publication? Knowledge at Wharton checked in with the author for an update including examples of specific companies that are implementing Bottom of the Pyramid strategies. Hosted on Acast. See acast.com/privacy for more information.

Philadelphia-based Comcast the largest cable company in the U.S. has made a bid to merge its operations with NBC Universal -- home to the NBC television network Universal Studios and popular cable channels including Bravo USA CNBC and MSNBC. If the deal goes through it would create a programming giant allowing Comcast to produce and distribute content throughout its cable networks and on web sites such as Hulu which is partially owned by NBC Universal. Steve Ennen managing director of the Wharton Interactive Media Initiative spoke with Wharton marketing professor Pete Fader and Ken Shropshire professor of legal studies and business ethics about what the deal could mean for content distribution and for consumers. Hosted on Acast. See acast.com/privacy for more information.

According to some estimates high-frequency trading by investment banks hedge funds and other players accounts for 60% to 70% of all trades in U.S. stocks explaining the enormous increase in trading volume over the past few years. But critics of the practice worry that those profits are coming out of ordinary investors’ pockets. Defenders on the other hand say high-frequency trading improves market liquidity helping to insure there is always a buyer or seller available when one wants to trade. Wharton faculty and others weigh in. Hosted on Acast. See acast.com/privacy for more information.

Unlike micro lending -- the better-known side of micro finance -- micro insurance has been a hard sell among the world’s poor. The reasons why include a lack of understanding of how insurance products work a general reticence on the part of poor populations to part with their meager financial resources badly designed products and a shortage of localized risk management knowledge among providers. What needs to happen for micro insurance to prove that it can be both socially beneficial and economically viable? Hosted on Acast. See acast.com/privacy for more information.

Federal Communications Commission chairman Julius Genachowski in late September outlined principles of net neutrality to promote more open use of the Internet. What will these developments mean for business in the U.S. and other parts of the world? In a new interview format called Five Questions Rajesh Jain CEO of India-based Netcore asks Wharton legal studies and business ethics professor Kevin Werbach about net neutrality. In the second part of the interview roles are reversed and Werbach poses five questions to Jain about opportunities in the Indian mobile market which is going through explosive growth. Hosted on Acast. See acast.com/privacy for more information.

On September 14 President Barack Obama gave a speech in New York to mark the anniversary of the Lehman Brothers failure. It was a year ago when -- during the course of a single jaw-dropping week -- the investment bank declared bankruptcy; Bank of America took over Merrill Lynch; and the U.S. federal government bailed out American International Group. How has Wall Street changed during the past year and what will these changes mean for investors? What new financial regulations have been discussed and how much longer will it take the U.S. economy to emerge from the woods? Knowledge at Wharton posed these and other questions to finance professors Jeremy Siegel and Richard Herring. Hosted on Acast. See acast.com/privacy for more information.