One of the fun responsibilities I have working for a company like ours is knowing when to challenge the status quo -- or take a sledgehammer to something that once worked but might need massive change.  As a design thinker, I tend to think in terms of creating an "addictive" on-line, in-person or in-print customer experience.  A challenge, to be sure... as in our massively networked day and age, how quickly we leap from story to story, new to newer in search of the next big client, conversation or company!

So how to engage one's attention long enough that they don't bounce from us to someone else?  One of the areas I'm most bullish on has thrown our team for the biggest curveball: the monetization of online videos. Now, I know I'm not the only one who's trying to figure out how to create a sustainable business.  In fact, TechCrunch shared a piece "The State of Online Video: Getting Paid for Content" that addresses many of the business challenges we have as we move to a more digital state of sharing.  I'll let you hop over to read the piece in full.  Just know the cynical line that caught my eye was this: Old media and video: Those who can won’t, those who want can’t.

Fortunately for us, we've been moving in this direction for almost a year -- driven in large part by an entrepreneurial chairman and exceptionally talented VP of Digital Strategy.  While we haven't figured it totally out, let me share a recent example of a video our team produced and just posted to BankDirector.com (it features John Duffy, the Vice Chairman of Keefe, Bruyette and Woods -- one of the most knowledgeable and plugged in investment bankers when it comes to financial services companies) 

If you don't have time to view this, John shares his perspectives on the good, the bad and the ugly state of the financial services industry.  In short order, he touches on bank profitability forecasts, improving bank valuations and jump starting M&A activity.  All tremendously valuable and timely information that benefits the officers & directors we count as core to our business.

So as we continue to consider how companies that want to gain access to this group might sign on to sponsor video series (think TED) or produce for their own marketing purposes (to take advantage of significant cost savings), I'm excited to keep sharing great information like this.  And yes, I very much welcome thoughts for how we might improve/enhance this experience for viewers and potential sponsors alike.  Feel free to share an idea below.

Earlier today, I had the pleasure of introducing Susan O'Donnell at the Bank Director/American Banker Bank Board Symposium in Dallas, Texas.  Susan, the Managing Director at the executive compensation consulting firm Pearl Myer & Partners and a fellow New Englander, spoke to a diverse group of bank CEOs, CFOs, Presidents and directors from both public and privately held institutions about the ever-evolving world of executive comp.  As I did post-KBW presentation yesterday, a recap of her presentation follows below.

Since Lehman and Bear Stearns' failures in 2008, quite a number of external forces have influenced executive pay and governance within the financial community.  From a surge in bank failures to the public perception of bonus excess, Susan shared what leaders of financial institutions have dealt with over the last two years alone:

• Treasury's CPP/TARP program places new restrictions + compliance requirements on executive compensation;
• The Obama administration introduces broad principles on risk, pay for performance and non-binding shareholder votes;
• The SEC announces new disclosure rules (e.g. risk discussions, CEO/Chair role, the proxy solicitation process, etc.);
• Shareholder activism increases, with increased proposals related to executive pay and board governance;
• Shareholder advisory firms publish new guidelines that enable them to exert greater influence on shareholder votes;
• Bank regulators jointly issue guidance for risk management of incentive compensation that effects everyone; and
• The Dodd-Frank Wall Street Reform Act is signed into law.

With increased scrutiny, disclosure and regulation requirements cascading upon the industry, it might come as no surprise that the three major themes impacting compensation plans today are risk management and assessment of pay programs, a focus on long-term performance, and the alignment of pay for performance incentives.  So what advice did Susan give the audience of officers and directors?

• Stay informed by attending conferences like this one;
• Develop processes + define roles of management, the compensation committee and the board;
• Review compensation programs and incentive plans; and
• Prepare for future disclosure + regulatory reviews.

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Susan did a great job answering specific questions from the crowd; during the Q+A, I made a note to link to a client report that her firm recently issued regarding the Dodd-Frank Reform Act.  Signed into law in late July, it provides insight on new requirements for "Say on Pay, Executive Pay Disclosure and Director Independence May Eventually Affect All Companies."  If you're like me and thinking about how the public companies that comprise the financial industry might claw their way out of the last few year's turmoil, understanding the incentive plans available to key officers and directors is a must read.

I'm in Dallas -- a few miles from my old home, in fact -- for our company's annual Bank Board Symposium.  Held in conjunction with American Banker, pretty cool to put my Bank Director hat back on and re-connect with a handful of people I first met 11+ years ago. Let me share some observations from this afternoon's event... 

As the two leading education and content providers for the financial services industry, Bank Director and SourceMedia’s American Banker put together today + tomorrow's conference.  At a time when banks and bank boards are experiencing unprecedented scrutiny to rebuild capital and restore shareholder value, I've been doing my best to get smart about the past eighteen months (described to me as having produced the most dramatic changes in banking since the great depression).  So yes, I'm excited to listen, learn and engage with a great group of bank CEOs, CFOs, chairman and outside directors.

I mentioned running into familiar faces here in Dallas.  One of them is Keefe, Bruyette & Woods' CEO, John Duffy.  Always quick with a smile, he kicked things off today like he has so many of Bank Director's conferences: with some telling data points and statistics.  While economist declared the market hit rock bottom in March of 2009, John put it in context of the market favoring large-cap banks since the subsequent rally began.  Intuitively, this makes sense: investors place a premium on liquidity -- and small and mid cap bank stocks simply aren't as attractive today as those large institutions that investors can get into and out of.  While I will not try to repeat his industry update, I did want to share a few notes I took during his presentation:

• For the 2006 - 2009 financial crises, bank stocks lagged the S&P 500 by 26% per year.
• In terms of earning trends, pre-tax/pre-provision earnings face "headwinds" of increased regulatory costs, shrinking balance sheets and increased carrying costs.
• There were 25 fewer bank M&A transactions in 2009 than 2008, representing a 17% decline in terms of transactions during the year (following a 50% drop in 2008).  In real numbers, 119 deals in '09 vs. 144 in '08, 288 in '07 and 296 in '06.  To-date, there have been 118 deals in 2010.
• Think those numbers are startling?  Consider that bank M&A activity in terms of deal value fell off the cliff in 2009, decreasing by $34 billion (94%)!

Back to an investor's perspective: he cited a number of important considerations.  For example, liquidity of common stock, institutional ownership, whether sufficient capital is being raised and the use of proceeds.  All interesting stuff as I get back into the swing of things here.  With a number of exceptional services providers supporting the event, I hope to post more later tonight relative to FDIC-assisted transactions and views from the FDIC, OCC and OTS (all speakers here).  At the very least, post #1 relative to my efforts to "get smart" ASAP.

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FYI: John referenced KBW's bank indices -- the BKX for large cap and the regional KRX -- throughout his presentation.  Worth taking a look to get a sense of the information he shared...