BloggingStocks http://www.bloggingstocks.com BloggingStocks http://www.blogsmithmedia.com/http://www.bloggingstocks.com/media/feedlogo.gif BloggingStocks http://www.bloggingstocks.com en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/<![CDATA[Obama wants a non-binding vote on executive pay]]>http://www.bloggingstocks.com/2009/07/17/obama-wants-a-non-binding-vote-on-executive-pay/http://www.bloggingstocks.com/2009/07/17/obama-wants-a-non-binding-vote-on-executive-pay/http://www.bloggingstocks.com/2009/07/17/obama-wants-a-non-binding-vote-on-executive-pay/#commentsFiled under:

The Obama administration proposed legislation yesterday that would require fully-reporting publicly traded companies to give their shareholders a non-binding vote on executive compensation. Under the proposal, directors would have to ask shareholders what they think before going ahead and doing what they were going to do anyway.

Administration insiders predicted that the measure would pass Congress easily, but that isn't stopping the Chamber of Commerce and the even more infamous Business Roundtable from opposing the measure.

Why would anyone what oppose a non-binding vote is beyond me. Why are they so opposed to taking a straw poll of their shareholders to find out what they think about their pay practices? Why are they so opposed to companies soliciting the opinions of their shareholders?

If anything, this measure doesn't go far enough. What's needed in the boardrooms of America is a revolution -- where shareholders take back their company from lazy, incompetent and just plain crooked directors who bankrupted General Motors, sent Bank of America (NYSE: BAC) onto the welfare rolls, and turned American International Group (NYSE: AIG) into America's most degenerate gambling addict. And non-binding resolutions will lead to a non-binding revolution, which is really no revolution at all.

Obama wants a non-binding vote on executive pay originally appeared on BloggingStocks on Fri, 17 Jul 2009 15:20:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>Corporate GovernanceCorporateGovernanceExecutive CompensationExecutive PayExecutiveCompensationExecutivePayOBamaFri, 17 Jul 2009 15:20:00 EST<![CDATA[General Motors hires firm to find new board of directors]]>http://www.bloggingstocks.com/2009/05/11/general-motors-hires-firm-to-find-new-board-of-directors/http://www.bloggingstocks.com/2009/05/11/general-motors-hires-firm-to-find-new-board-of-directors/http://www.bloggingstocks.com/2009/05/11/general-motors-hires-firm-to-find-new-board-of-directors/#commentsFiled under:

Interim General Motors (NYSE: GM) Chairman Kent Kresa has hired Spencer Stuart, a New York firm, to help him locate candidates to replace at least half of the beleaguered automaker's twelve directors.

The Wall Street Journal reports (subscription required) that Mr. Kresa has originally planned to conduct the search himself, but was persuaded the a search firm could perform the job more quickly. Replacing the board of directors is important politically as GM looks to present enough of a fig leaf of change to prevent President Obama from pulling the plug and plunging the company into bankruptcy.

Continue reading General Motors hires firm to find new board of directors

General Motors hires firm to find new board of directors originally appeared on BloggingStocks on Mon, 11 May 2009 16:30:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>Board of DirectorsBoardOfDirectorsCorporate GovernanceCorporateGovernanceDirectorsGeneral MotorsGeneralMotorsGMinthenewsMon, 11 May 2009 16:30:00 EST<![CDATA[Calpers calls for ousting of Bank of America board of directors]]>http://www.bloggingstocks.com/2009/04/29/calpers-calls-for-ousting-of-bank-of-america-board-of-directors/http://www.bloggingstocks.com/2009/04/29/calpers-calls-for-ousting-of-bank-of-america-board-of-directors/http://www.bloggingstocks.com/2009/04/29/calpers-calls-for-ousting-of-bank-of-america-board-of-directors/#commentsFiled under:

The largest pension fund in the country, the California Public Employees' Retirement System (Calpers), wants Ken Lewis and every single one of Bank of America's (NYSE: BAC) 17 other directors sent packing for not disclosing mounting losses at Merrill Lynch or the company's secret meeting with the Treasury Department looking for money to complete the acquisition.

Calpers joins the Service Employees International Union, CtW Investment Group, and a number of other influential shareholders and proxy advisors in voting for Ken Lewis to be kicked off the company's board of directors.

Continue reading Calpers calls for ousting of Bank of America board of directors

Calpers calls for ousting of Bank of America board of directors originally appeared on BloggingStocks on Wed, 29 Apr 2009 07:00:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>BACBank of AmericaBankOfAmericaCorporate GovernanceCorporateGovernancefeaturedKen LewisKenLewisWed, 29 Apr 2009 07:00:00 EST<![CDATA[Bank of America urged to split CEO and chairman roles]]>http://www.bloggingstocks.com/2009/04/17/bank-of-america-urged-to-split-ceo-and-chairman-roles/http://www.bloggingstocks.com/2009/04/17/bank-of-america-urged-to-split-ceo-and-chairman-roles/http://www.bloggingstocks.com/2009/04/17/bank-of-america-urged-to-split-ceo-and-chairman-roles/#commentsFiled under: ,

The Wall Street Journal reports (subscription required) that momentum is building behind a shareholder proposal that would separate the role of chairman and CEO at Bank of America (NYSE: BAC). The company's annual meeting will be held on April 29 and has the support of Proxy Governance, a leading proxy advisory firm. The proposal is sponsored by the Service Employees International Union.

There are two angles to this. The first is that chairman and CEO Ken Lewis is a discredited clown who has presided over a level of value destruction with few historical precedents. That he has a job at all anywhere is amazing and disappointing, so of course it would be great to find someone else to be the chairman if he must remain as CEO.

Continue reading Bank of America urged to split CEO and chairman roles

Bank of America urged to split CEO and chairman roles originally appeared on BloggingStocks on Fri, 17 Apr 2009 08:44:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>BACBank of AmericaBankOfAmericaCorporate GovernanceCorporateGovernanceinthenewsKen LewisKenLewisFri, 17 Apr 2009 08:44:00 EST<![CDATA[Australia clamps down on CEO pay the right way]]>http://www.bloggingstocks.com/2009/03/19/australia-clamps-down-on-ceo-pay-the-right-way/http://www.bloggingstocks.com/2009/03/19/australia-clamps-down-on-ceo-pay-the-right-way/http://www.bloggingstocks.com/2009/03/19/australia-clamps-down-on-ceo-pay-the-right-way/#commentsFiled under: , ,

While American politicians whine self-righteously about corporate governance travesties at bailed out companies they had every opportunity to extract concessions from, Australia's government is actually taking steps toward long-term improvements in executive pay practices.

The Wall Street Journal reports that "Treasurer Wayne Swan said the center-left Labor government will amend the Corporations Act to require shareholder approval for any termination payments that exceed average annual base salary, which excludes additional compensation such as shares or stock options."

Continue reading Australia clamps down on CEO pay the right way

Australia clamps down on CEO pay the right way originally appeared on BloggingStocks on Thu, 19 Mar 2009 12:40:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>aigAustraliaCorporate GovernanceCorporateGovernanceExecutive CompensationExecutive PayExecutiveCompensationExecutivePayinthenewsThu, 19 Mar 2009 12:40:00 EST<![CDATA[Bank of America compensation committee can't muster much criticism]]>http://www.bloggingstocks.com/2009/03/04/bank-of-america-compensation-committee-cant-muster-much-critici/http://www.bloggingstocks.com/2009/03/04/bank-of-america-compensation-committee-cant-muster-much-critici/http://www.bloggingstocks.com/2009/03/04/bank-of-america-compensation-committee-cant-muster-much-critici/#commentsFiled under: ,

Bank of America (NYSE: BAC) Ken Lewis' compensation fell by 80% in 2008 as the company's stock declined by 66% and a pair of just plain stupid acquisitions primed the company for an even greater fall. In 2008, Ken Lewis took the steps that transformed one of the most powerful financial institutions in the world into a welfare diva, narrowly avoiding nationalization by sucking at the nipple of Uncle Sam. Either way, shareholders have all been wiped out.

Aside from not paying Lewis a bonus, what did Bank of America's compensation committee have to say about all this? "Regardless of our profitability and continued progress and growth, our performance for 2008 did not meet our expectations, including a loss for the fourth quarter."

Continue reading Bank of America compensation committee can't muster much criticism

Bank of America compensation committee can't muster much criticism originally appeared on BloggingStocks on Wed, 04 Mar 2009 11:40:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>BACBank of AmericaBankOfAmericaCorporate GovernanceCorporateGovernanceExecutive PayExecutivePayinthenewsKen LewisKenLewisWed, 04 Mar 2009 11:40:00 EST<![CDATA[Serious Money: Frustration is not apathy!]]>http://www.bloggingstocks.com/2009/03/03/serious-money-frustration-is-not-apathy/http://www.bloggingstocks.com/2009/03/03/serious-money-frustration-is-not-apathy/http://www.bloggingstocks.com/2009/03/03/serious-money-frustration-is-not-apathy/#commentsFiled under: , , , , ,

One of our reader's who blesses us with frequent comment's, B. Harrison, left the following tidbit for us recently (responding to: Buffett suffers big losses at Berkshire Hathaway) and I thought I would share it because this sentiment comes to us frequently.
  • "And the American people are simply apathetically sitting back while our CORRUPT Congress who enabled and allowed all of the corporate FRAUDS, continues to allow the CORRUPT CEOs and Boards of Directors run those corporations, and to keep their ill gotten "weath" that they amassed while mismanaging the corporations, and orchestrating and perpetuating all of those FRAUDS."
I do not agree that the American people are "apathetically sitting back".... They are voicing their opinions on the web, in letters and emails to their representatives, they take to the streets and protest, they sell the stock of poorly run companies and file class action suits. The truth is that they are frustrated because our representatives have an unwavering singular focus, and that is to sustain themselves in office. Nothing takes a higher priority then that; it's called political self preservation.

Continue reading Serious Money: Frustration is not apathy!

Serious Money: Frustration is not apathy! originally appeared on BloggingStocks on Tue, 03 Mar 2009 14:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>AIGBerkshire HathawayBerkshireHathawayBRK.ABRK.BCcitigroupcorporategovernanceexecutive compensationExecutiveCompensationgeneral motorsGeneralMotorsGMgovernanceinthenewspoliticspublic opinionPublicOpinionSheldon LiberSheldonLiberWarren BuffettWarrenBuffettTue, 03 Mar 2009 14:00:00 EST<![CDATA[Bank of America sponsors the NFL Experience ... a bad move?]]>http://www.bloggingstocks.com/2009/02/02/bank-of-america-sponsors-the-nfl-experience-a-bad-move/http://www.bloggingstocks.com/2009/02/02/bank-of-america-sponsors-the-nfl-experience-a-bad-move/http://www.bloggingstocks.com/2009/02/02/bank-of-america-sponsors-the-nfl-experience-a-bad-move/#commentsFiled under:

We may need to have a talk with Bank of America (NYSE: BAC) ... a talk about tact and smart spending. Remember last week? You know, when President Obama lowered the hammer of shame on banks that were wasting their money? Perhaps BAC doesn't.

I was going to avoid writing about the Super Bowl today (mainly because I am a Cincinnati Bengals fan that hates the Steelers), but I found a story questioning the thought process of BAC and its sponsorship of the NFL Experience. This traveling exhibit has been a mainstay at the past 18 Super Bowls and it features sports games and interactive entertainment stretched over 850,000 square feet.

Continue reading Bank of America sponsors the NFL Experience ... a bad move?

Bank of America sponsors the NFL Experience ... a bad move? originally appeared on BloggingStocks on Mon, 02 Feb 2009 19:00:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>bacBank of AmericaBankOfAmericacorporate governanceCorporateGovernancedumbinthenewsspendingSuper BowlSuperBowlMon, 02 Feb 2009 19:00:00 EST<![CDATA[Sandy Weill gives up Citigroup corporate jet]]>http://www.bloggingstocks.com/2009/02/02/sandy-weill-gives-up-citigroup-corporate-jet/http://www.bloggingstocks.com/2009/02/02/sandy-weill-gives-up-citigroup-corporate-jet/http://www.bloggingstocks.com/2009/02/02/sandy-weill-gives-up-citigroup-corporate-jet/#commentsFiled under: , ,

Over the weekend, the New York Post reported that former Citigroup Inc. (NYSE: C) Chief Executive Sandy Weill and his family flew on a company jet for a vacation in Mexico weeks after the New York-based bank received a $45 billion bailout from the federal government and said it would slash 75,000 jobs. Today, the now-disgraced banker said he will give up the perk

According to the Wall Street Journal, "Weill's office said in a statement on Monday morning that `in light of the unprecedented circumstances that Citi finds itself in' he decided to stop using Citi aircraft immediately." Wow, if you did not know any better you would have thought he had given up his left arm instead of a seat on a luxurious jet.

Continue reading Sandy Weill gives up Citigroup corporate jet

Sandy Weill gives up Citigroup corporate jet originally appeared on BloggingStocks on Mon, 02 Feb 2009 17:45:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>banksCcitigroupcorporate governancecorporate jetsCorporateGovernanceCorporateJetsfeaturedSandy weillSandyWeillMon, 02 Feb 2009 17:45:00 EST<![CDATA[Carl Icahn calls for a corporate governance stimulus]]>http://www.bloggingstocks.com/2009/01/23/carl-icahn-calls-for-a-corporate-governance-stimulus/http://www.bloggingstocks.com/2009/01/23/carl-icahn-calls-for-a-corporate-governance-stimulus/http://www.bloggingstocks.com/2009/01/23/carl-icahn-calls-for-a-corporate-governance-stimulus/#commentsFiled under: ,

Carl Icahn has been making the round doing everything short of stripping naked on CNBC to get his message across: Corporate governance in America is a complete joke and a major contributor to the mess we're in now. Shareholders and lawmakers need to get on the ball and do something about it.

In an op-ed piece in today's Wall Street Journal, Icahn writes that government bailouts have essentially plowed hundreds of billions of dollars into poorly-managed companies that still have same poor governance structures and lazy and incompetent managements and directors.

What can Congress and President Obama do? Icahn writes that "First, Congress needs to pass legislation giving shareholders enhanced rights to elect new boards, submit resolutions for stockholder votes, and have far more input on executive compensation and other issues. As companion to these reforms, Congress needs to pass legislation that prevents managers from making it more difficult for shareholders to exercise their ownership rights."

Icahn has been complaining about corporate governance in America for literally decades. He was lionized as an opportunist and corporate raider but the events of the past few months are proving that he was on to something.

Here's an idea: President Obama should create a cabinet level position of corporate governance that can work with all branches of government to improve shareholder right and management accountability. And the first Secretary of Corporate Governance should be none other than Mr. Icahn.

Carl Icahn calls for a corporate governance stimulus originally appeared on BloggingStocks on Fri, 23 Jan 2009 17:00:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>Carl IcahnCarlIcahnCorporate GovernanceCorporateGovernanceFri, 23 Jan 2009 17:00:00 EST<![CDATA[RiskMetrics blasts companies paying compensation taxes]]>http://www.bloggingstocks.com/2008/11/24/riskmetrics-blasts-companies-paying-compensation-taxes/http://www.bloggingstocks.com/2008/11/24/riskmetrics-blasts-companies-paying-compensation-taxes/http://www.bloggingstocks.com/2008/11/24/riskmetrics-blasts-companies-paying-compensation-taxes/#commentsFiled under:

The Wall Street Journal reports (subscription required) that RiskMetrics Group is advising investors to withhold votes from corporate directors who approve tax "gross-ups" to cover taxes on forms of executive compensation like perks and golden parachutes offered in the case of a merger or buyout.

I've always thought that the whole tax gross-up thing was ridiculous . Do people earning 8-digit pay packages really need help paying their taxes? Worse, the tax gross-ups could also make it harder to figure out the total compensation given the absurd legalese that is found in proxy statements. But was it really that big of a deal? Or was it just a complication that really didn't result in any additional shareholder cash being wasted? A company that pays $6.5 million plus $3.5 million in tax gross-ups is no worse than one that pays $10 million in cash.

But according to RiskMetrics, tax gross-ups are indicative of an "anything goes" corporate culture: S&P 500 firms offering tax-gross ups to their executives had golden parachutes 61% bigger than those that didn't -- without including the value of the gross-up!

The one nice thing that has come out of the market mayhem is a renewed interest in corporate governance. Tales of executive looting are making the front-page of newspapers, and Congress has taken interest. Whether anything will come of it depends on the willingness of the large institutional investors that control the voting rights to most of the stock in this country to put their foot down.

RiskMetrics blasts companies paying compensation taxes originally appeared on BloggingStocks on Mon, 24 Nov 2008 13:24:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>Corporate GovernanceCorporateGovernanceExecutive Compensationexecutive payExecutiveCompensationExecutivePayinthenewsMon, 24 Nov 2008 13:24:00 EST<![CDATA[Carl Icahn plans corporate governance lobbying group]]>http://www.bloggingstocks.com/2008/10/06/carl-icahn-plans-corporate-governance-lobbying-group/http://www.bloggingstocks.com/2008/10/06/carl-icahn-plans-corporate-governance-lobbying-group/http://www.bloggingstocks.com/2008/10/06/carl-icahn-plans-corporate-governance-lobbying-group/#commentsFiled under: ,

With financial institutions imploding in a wave of writedowns -- and executives who delivered mind-bogglingly bad performance walking away from the wreckage with millions -- Carl Icahn is seizing on the current environment to push his agenda on corporate governance reform.

Icahn announced today that he is forming United Shareholders, a lobbying group, to push for legislative reform that would outlaw shareholder-unfriendly corporate bylaws like poison pills and staggered boards.

Lobbyists get a lot of bad press, but this sounds like one effort that will actually be promoting the interests of ordinary investors. In recent months, we've seen the dangers of bad governance and poorly-aligned pay packages that induce executives to take excessive risks.

It seems that Icahn, who has spent most of his life building one of the largest fortunes in the world, is now looking out for his legacy. If Icahn's lobbying and blogging efforts have any effect on the way companies are run, it will be a good one.

Carl Icahn plans corporate governance lobbying group originally appeared on BloggingStocks on Mon, 06 Oct 2008 15:55:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>Carl IcahnCarlIcahnCorporate GovernanceCorporateGovernanceMon, 06 Oct 2008 15:55:00 EST<![CDATA[Free Dennis Kozlowski! Former Tyco chief pursues appeal]]>http://www.bloggingstocks.com/2008/09/05/free-dennis-kozlowski-former-tyco-chief-pursues-appeal/http://www.bloggingstocks.com/2008/09/05/free-dennis-kozlowski-former-tyco-chief-pursues-appeal/http://www.bloggingstocks.com/2008/09/05/free-dennis-kozlowski-former-tyco-chief-pursues-appeal/#commentsFiled under: ,

Former Tyco (NYSE: TYC) CEO Dennis Kozlowski and former CFO Mark Swartz asked New York's Supreme Court to throw out their convictions on the grounds of insufficient evidence -- Kozlowski had been convicted of grand larceny.

As despicable of a character as Kozlowski is, he doesn't belong in prison: Tyco was a corporate governance train wreck, and he was essentially jailed for being paid an obscene amount of money. Tyco was not a massive securities fraud and, in fact, has produced solid returns for its shareholders.

One of the flaws with the Tyco case -- and it extends into media coverage of corporate governance today -- is that it held an executive responsible for gross negligence on the part of the board of directors. By throwing Kozlowski in jail and writing him off as a crook, the real threat to shareholders was essentially let of the hook: complacent and compliant directors at public companies.

Free Dennis Kozlowski, stop wasting taxpayer money imprisoning someone who was more reflective of an era than evil, and move onto bigger battles.

Free Dennis Kozlowski! Former Tyco chief pursues appeal originally appeared on BloggingStocks on Fri, 05 Sep 2008 10:30:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>corporate governanceCorporateGovernanceDennis KozlowskiDennisKozlowskiinthenewsMark SwartzMarkSwartztycTycoFri, 05 Sep 2008 10:30:00 EST<![CDATA[Directors meeting with investors: good or bad?]]>http://www.bloggingstocks.com/2008/07/21/directors-meeting-with-investors-good-or-bad/http://www.bloggingstocks.com/2008/07/21/directors-meeting-with-investors-good-or-bad/http://www.bloggingstocks.com/2008/07/21/directors-meeting-with-investors-good-or-bad/#commentsFiled under:

A piece in today's Wall Street Journal (subscription required) discusses "an emerging breed of directors who reach out to shareholders", listening to concerns, explaining governance policy, and basically just acting attentively in communications with shareholders.

But not everyone's so sure it's a good thing. There are concerns about Reg FD and selective disclosure -- directors can't say anything that material and non-public -- but directors should have enough familiarity with securities laws to know better. If they don't , they're probably ill-qualified for the Sarbanes-Oxley world.

I like the idea of directors holding meetings with investors, or even just talking on the phone. First of all, it's nice to see directors actually doing something to earn their keep. I'd support the idea of non-executive chairmen being required to stuff envelopes for a few hours a week because being a director is one of the easiest, least stressful, least time-consuming jobs there is.

Concerns about selective disclosure and undermining management aside, here's the thing: directors can always listen to shareholder concerns, and refusing to hear from the people you work for is just plain arrogant. They might not be able to say much, but they can always listen and, perhaps, learn about the issues that matter to their bosses: the shareholders.

Directors meeting with investors: good or bad? originally appeared on BloggingStocks on Mon, 21 Jul 2008 17:31:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>Board of DirectorsBoardOfDirectorsCorporate governanceCorporateGovernanceDirectorsMon, 21 Jul 2008 17:31:00 EST<![CDATA[Arthur Levitt calls it right on corporate governance reforms]]>http://www.bloggingstocks.com/2008/07/02/arthur-levitt-calls-it-right-on-corporate-governance-reforms/http://www.bloggingstocks.com/2008/07/02/arthur-levitt-calls-it-right-on-corporate-governance-reforms/http://www.bloggingstocks.com/2008/07/02/arthur-levitt-calls-it-right-on-corporate-governance-reforms/#commentsFiled under:

While calling Arthur Levitt's tenure as chairman of the Securities & Exchange Commission ineffective would be an understatement, he could, and still can, be relied upon to say the right thing. Now that the SEC finally has the quorum necessary to take action on a variety of issues, they should take Levitt's advice about proxy access changes.

Earlier this year the SEC made it impossible for shareholders to change the way directors are elected -- one of the most anti-investor events in recent history -- and it's time for that to change. Levitt writes in The Wall Street Journal that "While not a panacea, giving shareholders a bigger voice in the companies they own would go a long way in helping to restore trust."

Exactly. Some critics of strong corporate governance say that the SEC shouldn't meddle in these affairs. I basically agree: but the problem is that the SEC has meddled, making it impossible for shareholders to take control of their own companies when necessary.

Continue reading Arthur Levitt calls it right on corporate governance reforms

Arthur Levitt calls it right on corporate governance reforms originally appeared on BloggingStocks on Wed, 02 Jul 2008 14:07:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>arthur levittArthurLevittcarl icahnCarlIcahnchristopher coxChristopherCoxcorporate governanceCorporateGovernanceCoxIcahninthenewsLevittSECWed, 02 Jul 2008 14:07:00 EST<![CDATA[How you can assess corporate governance]]>http://www.bloggingstocks.com/2008/06/30/how-you-can-assess-corporate-governance/http://www.bloggingstocks.com/2008/06/30/how-you-can-assess-corporate-governance/http://www.bloggingstocks.com/2008/06/30/how-you-can-assess-corporate-governance/#commentsFiled under:

A new study out of Stanford's law and business schools suggests that the increasingly popular corporate governance quotients provided by firms like the Corporate Library and Institutional Shareholder Services may not be so helpful. The researchers found little or no correlation between the ratings at different firms, and higher scores do not appear to correlate with strong performance. Indeed, firms that performed well based on ISS metrics were found to be more likely to face shareholder class-action lawsuits, which is mystifying.

The companies that provide governance data do, in my opinion, provide a valuable service, but investors who really want to know what's going on at their companies should go read the proxy statements themselves, straight from the SEC's Edgar database (Look for "DEF 14A"). Here are some questions to ask as you look:

  • Do the executives and directors own a large amount of stock in the company? Do they sell frequently or buy stock on the open market with their own money? An important, but often overlooked, area to look at is the ownership of the directors. Directors who own a large amount of stock are likely to be more vigilant in performing their duties.
  • How does executive pay change from year to year? Does it go up every year by leaps and bounds regardless of performance, or do the top guys take a hit with the shareholders?
  • Does the company have a staggered board, poison pill, or other devices designed to make it more difficult for shareholders to affect change?
  • Does the company disclose any significant related party transactions?

If you can come up with detailed answers to those questions, you'll have a much better idea of the company's governance strengths and weaknesses than you can get from reading any third-party report.

How you can assess corporate governance originally appeared on BloggingStocks on Mon, 30 Jun 2008 18:29:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>Corporate governanceCorporateGovernanceMon, 30 Jun 2008 18:29:00 EST<![CDATA[Should macroeconomic woes slow CEO pay growth?]]>http://www.bloggingstocks.com/2008/06/15/should-macroeconomic-woes-slow-ceo-pay-growth/http://www.bloggingstocks.com/2008/06/15/should-macroeconomic-woes-slow-ceo-pay-growth/http://www.bloggingstocks.com/2008/06/15/should-macroeconomic-woes-slow-ceo-pay-growth/#commentsFiled under: ,

The Associated Press reports that "as the American economy slowed to a crawl and stockholders watched their money evaporate, CEO pay still chugged to yet more dizzying heights last year." The average S&P 500 CEO took home a pay package valued at $8.4 million in 2007, an increase of 3.5%. The top 10 highest paid CEOs took home a total of more than $500 million, but 5 of those companies saw huge drops in profitability at their companies. It's good to be the boss, even when it stinks to be the shareholder.

On one level, criticizing rising executive pay based on the performance of the economy is grossly unfair: executives should be paid based on their marginal value to the company, not based on broader economic trends that they have no control over. The problem is that executives routinely benefit from factors they have no control over: any CEO of any oil company is doing quite well just for being in the game. When things are going well, everyone's happy, and shareholders generally don't complain about CEO pay when they're earning double-digit returns. But when CEOs don't take a hit with the shareholders on the way down, it's not fair. CEOs are in the ideal "Heads I win, tails it wasn't my fault and I still win" situation.

What can be done about executive compensation problems? That's easy: improved corporate governance that can only be achieved through an increase in shareholder activism. Large institutional shareholders need to get off their hands and threaten with proxy fights when corporate boards fail to do their jobs. For its part, the SEC can improve proxy access, making it easier for dissident shareholders to affect change if that is the will of the majority.

Right now, companies can be run by small clique of insiders who have virtually no stake in the company's long-term future -- and decades can go by without any accountability. Until that changes, executive compensation in America will continue to be a disaster.

Should macroeconomic woes slow CEO pay growth? originally appeared on BloggingStocks on Sun, 15 Jun 2008 11:15:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>CEO PayCeoPaycompensationcorporate governanceCorporateGovernanceexecutive compensationExecutive PayExecutiveCompensationExecutivePayinthenewsSun, 15 Jun 2008 11:15:00 EST<![CDATA[Aflac shareholders can quack on executive pay]]>http://www.bloggingstocks.com/2008/05/05/aflac-shareholders-can-quack-on-executive-pay/http://www.bloggingstocks.com/2008/05/05/aflac-shareholders-can-quack-on-executive-pay/http://www.bloggingstocks.com/2008/05/05/aflac-shareholders-can-quack-on-executive-pay/#commentsFiled under:

Aflac (NYSE: AFL), which is a major insurer, has an off-beat message - at least, according to its commercials (which involve a noisy duck).

Well, the company has made some history this week. That is, the shareholders can vote "yes" or "no" on executive compensation.

While it is non-binding, it is still important. If anything, its recognition from Aflac that its shareholders have a say on things.

Funny enough, the company really doesn't need this in terms of pacifying shareholders. After all, Aflac has been a solid performer.

However, does this mean we'll see other firms join in the trend? Perhaps some. But, when it comes to giving up a little power, you're likely to see lots of resistance in the boardroom.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

Aflac shareholders can quack on executive pay originally appeared on BloggingStocks on Mon, 05 May 2008 15:50:00 EST. Please see our terms for use of feeds.

Permalink | Email this | Comments]]>AFLACCorporate GovernanceCorporateGovernanceExecutive PayExecutivePayinthenewsMon, 05 May 2008 15:50:00 EST<![CDATA[The Rockefellers have every right to complain about Exxon]]>http://www.bloggingstocks.com/2008/04/30/the-rockefellers-have-every-right-to-complain-about-exxon/http://www.bloggingstocks.com/2008/04/30/the-rockefellers-have-every-right-to-complain-about-exxon/http://www.bloggingstocks.com/2008/04/30/the-rockefellers-have-every-right-to-complain-about-exxon/#commentsFiled under: , , ,

Earlier today, my colleague Douglas McIntyre argued that the Rockefeller family shouldn't "bite the hand that feeds" it at Exxon Mobil Corp. (NYSE: XOM), a company founded by ancestor John D. Rockefeller. I couldn't disagree more.

The family is advocating a series of proposals such as creating an independent chairman and pushing the world's largest oil company to be more environmentally friendly seem pretty sensible to me. First of all, corporate governance experts advocate separating the role of chairman and chief executive as a good idea for all companies, not just successful ones. This is a good way to prevent a company from falling under the control of an imperial CEO.

Also, I can't understand why McIntyre thinks that "developing new forms of alternative energy is essentially the job of smaller companies which will eventually compete with Exxon for business." Other oil companies including BP Plc. (NYSE: BP) are moving headlong into alternative energy. Even Exxon, which argues that wind, solar and biofuels will account for 2% of global energy demand by 2030, isn't totally opposed to the idea of alternatives to oil.

According to a statement on its Web site, "ExxonMobil is taking to address the risk of climate change. These included working to improve energy efficiency and fuel economy, and groundbreaking research into low-emissions technologies." The company, of course, argues that the world will need petroleum-based energy for some time to come.

Finally, the idea that shareholders should just sit back and let management do whatever it wants couldn't be more wrong. Companies are owned by shareholders and are supposed to be working in their best interests. Despite record profits, Exxon shares have barely budged this year. If the Rockefellers think the company can do better, the company should at least hear them out.

The Rockefellers have every right to complain about Exxon originally appeared on BloggingStocks on Wed, 30 Apr 2008 15:48:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>bpcorporate governanceCorporateGovernanceinthenewsRockefeller familyRockefellerFamilyXOMWed, 30 Apr 2008 15:48:00 EST<![CDATA[Bad idea: New SEC rule threaten's Chairman Cox's legacy]]>http://www.bloggingstocks.com/2007/11/29/bad-idea-new-sec-rule-threatens-chairman-coxs-legacy/http://www.bloggingstocks.com/2007/11/29/bad-idea-new-sec-rule-threatens-chairman-coxs-legacy/http://www.bloggingstocks.com/2007/11/29/bad-idea-new-sec-rule-threatens-chairman-coxs-legacy/#commentsFiled under: ,

Yesterday I wrote about a new SEC rule that will make it easier for corporate managers to reject shareholder efforts to put their own board nominees on the ballot.

The decision is a disaster for corporate governance in America, and the Wall Street Journal's headline today pretty much sums it up: "Cox, in Denying Proxy Access, Puts His SEC Legacy on the Line."(subscription required). Christopher Cox is the Chairman of the SEC.

The Journal adds that "The tensions over proxy access may tarnish Mr. Cox's image as a self-proclaimed investor advocate. It also reopens concerns he had so far deflected: that he would roll back shareholder rights in favor of business interests, as well as questions about the effectiveness of his consensus-based approach to rule making."

The argument against broader proxy access is pretty lame: Business groups argue that this will allow corporations to prevent special interest groups like labor unions or GreenPeace from hijacking public companies to further their own interests. That would be a valid point except that special-interest groups rarely gain enough shareholder support to win board seats -- If they do get the number of votes needed to get on the board, then it isn't really a special interest: most shareholders support it!

What this will really do is make it easier for incompetent or just plain bad directors to insulate themselves and management from accountability. That's wrong and it's bad for business.

Bad idea: New SEC rule threaten's Chairman Cox's legacy originally appeared on BloggingStocks on Thu, 29 Nov 2007 16:15:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments]]>corporate governanceCorporateGovernanceCOXSECshareholder rightsShareholderRightsThu, 29 Nov 2007 16:15:00 EST