Sid Cato -- July 2005 Quiz Answers

(Answers for July 2005)

1. You tout your annual conference as big time, but if that's true, then why don't (1) more big-timers attend (like VPs), and (2) more folks come back for—well, more?
Answer: To a degree, perhaps/somewhat. Through the years, top management has tended to attend first, then send staff henceforth, which makes sense. Besides, we have loads of repeat-attendees.

2. Your protestations to the contrary, aren't the reports getting prime attention those produced by subscribers to your newsletter? True or false?
Answer: You decide. Of the two dozen (so far) to hit the heights—that is, score at least 100 of a potential 135 points—I checked and one in four or five isn't a current subscriber. Worse yet, one of the year-ago panelists, a good friend and officer of Lear Corp., is responsible for an annual I just discovered scored but 50 of a potential 135 points. Its Cato Positive Index? 2.8% vs. 14.0% among 2004 books overall.

3. Your opposition to the legalistic Form 10-K is well known, but haven't some companies found a way around your objections? True or false?
Answer: True, sort of. Colleague Mike Klodnicki has encouraged companies from East Coast to West (Constellation Energy to Safeco) to incorporate their 10-Ks into the book, but in an expansive, progressive manner. (Sort of the "if you can't beat-'em, join-'em" approach.)

4. Last month, you admitted to being paid to advise on one annual report but that you overlooked that design hadn't actually been extended throughout the entire book. So you do make mistakes, even if you never own up to them. True or false?
Answer: Strangely enough, I did own up to missing the fact that Tellabs' design didn't extend to the financials—but producer of its report corrected my misconception, said expansion of the financials necessitated removing applicable graphic elements necessary for credit for design throughout. So I do own up to my shortcomings, even—in this instance—where I'm not to blame.

5. When a report displeases you, you take it out on the producers. But isn't it the fault, actually, of corporate management? True or false?
Answer: True, pretty much—though the producer hopefully will gain clout and his or her opinions will influence the CEO and others.

6. Key feature of an annual report is the shareholder letter. True or false?
Answer: False. I insist the most important feature is a report cover. Which must demand the recipient become reader. Shareholder letters of course are of prime importance (the CEO loves 'em) —but, first, you've got to get the book opened, and perused, at least.

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	1.	You tout your annual conference as big time, but if that's true, then why don't (1) more big-timers attend (like VPs), and (2) more folks come back for—well, more? *Answer:* To a degree, perhaps/somewhat. Through the years, top management has tended to attend first, then send staff henceforth, which makes sense. Besides, we have loads of repeat-attendees.

	2.	Your protestations to the contrary, aren't the reports getting prime attention those produced by subscribers to your newsletter? True or false? *Answer:* You decide. Of the two dozen (so far) to hit the heights—that is, score at least 100 of a potential 135 points—I checked and one in four or five isn't a current subscriber. Worse yet, one of the year-ago panelists, a good friend and officer of Lear Corp., is responsible for an annual I just discovered scored but 50 of a potential 135 points. Its Cato Positive Index? 2.8% vs. 14.0% among 2004 books overall.

	3.	Your opposition to the legalistic Form 10-K is well known, but haven't some companies found a way around your objections? True or false? *Answer:* True, sort of. Colleague Mike Klodnicki has encouraged companies from East Coast to West (Constellation Energy to Safeco) to incorporate their 10-Ks into the book, but in an expansive, progressive manner. (Sort of the "if you can't beat-'em, join-'em" approach.)

	4.	Last month, you admitted to being paid to advise on one annual report but that you overlooked that design hadn't actually been extended throughout the entire book. So you do make mistakes, even if you never own up to them. True or false? *Answer:* Strangely enough, I did own up to missing the fact that Tellabs' design didn't extend to the financials—but producer of its report corrected my misconception, said expansion of the financials necessitated removing applicable graphic elements necessary for credit for design throughout. So I do own up to my shortcomings, even—in this instance—where I'm not to blame.

	5.	When a report displeases you, you take it out on the producers. But isn't it the fault, actually, of corporate management? True or false? *Answer:* True, pretty much—though the producer hopefully will gain clout and his or her opinions will influence the CEO and others.

	6.	Key feature of an annual report is the shareholder letter. True or false? *Answer:* False. I insist the most important feature is a report cover. Which must demand the recipient become reader. Shareholder letters of course are of prime importance (the CEO loves 'em) —but, first, you've got to get the book opened, and perused, at least.