Name that company

Based in the Netherlands and founded in 1891, I’m the world’s biggest lightbulb and electric shaver manufacturer. I’m also Europe’s largest electronics company, with annual revenues topping $30 billion. I offer such wares as color television sets, lighting, electric shavers, computer monitors, semiconductors, medical diagnostic imaging and one-chip TV products. I employ 170,000 people in more than 60 nations. My brand names include Marantz, Norelco and Magnavox. One in seven television sets and 60 percent of telephones contain my components. I light 30 percent of offices and hospitals around the world. I hold 85,000 patent rights. Who am I?

Know the answer? Send it to us with Foolish Trivia on the top and you’ll be entered into a drawing for a nifty prize! The address is Motley Fool, Box 19529, Alexandria, Va. 22320-0529. Send questions for Ask the Fool, Dumbest (or Smartest) Investments (up to 100 words), and your Trivia entries to Fool@fool.com. Last week’s answer: Darden Restaurants.

Lucent dials for profits

Lucent Technologies (NYSE: LU) is one of a few large companies in the country with a female CEO, Patricia Russo. Russo’s been cutting jobs and other expenses as she rights this wobbly ship.

Lucent has lost a body-blowing $29 billion since 1999, but it’s beginning to stem its losses. In its most recent quarter it lost $389 million, and by the end of its fiscal year in September, it expects to post a profit. (Yes, a profit!) But Lucent won’t be out of trouble yet. Although the company expects to have $2 billion in cash by fiscal year-end, it has $3.2 billion in long-term debt — $1 billion of which could be due in August 2004 if bank credit isn’t extended.

That, in addition to declining sales, thinned ranks, and Russo’s expectation for only 5 percent to 7 percent long-term growth in telecom, makes for a long upward haul ahead.

Meanwhile, since The New York Stock Exchange can delist a stock if its average price doesn’t top $1 per share over a 30-day period, Lucent is considering a reverse stock split. By decreasing the number of shares outstanding, it would hike the share price to between $15 and $25.

Lucent needs to start earning enough profits to pay down its debt, reinvest in research and development, and fund its underfunded pension fund. Russo still has a lot of work to do.

Bad call

After retiring from Pacific Bell many years ago, I had accumulated several shares of the eight Bell companies in my management incentive plan. Years later, since it required so much bookkeeping to retain all of those records for tax purposes, I decided to sell. I looked around for one company to buy stock in when I sold all the Bell shares. I had been subscribing to Value Line for a long time and was watching Emerson Radio. It was rated highly. Also, we had an Emerson microwave that worked well, and Emerson had the franchise to sell it at many discount stores. I sold AT&T for $27 a share and put all of the money into Emerson Radio. They filed for bankruptcy protection about a year later. — M. K., Carmichael, Calif.

The Fool Responds: Yikes. Value Line does provide investors with valuable information on companies, but no stock recommendation is foolproof. Emerson did indeed seek bankruptcy protection in 1993. It reorganized itself in 1994, and emerged as a new company. Unfortunately, when companies reorganize in bankruptcy, common stock shareholders often end up with nothing.

Shareholder action

How can shareholders get a board of directors to be as concerned about the dividend as they seem to be in executives’ compensation packages? — Cork Uri, via e-mail

A huge problem in recent years has been that boards of directors have not been concerned enough about executive salaries. According to BusinessWeek magazine, in 1980, the average CEO earned 42 times what the average worker made. In 2000, that had skyrocketed to 531 times the average worker’s haul.

The average American’s salary hasn’t increased by more than 1,000 percent in the past 20 years — yet too many CEOs have been giving themselves hefty raises each year, with the blessings of their boards of directors.

Last year, the Conference Board’s Commission on Public Trust and Private Enterprise addressed this problem. It called for more independent compensation committees within boards of directors, instead of chummy types who rubber-stamp excessive rewards.

It can be hard to get the attention of boards of directors, but it can be done. Learn to be a more active shareholder at www.corpgov.net, www.thecorporatelibrary.com and www.shareholderaction.org.

Do I have to sell my IRA stocks when I turn 70 1/2? — G.M., Mobile, Ala.

With traditional IRAs, you must begin taking distributions after you turn 70 1/2. Your withdrawals generally will be taxable, counting as ordinary income. You’ll probably need to sell some stocks in the IRA to generate cash, and then take your distribution as cash (though some IRA trustees permit distributions of shares rather than cash).

If you have a Roth IRA, there are no mandatory distributions. And if the Roth IRA is at least five years old and you’re older than 59 1/2, distributions are tax-free. Learn more at www.irs.gov.

Here’s some tips for women

Many women (and men, too) aren’t tending to their finances, and they’re paying a high price for it. Consider these facts. Wives tend to be less involved than husbands in household investing and retirement planning. Most married women outlive their husbands. Fully 80 percent of all widows in poverty became poor only after the death of their husbands. In 2000, 70 percent of the elderly poor in America were women.

But here’s some good news. More women are investing today than in the past. According to a study commissioned by the National Association of Securities Dealers, roughly half of all investors are women, up from 37 percent in 1990.

When women invest, they can do very well. They can often outperform men, too. Why? In a 1998 study, University of California at Davis professors Brad Barber and Terrance Odean found that men are more likely than women to be overconfident and to trade frequently. Single men, for example, traded 67 percent more than single women, reaping lower returns. Their study found that, “men trade 45 percent more than women and earn annual risk-adjusted net returns that are 1.4 percent less than those earned by women.”

Here are some guidelines for women — and heck, men — interested in getting started:

• Take time to learn before doing. Don’t jump into any investment without understanding it and being comfortable with it. Read “One Up on Wall Street” by Peter Lynch (Fireside, $14) or our “Motley Fool Personal Finance Workbook” (Fireside, $14).
• Don’t be afraid to take on some risk. Sticking to low-risk choices like savings bonds or money market funds can doom you to lower returns. As long as you’re investing for five to 10 or more years, you can afford to ride out short-term market downturns.
• Consider forming an investment club. Learn how with the NAIC at www.better-investing.org.

If you know a woman who doesn’t have her financial ducks in a row, clip out this article and pass it on to her. She may thank you one day from the bottom of her wallet.