Training to Be Old

AT 55, Frank Mendizabal has no immediate plan to leave his executive job at the Weyerhaeuser Company. And his finances are in good shape for when he does.

But he is haunted by a statistic he heard at a company retirement planning session last year: Women can expect to live 13 years longer than their mother or their maternal grandmother, and men can expect 11 more years than their father or paternal grandfather.

Mr. Mendizabal said he still intended to spend his first postretirement years shuttling between Canadian ski slopes and Spain. But Mr. Mendizabal, who enjoys running the occasional charity auction at Weyerhaeuser, is already checking into the market for part-time auctioneers. “I now realize that after a year or so of travel and being a ski bum, I better have something else to do,” he said. “So I’m going to sense the waters early, and build on a skill I have and enjoy.”

Geriatric specialists wish that more people had that attitude. Too often, they say, people equate retirement planning with 401(k)s and mutual funds. While financial planning is important, there are also psychological and physical implications to retirement preparation. With longer life expectancy, experts say, it has become even more important to train for those aspects of old age.

“We are getting to the point where people’s retirement life stage may be longer than their work life stage,” said Daniel J. Veto, senior vice president of Age Wave, a research group that focuses on aging.

So with the first wave of baby boomers already in their 60s, gerontologists are bracing for a tsunami of disgruntled postretirees who have left the psychic and physical aspects of aging to chance.

“We’re going to have a whole generation of people who are healthy, wealthy and bored,” said Dorothy Cantor, a co-author of “What Do You Want to Do When You Grow Up?”

Or perhaps not so healthy. Regarding the statistic that baby boomers are most likely to live well into their 80s and even beyond, Age Wave says that there is also a 40 percent chance that one half of a 65-year-old couple today will live to be 90. And barring drastic medical breakthroughs, these people will be coping with failing eyes and ears and stiffening joints — with many also suffering dementia and depression.

“While the medical community is good at fixing acute conditions like heart attacks,” Mr. Veto said, “it still doesn’t have the solutions to those chronic conditions that can rob you of satisfaction and joy in old age.” Surveys show that few people want to relocate when they are older, yet many must because their homes are not age-proofed — too many stairs, say, or no wheelchair access — or because they have not built up a social support structure for themselves.

“Because we are living longer, we have to adopt behaviors that will enable us to live independently to the end of those longer life spans,” said Dr. Gary J. Kennedy, who trains geriatric psychiatrists at the Montefiore Medical Center in the Bronx.

Nor are baby boomers certain of how much time they will have to plan. Since Congress struck down mandatory retirement in 1986, many people have chosen to work into their 70s — only to find that when they do finally quit, their friends and, possibly, their spouses have died, their children live far away, and they have no idea how to fill their days. Conversely, corporate restructurings have forced many people into retirement long before they were prepared to write the next chapter of their lives.

“It used to be normative, you worked until 65 and then you retired,” said Adam Davey, an associate professor at Temple University who has studied retirement. “Well, these days, you just can’t expect that kind of seamless transition.”

A result, Dr. Kennedy said, is that “Depression already is a close second to dementia as a major problem for aging adults.”

In a sense, that is no surprise. People lose much more than a paycheck when they retire. They lose a community of like-minded souls, a sense of power and accomplishment and an important line of demarcation between workdays and weekends. They also lose a feeling of personal identity that is difficult to replace late in life.

Nancy K. Schlossberg, author of “Retire Smart, Retire Happy,” remembers meeting with a group of retirees from the World Bank. “What they missed most was the respect they got when they said where they worked,” she said. “When they retired, they lost their tag.”

For long-married couples, of course, the tag of Mr. or Mrs. can partly fill that gap. But, gerontologists say, couples face an even worse minefield if they do not plan retirement early on. They may discover that he wants to travel and she wants to stay home. He wants to spend, she wants to save. He wants to cocoon, she wants to socialize.

Those tugs of war are predicated on both parties remaining mobile and spry, something that cannot be taken for granted. It is less of an issue in cities like New York, where apartments with elevators and public transportation are the norm. But in much of the United States, aging populations are learning whole new ways to get around.

The Transit Authority of River City, which serves the metropolitan area of Louisville, Ky., has begun distributing videos that teach the basics of taking buses, from reading a schedule to how to signal a stop. It is taking a demonstration bus to local nursing homes, AARP chapter meetings and retirement homes, teaching people who have never taken buses before.

“Right now we’re concentrating on older people who can no longer drive, but we hope we’ll soon reach younger people before they have to give up their cars,” said Nina Walfoort, the authority’s director of marketing and planning.

Home can be a minefield, too. Stoves with knobs behind the burners, ovens and dishwashers that require high reaches or deep bends, sunken bathtubs — all may look cool when you’re 50, but can be daunting or even dangerous at 75. “The kitchen and bath of your dreams may be a nightmare when you’re old,” said Elinor Ginzler, director for livable communities at AARP.

That prospect already worries Stephen M. Wasserman, 62. He is planning to widen the bathroom door in his East Hampton weekend house so that a wheelchair can pass. He is also installing a shower chair and a higher toilet seat, and he may put in an elevator or chairlift to replace the steep stairs from his garage to the house. “I’m healthy as a horse now,” Mr. Wasserman, a part-time consultant in Manhattan, said, “but I may need these things when I’m older.”

He may also need good reasons to get up in the morning. Gerontologists say that boredom and a sense of uselessness are still the biggest problems of retirement — but, paradoxically, also the easiest to solve.

“We’re all trained to think of skills as things we develop for the workplace,” said John E. Nelson, a former pension consultant who now writes and teaches about nonfinancial aspects of retirement. “But think of them as strengths, and they open a huge number of opportunities.”

What’s crucial, Mr. Nelson and others say, is to sample opportunities before retirement D-Day. They suggest giving retirement a dry run, trying activities that seem appealing so that if they turn out not to be, there is time for rethinking.

Gail Koch, who owns the executive recruiting firm Comsearch, does not particularly like playing cards, and when her bulldog died two years ago, she took a hiatus from taking care of a pet. But Ms. Koch, who describes herself as “over 45” and nowhere near retirement, is taking bridge lessons and learning about different breeds of dogs.

“I want to be sure I’ll have companionship and a sense of community when I do retire,” Ms. Koch said. For now, she remains partial to bulldogs, and she is not sure she really likes bridge. “But if that doesn’t work out, I have time to learn poker,” she said.

That would be a relatively painless switch. But a change involving relocation, can be more fraught. Ms. Ginzler of AARP said she knew people who moved to golfing communities, and then discovered they missed city culture and really hated golf.

She heartily endorses what a close friend did: the woman, a Maryland resident in her 50s, bought a second home near a bus line in rural West Virginia. If they like the area as much as they suspect they will, they plan to sell the Maryland house when they retire, and spend their time in West Virginia.

People who started retirement planning late can use the Internet to get up to speed.

John Campbell, 79, retired almost two decades ago. But his wife, Amy, 57, continued working until two years ago, and then had to care for her sick father. So until recently, the couple were tethered to their four-story home in Great Neck, N.Y.

But last year, Mrs. Campbell’s father died, just about when her aching knees and her husband’s aging heart were giving them trouble on the stairs. “We looked at each other one day and said, ‘Why are we hanging around this congested metropolitan area when we could be some place beautiful, with fewer sharp elbows?’ ” Mr. Campbell said.

So they did a Google search for “best places to live,” narrowed it to a few cities and visited each. In December, they moved to a condominium in Asheville, N.C.

There is a hospital nearby, and a symphony and a theater. Mrs. Campbell has renewed a hobby, quilting, and is doing volunteer work. “It is the kind of place we can enjoy together now, and that Amy can happily stay in after I’m gone,” Mr. Campbell said.

Or as Mrs. Campbell put it: “I’m already making new friends. And, I expect there will always be a new bunch of younger retirees moving in.”

ENERGY investors are going to have a hard time duplicating their success of the last five years.

The Energy Select Sector SPDR, an exchange-traded fund that tracks a diverse basket of energy stocks, returned 17.7 percent, annualized, in the five years through March, according to Morningstar. But many actively managed mutual funds that invest heavily in energy produced even better gains.

The U.S. Global Investors Global Resources fund produced an annualized return of 37.8 percent over the five years through March. Van Eck Global Hard Assets, RS Global Natural Resources and a few others returned about 25 percent a year, on average.

But, as the fine print warns, past performance does not guarantee future gains. Over the last five years, energy prices have generally soared because of stronger demand from developing countries. Global tensions, natural disasters and rampant speculation have also helped prices to climb.

“The easier money has probably been made,” said Evan Smith, a co-manager of U.S. Global Investors Global Resources.

But Mr. Smith and other energy fund managers said that further gains would most likely come from specific energy stocks, though they may be harder to find. “I don’t think we’ve seen the peak,” he said.

Fred Sturm, manager of the Ivy Global Natural Resources fund, which has climbed 22.3 percent, annualized, over the last half-decade, said there were plenty of opportunities for managers who could find good stocks.

“At some point this sector will be well enough understood and closely and passionately followed so that it will be difficult for experienced managers to add more value,” Mr. Sturm said. “We are not there yet.”

He favors companies that should benefit from the expansion of oil production in the developing world. “Seventy-five percent of incremental energy will be produced by nationalized oil companies” of developing nations, he said.

Much of that oil is offshore, and producing it will require the help of deep-water drillers like two of the portfolio’s holdings, Noble and Diamond Offshore, Mr. Sturm said. “Current share prices do not fully reflect the sustainability of profits for these companies,” he said.

Mr. Smith also favors offshore drillers. He expects that deep-water oil and gas production worldwide will triple by 2010.

“The majors are putting money into deep water,” he said. “There is an increasing allocation in exploration budgets to deep-water drilling.”

Equipment and labor shortages have led to a tripling in rates for some rigs, many of which now rent for $500,000 a day. Mr. Smith holds shares of Noble and Transocean in the fund.

He also likes the long-term prospects of several companies that extract oil trapped in sandy deposits in Canada, mostly in the province of Alberta. Such oil, he said, represented “one of the largest underexploited resources in the world.” At current production rates, he added, Canadian reserves should last for 50 years.

While the costs of extracting from oil sands are high, the rising value of a barrel of oil, along with technology advances, has made such production more lucrative. At $35 to $40 a barrel, producers can earn a 15 percent return on capital, Mr. Smith said. He said he believes that investors will eventually pay more for producers like Suncor Energy and Canadian Oil Sands Trust.

“Over the long run, a premium will be paid for these assets because they are in a politically stable area,” Mr. Smith said.

While some fund managers pick sectors, others look for stocks that fit a profile. Derek van Eck, lead portfolio manager of Van Eck Global Hard Assets, seeks companies that can steadily increase their oil and gas production, a capacity that he termed “increasingly scarce.” Mr. van Eck expects production at XTO Energy and Southwestern Energy, two of the fund’s holdings to swell at double-digit rates.

Mackenzie Davis, a co-manager at RS Global Natural Resources, said he was looking for companies that could “replace their current production at the lowest cost.”

One portfolio holding is Denbury Resources, an oil and gas producer based in Plano, Tex. Denbury specializes in tapping oil from old and abandoned fields.

Investors looking overseas might consider the ING Russia fund, which produced an annualized return of 39.7 percent in the five years through March and has just over 35 percent of its holdings in energy.

The oil and gas reserves of Russian companies are inexpensive, compared with those of Western producers, said Samuel Oubadia, the co-manager. “The reserves of large-cap Russian energy producers are valued at one-half or less those of large energy companies in the developed world,” he said.

POLITICAL risk is one likely reason for the low valuations, but in one case, changing government policies could help investors, he said. Government caps on natural gas prices are likely to be at least partially lifted in the next few years.

“It’s not if, but how soon, and by how much,” Mr. Oubadia said. One major beneficiary would be the giant gas producer Novatek, which represents 3.2 percent of the ING Russia fund’s assets.

Asked if he could produce over the next five years the nearly 40 percent annual returns that ING Russia has had over the last five, Mr. Oubadia replied, “not likely.”

He said if someone had asked five years ago whether the fund would have such large annual gains over the next half-decade, he would have been just as skeptical.

“SUNLIGHT,” remarked the Supreme Court justice Louis D. Brandeis, “is said to be the best of disinfectants.” One problem with too much sunlight, however, can be the blinding glare.

That, in many ways, captures what compensation experts say are positive and negative developments in the newest round of executive pay disclosures. In response to a barrage of criticism that regulators have not kept up with the complexities of swelling pay packages, the Securities and Exchange Commission now requires corporate America to disclose details of executive compensation more fully. As this year’s proxies pour in, they are packed with fresh information aimed at making pay more transparent.

Inclusion of new data, like the value of retirement benefits and potential severance payouts, was supposed to paint a fuller picture of everything that an executive could make. Disclosure of such things as the performance criteria used to award lucrative bonuses was supposed to make the pay-setting process clearer. And the addition of a single headline number that tallied up all the elements of annual compensation was supposed to make different executive pay packages easier to compare. But while all the new disclosure rules have resulted in far more information, analysts say they still do not necessarily offer greater insight.

“It’s like reading through Tolstoy’s ‘War and Peace,’ ” said Lynn E. Turner, a former S.E.C. chief accountant and now a managing director of research at Glass, Lewis & Company, a proxy research firm in San Francisco. “What is missing is a clear, succinct story about how the compensation committee came to the amount they were going to pay.”

Many shareholders say the new proxies require more work, not less, to decipher. Pay consultants say some of the new data is so dizzying that they are not sure how to sift through it; some charts even require another set of charts to interpret them. And a new section in proxies, meant to explain clearly how executives are compensated, is overrun with mind-numbing corporate-speak and legalese.

Even the simplest of questions becomes mired in the disclosure swamp. For example, just how big was the average chief executive’s pay increase in 2006? At most companies, it seems, fuller disclosure has made answering that question a tricky endeavor.

This year, for the first time, corporate filings disclose a single, handy executive compensation figure. But how that figure was calculated differs markedly from how investors arrived at similar ones in previous years — making apples-to-apples comparisons difficult. Despite that problem, it is still clear that bosses enjoyed healthy raises in 2006. The typical chief executive at a big company was paid about $10.1 million, up 9.8 percent from 2005, according to a survey by Equilar Inc., an executive compensation research firm based in San Mateo, Calif. Equilar’s analysis is based on the compensation awarded to chief executives at 150 of the biggest companies, as ranked by revenue. The analysis includes only companies that had filed proxies by the end of March using the new disclosure rules.

Of course, that payday is freighted with lavish exit packages and deferred compensation plans, forms of pay that have never been fully disclosed until this year. Nearly one-third of the executives whose pay was examined for this article can count on pension benefits worth more than $10 million down the road, according to Equilar.

Tighter reporting requirements for perquisites reveal even more extra benefits for being the boss — including “personal health coaching” for Motorola’s top executives; free beer, haircuts and club memberships at Anheuser-Busch; and, at more than 70 percent of the companies examined, personal use of the corporate jet. Facing greater scrutiny, at least a dozen boards, including those at Lockheed Martin and Washington Mutual, eliminated all or some executive perks last year. In many cases, boards then replaced those benefits with cash.

The shape of pay packages is changing, too. With new rules highlighting performance measures, more companies are awarding equity linked to meeting certain goals rather than bestowing stock options or restricted stock, which often pays executives for simply having a pulse. About 40 percent of the typical chief executive’s pay package this year was linked to hitting specific corporate targets.

Even so, some things remain essentially the same. Chief executives in the financial services, oil and health care industries generally landed outsized paydays in 2006, just as they have for years. Ray R. Irani, Occidental Petroleum’s chief executive, had a $52.1 million payday, the largest of anyone on the list of 150 companies that filed under the new rules. But even that amount was overshadowed by what Lloyd C. Blankfein, Goldman Sachs’s chief executive, was paid under the old disclosure system. His $54.3 million pay package made him Wall Street’s highest-paid boss, though he held the top job for less than half the year. Not far behind Mr. Blankfein were the heads of Wall Street’s other big investment banks, where the typical pay package crossed the $40 million mark.

(Of course, those sums are probably a pittance compared with some paydays in the buyout and hedge fund worlds, where compensation remains a private matter.)

Home builders also continued to reap big rewards, even as the American housing market soured. The typical chief executive in the home-building business received total compensation of $22.4 million in 2006, up 2.7 percent from the previous year. Shareholders in those home-building companies, meanwhile, saw their returns decline by 1.3 percent, on average.

Disclosures also show for the first time just how big several executives’ paydays will be even when they stop working. On top of a 2006 pay package worth $31.5 million, Edward E. Whitacre Jr., 65, the chief executive of AT&T, can look forward to about $73.8 million in deferred pay and the largest pension on the list, at $84.7 million in retirement benefits. Mr. Irani of Occidental Petroleum has more money socked away in his deferred compensation account than any other executive Equilar examined. In fact, Mr. Irani’s deferred pay of $124 million yielded at least $679,396 in interest last year — interest that amounted to more than 14 times the average salary of an oil industry worker.

The new rules “may have increased the visibility of pay packages,” said Mark M. Reilly, a partner at 3C, Compensation Consulting Consortium, in Chicago. “But there are still a lot of problems out there.”

OVER the last year, outsized pay has been at the core of some of the biggest corporate controversies and national debates. Even President Bush has weighed in on the matter. Ordinary American workers are also complaining about the huge salaries and golden goodbyes handed to their chief executives at a time when their own wages and benefits are being cut.

Pay-for-failure has also fueled the compensation debate, highlighted by the nearly $200 million exit package that Henry A. McKinnell secured at Pfizer and the $210 million parachute tied to Robert L. Nardelli’s back at Home Depot. Both left after investor uproar over their companies’ poor performance.

Federal investigations into options backdating at more than 140 companies, meanwhile, have kept executive compensation on the national agenda. On Capitol Hill, lawmakers are considering a say-on-pay rule — which would give shareholders the right to a nonbinding, up-or-down vote on their top executives’ pay packages — even though a similar bill failed to gain traction last year. While that idea is unlikely to become law, investor groups have lobbied to put similar proposals on the shareholder ballots of at least 70 companies, according to Glass, Lewis. Only seven were on corporate ballots last year.

Amid all this attention, the Securities and Exchange Commission made its first attempt to overhaul pay disclosure in 15 years. Ever since the agency began the process in late 2004, its goal was to tighten reporting loopholes that allowed large chunks of an executive’s pay to go unnoticed. Regulators also wanted to provide investors with a clearer understanding of how corporate boards make compensation decisions.

Yet greater disclosure has also made it more challenging to peruse proxies, which have grown exceedingly long. Pfizer’s compensation report runs over 17,000 words. I.B.M. needed 47 pages to explain how its chief executive, Samuel J. Palmisano, and other senior managers were paid last year. Its proxy included a lengthy preamble that bills itself as a helpful “guide to executive pay at I.B.M.,” as well as a reference table just to make sense of its five different bonus programs and three types of retirement plans. The only thing missing was a simple way for the average investor to tally executive pay at the company in less than an afternoon.

(According to Equilar’s analysis, Mr. Palmisano was paid about $18.8 million in total compensation last year, and can expect an additional $34.9 million in deferred pay and $33.1 million in retirement benefits.)

An I.B.M. spokesman, John Bukovinsky, attributed the proxy’s length and any difficulties to the S.E.C.’s new, more detailed reporting requirements. “I am grading our own papers, but I think we do a very good job of explaining I.B.M.’s compensation philosophy,” he said.

Still, even professionals have found most compensation reports to be heavy lifting. “We are very quickly moving to a situation where every proxy comes with its own hand truck — it might be readable, but page after page after page you blur out,” said Brian T. Foley, an independent compensation consultant in White Plains. “For sophisticated shareholders, it is probably useful. For the ordinary guy, it becomes a doorstop.”

And those are just the ones in which the writing is clear. Clarity Communications, an investment relations firm, analyzed the new compensation discussion sections of 40 big companies that filed their proxies before March, to measure their readability. The company used three standard tests that gauge sentence length and word complexity. From Clarity’s perspective, all 40 companies fell short. Even state insurance contracts were easier to read.

“The numbers have added a great deal to investors’ understanding, but we have a way to go on the English prose that accompanies the numbers,” said Christopher Cox, the S.E.C. chairman, in an interview. “If the real purpose was to get a message across to the retail audience, no company would do this,” he added. “A retail products company would never let the legal department write its sales copy.”

Companies, for their part, say they are struggling just to gather all the detailed data just to comply with the new rules, let alone tell the story behind it. (The S.E.C. did, after all, provide 372 pages of detailed rules for a “principles based” analysis.) Boilerplate reports have been a result.

“Plain English has been subsumed by the need to be legally precise,” said Michael S. Kesner, an executive compensation consultant at Deloitte & Touche. “People have agonized over describing whether something is a perk or not.”

Compensation committees have also agonized, pay advisers say, over how much information to release about performance measures they use to help determine short- and long-term bonuses. In this case, proxy watchers say they erred on the side of less disclosure, not more. At stake is the credibility of the S.E.C.’s push to make companies clearly describe the link between pay and performance.

Pay consultants estimate that between half and two-thirds of all companies laid out precise performance metrics last year, such as numbers for revenue growth goals or profit targets, as the new S.E.C. rules require. Only some, like Allstate and the MDU Resources, took the additional step of providing the company’s actual results. And even then, most offered only a few words about how boards determined bonuses. But a surprisingly large number of companies — as many as 40 percent, according to pay consultants — are still speaking about performance in glaring generalities. Dow Chemical and PepsiCo are two examples.

A PepsiCo spokesman said the company had chosen not to reveal the targets because the information was competitive. Dow Chemical did not return calls.

Pay consultants say that many companies, like PepsiCo, are taking advantage of a clause in the new S.E.C. rules that allows them to withhold information about financial targets for competitive reasons. Some of these concerns are legitimate, but many boards are taking a more cautious stance than necessary, several pay advisers said. After all, much of the performance data they are keeping under wraps tends to be for the previous year, they added. In many cases, “I don’t think that the data is confidential to the point where it was competitive harm,” Mr. Kesner said. “The problem is the lawyers said you could take the position that it was confidential.”

Still, some companies are providing useful information. General Electric, which earned high marks from analysts for its concise, 10-page compensation report, also provided investors with a scorecard for how it calculates bonuses.

G.E.’s discussion provides clear insight into the factors that helped directors assess the performance of the C.E.O., Jeffrey R. Immelt, even if his $5 million bonus was not determined by a numerical formula. It stacked up a short list of his nonfinancial accomplishments against G.E.’s strategic objectives and assembled a handy chart that compared several financial targets with the company’s actual performance.

Navigating the summary compensation table in new proxies also presents challenges. In the new category of “total compensation,” the S.E.C. said it intended to provide investors a single figure that offered an easy way to compare pay packages. But there is not just one way to tabulate annual pay. There are at least three. And the results are based largely on how companies record stock options and incentive payouts.

While most people consider “total pay” as the amount an executive takes home for the year — the figure that appears on his or her tax return — the S.E.C.’s new requirements produce a very different figure: what the company books as the executives’ compensation expense, which is an accounting number.

And compensation committees look at pay packages a different way: the total amount that executives receive if the company performs as they expect — what they call “the pay opportunity.” Depending on what method is chosen, an executive’s total pay package can be cast in at least three different lights.

Consider Richard D. Fairbank, the chief executive of Capital One. By the S.E.C’s calculations, Mr. Fairbank received total compensation worth $37.4 million. If you consider his pay opportunity, it was about $18.2 million. And if you look at the amount he actually took home, he made just $151,484 in 2006. (Of course, his take-home pay was bolstered by more than $249.3 million in option profits the year before.)

At a handful of companies, total compensation figures can be mind-boggling. The C.E.O. of Brookfield Homes, Ian G. Cockwell, reported making a negative $2.3 million. What he really took home last year, however, was closer to a positive $8 million. A Christmas Eve change to the S.E.C. rules that govern how companies value options produced these strange accounting numbers.

All of that makes calculating a meaningful “total compensation” figure difficult. Corporations, consultants and investors are not putting much stock in the headline compensation number on the S.E.C.’s table. In fact, a handful of companies, including Bank of America and Goodrich, are plucking from other parts of the proxy to construct their own “alternative summary compensation” charts.

Calculating the change in total pay is similarly tricky. Not only is the S.E.C.’s headline figure confusing, but the agency did not require companies to update their previous-year data to reflect new disclosure rules. Equilar’s “estimated change in pay” analysis relies on several standard assumptions to make comparisons possible. Determining how much money an executive can expect if he or she is fired or forced out is also harder than many investors and pay consultants expected. Even so, the new rules are still unearthing some gravity-defying figures.

In a break from the past, companies must now report what some pay consultants call the “Nardelli Number,” after the former Home Depot chief — the value of any potential severance and change-in-control payouts as of a certain date.

For example, William R. Klesse, the chief executive of Valero Energy, will get more than $24 million if he is ousted. Merrill Lynch’s chief executive, E. Stanley O’Neal, could walk away with $251.4 million if a merger sets off a change-in-control payout.

But how well companies display Nardelli Numbers is all over the map. Some companies, like Boeing and MBIA, have easy-to-read tables. Cigna, by contrast, offers a sprawling, five-page explanation that rivals a credit card application for the sheer amount of fine print. It takes a shovel, meanwhile, just to dig out the payout that Cigna would give H. Edward Hanway its chief executive, if he voluntarily stepped down after any sale of the company. (It is between $72.8 million and $80.5 million, according to company estimates.)

DESPITE a lack of clarity, the new disclosure rules are having a significant impact in some areas. Compensation committee members are spending more time discussing how they reward top executives. Bogus peer-group comparisons are harder to generate. With huge retirement packages being exposed, boards are tallying up how much money was awarded to executives over their careers — some for the very first time.

Under scrutiny, many boards are also pushing back on executive compensation, pay advisers say. Besides cutting down on perks, a few compensation committees are asking questions they might not have asked a few years ago: How much wealth is enough? Why is the chief executive paid significantly more than the next layer of management?

Executive benefits lawyers contend that hardball negotiations over severance are becoming more common. Boards are also inserting “claw back” provisions in new employment contracts, which will allow companies to recoup ill-gotten bonuses.

“The old way of looking at things is being seriously challenged right now,” said John C. Wilcox, in charge of corporate governance matters at TIAA-CREF, the big pension fund. “It’s going to be a learning year for boards, so they won’t make mistakes again in the future.”

Or as Mr. Cox at the S.E.C. suggested in a recent interview: “A company that is required to undress in public will pay more attention to its figures.”

Apr 4th 2007
From The Economist print edition

The prospect of more open skies across the Atlantic is shaking up Europe's airlines

“CHICKEN or beef?” If you think the menu on transatlantic flights is limited, try choosing a European airline to fly across the ocean. European airlines are heavily outnumbered by American ones on most transatlantic routes. Passengers at some European airports, such as Barcelona and Brussels, have no choice but to fly with an American airline if they want to go non-stop. Regulatory restrictions on flights between the European Union (EU) and America are largely to blame. Now an “open skies” deal between the two, which will allow any airline from either side of the Atlantic to fly to any intercontinental destination from March 2008, is shaking up Europe's airline industry.

One effect of the agreement, which will be signed in Washington, DC, on April 30th, is to make takeovers more likely. Without an open-skies deal, any airline that bought a rival based in another EU state risked losing that airline's landing rights in America. Accordingly, on March 30th Texas Pacific Group (TPG), a ravenous private-equity firm, made a preliminary approach to buy Iberia, Spain's leading airline, for €3.60 ($4.80) per share. Spain is one of 11 EU states (Britain, Greece, Hungary and Ireland are among the others) not to have an existing bilateral open-skies deal with America. Passengers in these countries are expected to benefit most from liberalisation.

Acquisition talk is not restricted to Spain. The bidding for a controlling stake in Alitalia, Italy's beleaguered national carrier, edged closer to a result on April 2nd with the announcement of a shortlist of three bidders. (TPG is part of one consortium; Aeroflot, Russia's flag carrier, dominates another.) BMI, a British airline, is the subject of much takeover gossip, largely because it holds coveted landing slots at London's Heathrow airport, Europe's primary transatlantic gateway. A host of smaller EU carriers—Austrian Airlines, Scandinavia's SAS and Poland's LOT among them—are also being talked about as potential targets. “I've never seen it as active as it is now,” says Tim Coombs of Aviation Economics, a consultancy.

The open-skies deal is the main reason for all this activity, but not the only one. Deep-pocketed private-equity firms provide a new source of capital, although many analysts are sceptical that they can thrive in such a capital-intensive and cyclical industry. Nor does the open-skies deal mean that takeovers are free of opposition. Iberia's attractions include its strong Latin American route network, which is not covered by the EU-American pact. A non-Spanish buyer would have to make agreements with aviation authorities there and in other parts of the world. And whatever the rules say, European governments, Spain's and Italy's among them, tend to blanch at foreign control of prized national assets. (In Rome Aeroflot's bid for Alitalia has caused alarm in some quarters.)

The fight for Iberia is likely to be a long one. TPG has not yet tabled a formal offer and its mooted price is below the share price, which has soared since the start of the year on speculation of a bid. British Airways (BA), which already owns 10% of Iberia and has right of first refusal on another 30%, could stymie progress, join forces with TPG, or mount a bid of its own. Lufthansa, another of Europe's big beasts, is watching events in Madrid closely and may yet enter the fray.

If acquisitions prove too costly or complex, carriers can take advantage of the new regime in other ways, such as by adding routes to their schedules. But that depends on getting hold of take-off and landing slots, which are particularly scarce at Heathrow. Just four airlines—BA, Virgin Atlantic, American Airlines and United Airlines—carve up Heathrow's transatlantic slots between them. (Frankfurt divides about half the number of flights to and from America between twice as many carriers; see table below). Anticipating a wave of slot-trading, BA bought 51 weekly slots from BMI last week, consolidating its dominant position at Heathrow.

For its part, Virgin Atlantic is examining the potential for flights to New York from six continental European airports. Virgin is an unusual airline, with a strong brand, a record of taking on an entrenched incumbent and a proven ability to run standalone routes without a network of feeder flights. Other airlines lack its potential to operate outside their home bases, says Peter Morrell of Cranfield University.

The most intriguing possibility is the entry of low-cost carriers into the transatlantic market. The low-cost model is difficult to transfer from short-haul flights to long-haul ones. Long-haul economy fares are already pretty cheap. But there may be room for all-business-class operators to undercut established carriers on denser routes. Some airlines such as Silverjet and MAXjet already offer good fares on transatlantic services from London; the open-skies deal makes it easier for them to extend their services to other business hubs. And at the top end of the market, Lufthansa could expand the all-business service it runs with PrivatAir, a Swiss private-jet operator, to London.

The full effects of the new open-skies deal will take some time to materialise. Many of the benefits bandied about by the European Commission assume an end to restrictions on foreign investment in EU and American airlines. But America's limits on foreign ownership remain in place, despite the promise of future negotiations, and economic nationalism shows no sign of abating in continental Europe. Even so, the outline is emerging of a more normal industrial landscape, in which loss-making operators consolidate and profitable ones expand.

How not to block a takeover

Apr 3rd 2007
From The Economist print edition

Spain's government is the big loser in the battle for Endesa

HAVING fought for more than a year against fierce resistance from Spain’s Socialist government, Wulf Bernotat, the boss of E.ON, Germany’s biggest energy firm, conceded this week that his plan to buy Endesa, Spain’s biggest electricity company, was irrevocably doomed. On Monday April 2nd he announced that he would drop his bid after reaching an agreement with rival bidders to buy some €10 billion ($13.4 billion) of Endesa’s assets if their own plan to acquire the firm succeeds.

Under the terms of the deal with Enel, an Italian electricity giant, and Acciona, a Spanish construction and services group, E.ON will get all of Endesa’s European assets outside Spain, and some of Enel’s operations in Spain. This would make E.ON the third-biggest electricity company in France and the number four in Spain and Italy. Since Enel, Acciona and Sepi, the state holding company, now own almost 50% of Endesa, E.ON was unlikely to win support from a majority of shareholders. And, Mr Bernotat admitted, his firm is not interested in a minority stake.

Mr Bernotat made a wise decision. Further legal and regulatory trench warfare between E.ON, Enel and Acciona and Caja Madrid, another big Endesa shareholder, would have meant more uncertainty for investors and distraction for E.ON’s management. “E.ON has turned what had developed into a very messy situation into a semi-victory furthering its own aims,” says Andrew Moulder at CreditSights, a credit-research company.

The outcome for Enel is good too, assuming the takeover of Endesa goes ahead. It will gain a much needed presence outside of its home market and reduce its dependence on the Italian regulator. Enel is paying a high price, but Endesa reported stellar results recently and European energy companies are desirable prey in the run-up to full deregulation of the European Union (EU) energy market this July.

Acciona did even better than Enel. The Spanish company, led by José Manuel Entrecanales, is likely to be rewarded with lucrative state construction contracts for its help in obstructing the Germans. It has the option to sell its Endesa stake to Enel between 2010 and 2017 at a minimum price of €41 per share, rising in line with interest rates. The Spanish conglomerate will also get access to Endesa’s renewable-energy operations, which will complement its own renewable business.

Spain’s government comes out the worst in this tortuous saga. It supported a lower bid for Endesa by Gas Natural, a smaller Spanish energy firm, because it wanted to create a national energy champion and keep Endesa in Spanish hands. But Gas Natural dropped its bid a couple of months ago, E.ON will now enter the Spanish market, and Endesa’s European arm will be broken up. Moreover, the EU is taking legal action against Spain for breaking European takeover rules.

Manuel Conthe, boss of the CNMV, Spain’s stockmarket regulator, quit his job on April 2nd in protest at the government’s pressure on CNMV to scupper E.ON’s bid for Endesa. His authority was consistently undermined by other members of the regulator’s board who are close to the government. Mr Conthe will explain the reasons for his departure to the Spanish parliament’s economic commission next week. The government can expect an uncomfortable return from the holiday weekend.

Residues of birth control pills, antidepressants, painkillers, shampoos and a host of other compounds are finding their way into the nation’s waterways, and they have public health and environmental officials in a regulatory quandary.

On the one hand, there is no evidence the traces of the chemicals found so far are harmful to human beings. On the other hand, it would seem cavalier to ignore them.

The pharmaceutical and personal care products, or P.P.C.P.’s, are being flushed into the nation’s rivers from sewage treatment plants or leaching into groundwater from septic systems. According to the Environmental Protection Agency, researchers have found these substances, called “emerging contaminants,” almost everywhere they have looked for them.

Most experts say their discovery reflects better sensing technology as much as anything else. Still, as Hal Zenick of the agency’s office of research and development put it in an e-mail message, “there is uncertainty as to the risk to humans.”

In part, that is because the extent and consequences of human exposure to these compounds, especially in combination, are “unknown,” the Food and Drug Administration said in a review issued in 2005. And aging and increasingly medicated Americans are using more of these products than ever.

So officials who deal with these compounds have the complex task of balancing reassurance that they take the situation seriously with reassurance that there is probably nothing to worry about. As a result, scientists in several government and private agencies are devising new ways to measure and analyze the compounds, determine their prevalence in the environment, figure out where they come from, how they move, where they end up and if they have any effects.

In many cases, the compounds enter the water when people excrete them or wash them away in the shower. But some are flushed or washed down the drain when people discard outdated or unused drugs. So a number of states and localities around the country have started discouraging pharmacies, hospitals, nursing homes and residents from disposing of drugs this way. Some are setting up “pharmaceutical take-back locations” in drugstores or even police stations. Others are adding pharmaceuticals to the list of hazardous household waste, like leftover paint or insecticides, periodically collected for safe disposal, often by incineration.

For example, Clark County, Wash., has a program in which residents with unwanted or expired drugs can take so-called controlled substances, like prescription narcotics, to police stations or sheriffs’ offices for disposal. They can drop noncontrolled drugs at participating pharmacies, and 80 percent of the pharmacies in the county participate.

In guidelines issued in February, three federal agencies, including the E.P.A., advised people with leftover medicines to flush them down the drain “only if the accompanying patient information specifically instructs it is safe to do so.” Otherwise, the guidelines say, they should dispose of them in the trash (mixed with “an undesirable substance” like kitty litter to discourage drug-seeking Dumpster divers) or by taking them to designated take-back locations.

Worries about water-borne chemicals flared last summer when researchers at the United States Geological Survey said they had discovered “intersex fish” in the Potomac River and its tributaries. The fish, smallmouth and largemouth bass, were male but nevertheless carried immature eggs.

Scientists who worked on the project said they did not know what was causing the situation, or even if it was a new phenomenon. But the discovery renewed fears that hormone residues or chemicals that mimic them might be affecting creatures that live in the water.

In a survey begun in 1999, the agency surveyed 139 streams around the country and found that 80 percent of samples contained residues of drugs like painkillers, hormones, blood pressure medicines or antibiotics. The agency said the findings suggested that the compounds were more prevalent and more persistent than had been thought.

Meanwhile, the Food and Drug Administration started looking into the effects of residues of antibiotics and antiseptics in water, not just to see if they might affect people but also to assess their potential to encourage the development of drug-resistant bacteria.

Reports of contamination with pharmaceutical residues can be alarming, even when there is no evidence that anyone has been harmed. In 2004, for example, the British government reported that eight commonly used drugs had been detected in rivers receiving effluent from sewage treatment plants. A spokeswoman for the Department for Environment, Food and Rural Affairs said it was “extremely unlikely” that the residues threatened people, because they were present in very low concentrations. Nevertheless, news reports portrayed a nation of inadvertent drug users — “a case of hidden mass medication of the unsuspecting public,” as one member of Parliament was quoted as saying.

Christopher Daughton, a scientist at the Environmental Protection Agency and one of the first scientists to draw attention to the issue, said P.P.C.P. concentrations in municipal water supplies were even lower than they were in water generally because treatments like chlorination and filtration with activated charcoal alter or remove many chemicals. Dr. Daughton, who works at the agency’s National Exposure Research Laboratory in Las Vegas, said he believed that if any living being suffered ill effects from these compounds, it would be fish and other creatures that live in rivers and streams.

Dr. Daughton and Thomas A. Ternes of the ESWE-Institute for Water Research and Water Technology in Germany brought the issue to scientific prominence in 1999, in a paper in the journal Environmental Health Perspectives. They noted that pollution research efforts had focused almost exclusively on “conventional” pollutants — substances that were known or suspected to be carcinogenic or immediately toxic. They urged researchers to pay more attention to pharmaceuticals and ingredients in personal care products — not only prescription drugs and biologics, but also diagnostic agents, fragrances, sunscreen compounds and many other substances.

They theorized that chronic exposure to low levels of these compounds could produce effects in water-dwelling creatures that would accumulate so slowly that they would be “undetectable or unnoticed” until it was too late to reverse them. The effects might be so insidious, they wrote, that they would be attributed to some slow-moving force like evolution or ecological change.

Initial efforts concentrate on measuring what is getting into the nation’s surface and groundwater. The discharge of pharmaceutical residues from manufacturing plants is well documented and controlled, according to the E.P.A., but the contribution from individuals in sewage or septic systems “has been largely overlooked.”

And unlike pesticides, which are intentionally released in measured applications, or industrial discharges in air and water, whose effects have also been studied in relative detail, the environmental agency says, pharmaceutical residues pass unmeasured through wastewater treatment facilities that have not been designed to deal with them.

Many of the compounds in question break down quickly in the environment. In theory, that would lessen their potential to make trouble, were it not for the fact that many are in such wide use that they are constantly replenished in the water.

And researchers suspect that the volume of P.P.C.P.’s excreted into the nation’s surface water and groundwater is increasing. For one thing, per capita drug use is on the rise, not only with the introduction of new drugs but also with the use of existing drugs for new purposes and among new or expanding groups of patients, like children and aging baby boomers.

Also, more localities are introducing treated sewage into drinking water supplies. Researchers who have studied the issue say there is no sign that pharmaceutical residues accumulate as water is recycled. On the other hand, the F.D.A. said in its review, many contaminants “survive wastewater treatment and biodegradation, and can be detected at low levels in the environment.”

Some say the spread of these substances in the environment is an example of how the products of science and technology can have unintended and unpredictable effects. In their view, when the knowledge about these effects is sketchy, it is best to act to reduce risk, even if the extent of the risk is unknown, an approach known as the precautionary principle.

Joel A. Tickner, an environmental scientist at the University of Massachusetts, Lowell, says that it is a mistake to consider all of these compounds safe “by default,” and that more must be done to assess their cumulative effects, individually or in combination, even at low doses.

In his view, the nation’s experience with lead additives, asbestos and other substances shows it can be costly — in lives, health and dollars — to defer action until evidence of harm is overwhelming.

Others say the benefits of action — banning some compounds, say, or requiring widespread testing or treatment for others — should at least equal and if possible outweigh their costs.

“You have to somehow estimate as well as possible what the likely harms are and the likely benefits,” said James K. Hammitt, a professor of economics and decision sciences at the Harvard Center for Risk Analysis.

And while it is possible that some of the tens of thousands of chemicals that might find their way into water supplies are more dangerous in combination than they are separately, Dr. Hammitt said in an interview, “it’s perfectly possible that they counteract each other.”

Anyway, he said, assessing their risk in combination is a mathematical problem of impossible complexity. “The combinatorics of this are truly hopeless.”

Given all this uncertainty, policy makers find it difficult to know what to do, other than continuing their research. Studies of “the fate and transport and persistence” of the P.P.C.P.’s will allow scientists to make better estimates of people’s exposure to them, Dr. Zenick said, and “to assess the potential for human health effects.”

But even that normally anodyne approach comes under question because of something scientists call “the nocebo effect” — real, adverse physiological reactions people sometimes develop when they learn they have been exposed to something — even if there is no evidence it may be harmful.

“The nocebo effect could play a key role in the development of adverse health consequences from exposure even to trace elements of contaminants simply by the power of suggestion,” Dr. Daughton wrote recently in a paper in a special issue of Ground Water Monitoring and Remediation, a publication of the National Ground Water Association, an organization of scientists, engineers and businesses related to the use of groundwater.

In fact, the idea that there are unwanted chemicals in the water supply has many characteristics that researchers who study risk perception say particularly provoke dread, regardless of their real power to harm. The phenomenon is new (or newly known), and the compounds are invisible and artificial rather than naturally occurring.

But scientists at agencies like the Geological Survey say it is important to understand the prevalence and actions of these compounds, even at low levels. If more is known about them, agency scientists say, researchers will be better able to predict their behavior, especially if they should start turning up at higher concentrations. Also, the Geological Survey says, tracking them at low levels is crucial to determining whether they have additive effects when they occur together in the environment.

Comprehensive chemical analysis of water supplies “is costly, extraordinarily time-consuming, and viewed by risk managers as prompting yet additional onerous and largely unanswerable questions,” Dr. Daughton wrote in his paper last year.

But it should be done anyway, he said, because it is a useful way of maintaining public confidence in the water supply.

“My work is really categorized as anticipatory research,” he added. “You are trying to flesh out a new topic, develop it further and see where it leads you. You don’t really know where it leads.”

Marauding maharajahs

Mar 29th 2007 | DELHI
From The Economist print edition

The more Indian firms make acquisitions, the more acquisitions they want to make

David Simonds

FOR proud Indians, nothing—except perhaps victory for their national cricket team—is as sweet as the sight of Indian companies marauding acquisitively across the globe. And marauding they are. So far this year Indian firms have announced 34 foreign takeovers worth more than $10.7 billion in all, according to Dealogic, a market-research outfit. Last year's total was $23 billion, more than five times the previous record and more than the investments made by foreigners in Indian companies. For local industrialists, among the proudest Indians, the buying binge indicates a renaissance, and not only in business. “There's a new India emerging,” says Kumar Mangalam Birla, chairman of the Aditya Birla Group, a big conglomerate. “This shows the new-found respect that India commands in the global arena.”

He should know. Last month Hindalco, the group's aluminium company, bought Novelis, an American rival, for $6 billion, making it the world's biggest aluminium-rolling company. This was barely a week after Tata Steel, India's biggest private steelmaker, sealed an even bigger deal that it had embarked upon last October. It agreed to buy Corus, an Anglo-Dutch rival, for $13.2 billion, a sum nine times the size of the previous largest foreign acquisition by an Indian firm.

Both deals partly reflect the conditions that are encouraging many smaller Indian businesses to buy globally, in pharmaceuticals, computing, car parts, energy and so on. With GDP growth averaging 8% and efficiencies wrought in leaner times, Indian firms have been minting money in the past three years. Their average profit margins are around 10%—more than twice the global average. By one estimate, 60% of India's 200 leading companies are looking to invest this loot in foreign purchases.

Financing such deals is easier than ever. After reforms to capital markets, the stockmarket has exploded even as interest rates have remained low. Other bottlenecks have been removed, including rules limiting the debt that companies can accrue. Last year Ranbaxy, a pharmaceuticals company, used a $440m bond issue to help fund eight acquisitions, in America, Romania, Italy, South Africa and elsewhere. Equally important is the bristling confidence that these advances have imbued in Indian companies. Mr Birla says it would have been very hard to imagine buying Novelis five years ago.

The total value of Indian purchases abroad accounted for 1.8% of that of all cross-border deals last year. But they are growing, with the size of the average Indian foreign acquisition rising tenfold, to $315m, in recent years. Indian business looks certain to continue globalising, partly by buying foreign companies. The removal of remaining barriers to foreign direct investment in India will also bring global benefits, of technology and scale, back home. On March 22nd, after much delay, the government approved a proposal to raise the limit on foreign ownership of telecoms firms to 74%.

Indian companies began their spree in around 2000, which saw 50 foreign deals, together worth less than $1 billion. Most of the deals were, as they still are, done by pharmaceutical and computer-services companies. These were notable survivors of a traumatic liberalisation in the 1990s. They emerged sleeker, more competitive and lusting for new markets for their exports. For such firms, foreign acquisitions are a way to connect their cheap and skilled workforce to new markets and established clients. “For us, India is only one market in the world, though an important one,” says Malvinder Singh, the boss of Ranbaxy, which generates 80% of its business abroad. (That said, Ranbaxy has been more cautious of late. On March 20th it pulled out of the bidding for a subsidiary of Merck, a German drugs giant, which would have made it the world's seventh-biggest maker of generic drugs.)

Another acquisitive urge is for technology, for example in manufacturing. That is one reason behind Hindalco's purchase of Novelis, which makes aluminium cans, a high-value product. To develop a similar facility in India would have taken Hindalco around five years, which it did not have. “In the next three years we'll be long on aluminium,” said Mr Birla. “And this aluminium needs to go somewhere to get value added.” Technology is a big concern for Suzlon Energy, the world's fifth-biggest maker of wind turbines. Last year it paid $565m for Hansen, a Belgian gearbox-maker. “Suzlon understands wind technology and Hansen understands only gearboxes. Now both R&D teams are sitting together, designing products,” says Suzlon's chairman, Tulsi Tanti. Last month Suzlon made a $1.3 billion bid—the third-biggest by an Indian firm—for REpower, a German turbine-maker.

Such deals are typical for companies from emerging economies. Tata Steel's acquisition of Corus was different. The company survived liberalisation, and then prospered, by investing in sophisticated capital-intensive production. As the world's lowest-cost steel producer, it was able to raise the money to buy Corus, its bigger rival, and become the world's fifth-largest steelmaker. It now aims to dominate its market. Only a handful of Indian firms are capable of such vast ambition. And most, being family-owned, may be too reticent to accept the associated risks.

Nonetheless, the tide of foreign acquisitions by Indian companies will continue to rise, with more and bigger deals. How successful they will be is less certain. No big foreign acquisition has failed so far—even though, according to consultants at McKinsey, that is the fate of 60-70% of cross-border takeovers. “It's important for companies to look at the economic rationale, and not get taken to extremes by emotion and ego,” says Ranbaxy's Mr Singh. Wise words for proud Indians, especially since their cricket team keeps losing.

Philip Roth Wins Saul Bellow Prize

Philip Roth is to be named today the winner of the first PEN/Saul Bellow Award for Achievement in American Fiction, The Associated Press reported. The $40,000 prize, to be given every two years, honors a “distinguished living American author of fiction whose body of work in English possesses qualities of excellence, ambition and scale of achievement over a sustained career which place him or her in the highest rank of American literature.” Mr. Roth, 74, whose novels include “Portnoy’s Complaint” and “American Pastoral,” is a winner of the Pulitzer Prize, National Book Award and National Book Critics Circle prize. He is a three-time winner of the PEN/Faulkner prize, most recently for his novel “Everyman,” inspired in part by the death of Bellow (1915-2005), whose novels included “The Adventures of Augie March,” “Henderson the Rain King” and “Herzog.” Mr. Roth, who described “Augie March” as “the most important book published in English in the second half of the 20th century,” said, “How could I be anything but thrilled to receive an award bearing Saul Bellow’s name?”

‘Blades of Glory’ Cuts a Fine Figure

Two new films captured the top spots at North American box offices over the weekend. “Blades of Glory” (Paramount), the ice-skating comedy starring Will Ferrell, and Jon Heder, took in $33 million to become No. 1 in the rankings. Second place went to “Meet the Robinsons” (Buena Vista), the 3-D computer-animated Disney film about a bespectacled orphan, with $25 million, according to estimates from the box-office tracking company Media by Numbers. As a result last week’s second-place finisher, the sword-and-sandals epic “300” (Warner Brothers), dropped to third place on a haul of $11.1 million, but its four-week take swelled to $179.6 million. Last week’s No. 1 film, “TMNT,” the adventures of the Teenage Mutant Ninja Turtles, also from Warner Brothers, fell to fourth place, with $9.1 million, a decline of 62 percent. Fifth place went to the motorcycling comedy “Wild Hogs” (Buena Vista), with $8.3 million for a five-week total of $135.3 million.

Glastonbury Tickets Fly

In 1 hour 45 minutes yesterday the 137,500 tickets available to the public for this year’s Glastonbury Festival, Britain’s biggest open-air music event, were snapped up, the BBC reported. Last week the Mendip District Council in Somerset, England, approved a four-year extension of the festival’s license that will increase its capacity to 177,500. Among those scheduled to perform at this year’s festival, from June 22 to 24, are the Arctic Monkeys, the Who and Shirley Bassey, but the full lineup will not be announced until June.

Gromit Sidelines Nipper

Nipper, the mixed-breed terrier that has been cocking his head over a gramophone speaker for more than a century, is about to be given a bit of a respite. The canine model that became the visible symbol of recording brands including RCA and HMV is being given a partial rest by HMV, the BBC reported. To support the promotion of children’s DVDs at its stores, HMV will replace Nipper for three months with Gromit, the expressive and clever animated sidekick of the absent-minded inventor and cheese lover Wallace in the Wallace & Gromit films. But assurances were given that Nipper is not being sent out to the canine equivalent of pasture and will still represent HMV in other capacities requiring a logo. Nipper, who died in 1895, was immortalized three years later in a painting by his owner, Francis Barraud. In 1898 the Gramophone Company, now EMI, acquired the painting for £100, and Nipper first appeared on the HMV label in 1907.

Comedy Makes a Splash

“Room Service” was a bit slow on Saturday night at the SoHo Playhouse. That’s because the Fire Department, not normally part of the cast of this 1930s comedy, had a role to play. “Room Service,” about a Broadway producer trying to save his show and prevent his cast from being evicted from a hotel during rehearsals, was in its second act when strange noises began to emerge from pipes in a backstage hallway. Before long the noises had become rumblings and clangings. Vibrations could be felt onstage, a spokesman said. Investigation revealed that the pipes had burst, the downstairs lounge was flooded, and the water needed to be shut off at once. That stopped the show. Exit the audience. Enter the Fire Department to check the situation. Officials gave the O.K., and in the grand tradition of theater, the show went on.

Divorce Settlement for Britney Spears

The pop star Britney Spears, 25, and her husband, the former backup dancer Kevin Federline, 29, both above, have reached a divorce settlement, a spokesman for his lawyer said, Reuters reported. Terms were not disclosed, but a statement issued by Michael Sands, the spokesman, said, “The parties signed an agreement which was a global settlement on all issues of their marriage and child custody.” The agreement is subject to final approval by a judge. The couple, who married in September 2004 and separated last year, are the parents of two sons, Sean Preston, 18 months, and Jayden James, 6 months.

Nadine Gordimer Awarded French Legion of Honor

The South African novelist and 1991 Nobel laureate in literature Nadine Gordimer was awarded the French Legion of Honor in ceremonies yesterday at the French Embassy in Pretoria, South Africa, Agence France-Presse reported. “By making you an officer of the Legion of Honor, we also wish to pay tribute to a symbolic figure of the fight against apartheid,” the French ambassador, Denis Pietton, told her. “Your work, deeply marked by the situation in South Africa, remains universal.” Three of Ms. Gordimer’s 15 novels were banned by the apartheid regime, which ended in 1994.

Footnotes

The Pulitzer prize-winning playwright Edward Albee will announce the winner of the inaugural Yale Drama Series competition in a ceremony on April 26 at the Stanley H. Kaplan Penthouse at Lincoln Center. The annual award will go to an emerging playwright from the United States, Canada, Britain or Ireland for an original full-length play written in English and not previously published or produced. The winner of the contest receives the David C. Horn Prize of $10,000, publication of the prize manuscript by the Yale University Press and a staged reading at Yale Rep. ... The Pulitzer Prize-winning composer Paul Moravec has been named artist-in-residence at the Institute for Advanced Study in Princeton, N.J. He will introduce new works and lead the institute’s annual concert series in a term beginning on July 1.