Corporate Governance

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National pride probably saved media mogul Jean-Marie Messier's skin, but the embattled CEO of Vivendi Universal must walk a managerial tightrope if he hopes to keep his job. A majority of fellow French board members backed the besieged chairman, while North Americans, mainly representatives of the Bronfman family who had sold Seagram — and its Universal Studios and Music — to Vivendi, voted to oust Messier in a tense meeting last week. The boardroom revolt reflected market alarm over Vivendi's share slide — down 65% since January — and concern with the group's staggering €19 billion debt. The once media-friendly Messier had compounded apprehensions by going silent in the face of growing criticism, fueling fear among investors that he had neither a plan to reverse the stock drop nor a strategy to pull the diversified group together. The jitters even reached the Vivendi board. LVMH magnate and personal Messier friend Bernard Arnault quit the group just hours before it last met. His defection was the fifth at Vivendi since April, with motives ranging from complaints about Messier's refusal to share authority to concerns that a meltdown of the group would scuttle the careers of those leading it at the moment of implosion. Despite Messier's near-miss, many observers expect he'll survive if he can reassure the markets. Last week he began the first in a series of conference calls with financial analysts. He was upbeat. — BRUCE CRUMLEY

FASHION
Hot Summer Trend: IPO Madness
Even before the prospectus was out, executives at Burberry knew it held some eyebrow-raising news: their chief executive would be guaranteed a $15 million payout after three years, no matter how the stock fared. The bonanza makes the CEO, Rose Marie Bravo, Britain's best-paid female executive. The press reacted as expected, clucking over the largesse, but luxury-goods analysts had a different take. "I think she's underpaid," said one. Indeed, with big companies like the Gap actively looking for a CEO, even $15 million isn't a guarantee of security. "Gap could offer that as a signing bonus," said the analyst. Three days after issue, the prospectus set off another debate in the luxury goods universe. By pricing shares relatively cheaply at $3.45 to $4.35 (giving Burberry a post-IPO value of from $1.75 billion to $2.2 billion), analysts say it may have undercut the plans of Prada Group, the summer's other eagerly anticipated IPO. Prada, claiming the weak market would leave the company undervalued, postponed its offering for the third time. — LAUREN GOLDSTEIN

THE BOURSE
Roche's little helper
Drug giant Roche won shareholder approval for its $1.4 billion takeover of Japan's Chugai. The Swiss company's 50.1% stake will make it fourth in Japan's lucrative market.

Pride cometh before ...
Despite predicting it would buck the trend, Alcatel saw its shares plunge over 16% after the French telecom-equipment maker said it would cut 10,000 more jobs and fail to turn an operating profit this year.

Fortress MicroSoft
The software giant is teaming up with Intel to create computers with a virtual vault to store sensitive information. The ambitious technology is at least 18 months away.

On to greener pastures
Blaming the strong pound, AGCO is closing its Massey Ferguson tractor factory in Coventry, England. The plant, which made warplanes in World War II, will lose 1,200 jobs.

INDICATORS
The grapes of wrath
The famed French wine region of Beaujolais is swallowing a lot of sour grapes. To counteract a global wine glut, producers will destroy 10 million liters of unsold wine by turning it into vinegar, alcohol or simply dumping it, while agreeing to limit future production.

Bringing it on home
For the first time since communism ended, more money is entering Russia than leaving. The increase in investment and decrease in capital flight, which may have reached $17 billion last year, were good signs for Russia, which was also chosen last week to host the G-8 summit in 2006.

Good case for a peel
Ending decades of discrimination against excessively curved bananas and cucumbers, England's highest court ruled that many E.U. restrictions on the size, shape, and quality of produce were unenforceable.

India looks outside
India's need for investment can be read in the tea leaves, and the rest of the tea industry, which is finally open to foreign ownership. Foreigners can also buy 26% stakes in newspapers and 74% in technical journals.

BOTTOM LINES
"The market of securities is very important, as well as promotion of transparency in U.S. business."
Vladimir Putin, Russia's President, advising U.S. President George Bush on business ethics

"You have to consult with everyone twice, but with the French you have to do it three times."
Jose Maria Aznar, Spain's Prime Minister, on setting E.U. economic policy

"Start thinking good thoughts."
John Payne, psychologist at Duke University, counseling patients depressed by the stock market's woes