* GMI spokesman says NY firm puts new focus on revenue
* Hodgson: move is "just business"
By Ross Kerber
Dec 17 GMI Ratings is dropping widely followed
governance expert Paul Hodgson as the research firm seeks to
boost revenue in the competitive field.
Hodgson, 50, had been GMI's chief research analyst and
helped build up the firm from its obscure roots in Maine to an
influential voice in New York with deep dives into financial
filings and a no-holds-barred blogging voice.
But lately the company has focused on boosting its sales of
higher-priced services like GMI Analyst, a web-based product
used to judge risk in public companies.
"In terms of the resources we have and how we're using them,
we want to use the capital we have to drive more robust revenue
growth," said Lev Janashvili, GMI's marketing director, in an
Hodgson said in a separate interview that his termination
"was connected to their need to cut expenses" but said he did
not know more details.
While it may be ironic that someone often critical of
corporate spending should be let go as a cost-saving measure,
Hodgson said he regards GMI's action as "just business."
"There's no rancor on either side, so describing the
separation as amicable is true - though it does leave me without
a job, which is unfortunate," Hodgson said.
Hodgson said he plans to stay in Maine while exploring other
In 2001 Hodgson had joined a predecessor firm of GMI known
as The Corporate Library, one of several companies that combined
in 2010. The Corporate Library was founded by Nell Minow and
Robert Monks who had built their own resumes as influential
shareholder activists. They remain directors of closely held
But in recent years Hodgson became known as a voice of the
firm through its widely followed reports and blog posts.
Among other things he awarded "Golden Hellos" to new
executives hired with stock options that vested on short
schedules, and zeroed in on hot issues like whether to separate
the jobs of chief executive and chairman at public companies.
There is "no balance of power" in boardrooms when the roles are
combined, he wrote in a report in June.
The reviews reflected rising scrutiny of corporate
practices. In return companies and trade groups like the U.S.
Chamber of Commerce have begun to focus criticism on their
reviewers, though much of this has centered on other firms like
MSCI Inc governance unit ISS and Glass, Lewis & Co.
GMI's Janashvili said despite Hodgson's departure the
company is not under cost pressures in general. It does not
disclose financial details but he said GMI has about 55
employees now and has hired about six since he joined the firm
in the spring.
Hodgson's critical voice did not lead to his departure,
Janashvili said, and he said other GMI analysts will keep the
same critical tone. The idea GMI wanted to tone itself down
"would be very easy to rebut," he said.