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The Wall Street Journal has a comprehensive story in the weekend edition (dated Feb. 9) on how Carlsbad's TaylorMade left Carlsbad's Callaway weeping at the tee in the golf equipment business. TaylorMade now has 47% of the market for woods, according to Golf Datatech. That's up from 26% in 2007 and 11% in 2002. TaylorMade also has 25% of the irons market, up from 16% in 2007. Callaway sales have dropped 26% since 2007 while TaylorMade's have risen 21% over the same period. TaylorMade pulled off aggressive management moves while Callaway made one bad move after another, particularly in one acquisition.

The Journal story did not mention one misadventure of the prior Callaway management. I covered it in my column of April 28, 2010. In its proxy statement, Callaway had boasted that a significant part of executive compensation should be based on performance, although management retention also played a role. The company in 2009 came in with a horrible year; sales dropped and earnings went into the red. So the board shifted its emphasis to management retention, and top management was richly rewarded for an extremely bad performance.

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