PCG: Positive Progress?

Some interesting news out of Pacific Corporate Group, which today said that David Fann would serve as president and CEO of the PCG Asset Management spinout.

No, the announcement itself isn’t terribly interesting, but rather some background info provided by Fann himself (via a spokesman). Specifically, he addressed two issues raised previously in this space: (1) How much of PCG AM do the employees currently own? (2) Since Chris Bower still owns a significant majority stake, won’t PCG AM face the same control conflicts that led to so much personnel turnover at PCG?

For the first question, Fann says that PCG AM employees (including himself) currently hold a combined 25% stake, with the ability to vest an additional 25% over the next “few years.” So, when all is said and done, it’s likely that Bower would own half and firm employees would own half. That’s basically what we expected.

But his answer to the second question is more surprising, and more hopeful for future stability. He says that while Bower is majority shareholder, he has agreed to adopt a governance standard that requires board approval on all issues related to day-to-day management, including staffing, compensation, strategy and budgeting. Bower is only one of four PCG AM board members, so apparently cannot unilaterally decide anything.

If you’re thinking: “Wait, aren’t most of the other board members Bower pals?” Well, at least one or two are – but you couldn’t reasonably expect him to bring in total strangers or enemies. I may well regret saying this later, but the PCG AM spinout might actually work without too much turbulence.