Exxon Mobil (NYSE: XOM) chairman and CEO Rex Tillerson was under attack today as some members of the Rockefeller family tried to convince shareholders to split the chairman and CEO jobs. Tillerson won the battle, and at least for now, will continue to hold both positions for the oil giant.

As Zac Bissonnette noted Tuesday, Neva Rockefeller Goodwin and Peter O'Neill, descendants of John D. Rockefeller were the powering force behind today's proposed action, which wound up failing as only 39.5% of the company's shareholders voted to support the new changes. There were 4.4 billion votes cast in this years vote.

Last year, a similar proposal was put before a shareholder vote, with nearly an identical result of only a 40% approval for such a change.

One of the most tired defenses against criticism of executive pay gone wild is the comment that athletes and pop stars earn outrageous sums of money, so why not executives? It's exactly that argument that Marc Hodak uses in a column for Forbes: "When rock stars make big bucks, we can look at the ticket and album sales and understand where it comes from. But when a CEO makes rock star income, we figure he must be scamming the shareholders."

Here's why that analogy doesn't work: when an owner of a sports team decides to spend $100 million on a superstar shortstop, that's his choice. It's his money. He owns the team, and he's entitled to do whatever he wants with it. Similarly, if 12-year old girls want to collectively spend $100 million on Menudo posters (And who can blame them!), that's their prerogative.

But what if the owner of a sports team was forced to spend money on players based on the whims of retired politicians and economics professors who serve on 15 other boards, collecting $100,000 from each company in exchange for going to a couple meetings a year and have no particular stake in the outcome of the investment? And what if these decision-makers could only be voted out once every few years, but the ownership of the team was so fragmented and most of the owners were so inattentive that it was nearly impossible to get them replaced?

That is, in effect, the situation we have in executive compensation. If the owners of public companies actually had any meaningful say in how much CEOs were paid, the sports star analogy would work. Since they don't, it doesn't. Executive pay is a classic principal-agent problem, and it's one that can only be solved through improved corporate governance.

So shareholders of Aflac (NYSE: AFL) had a really cool idea: wouldn't it be cool if the owners of the company got to have some say in how the top employees at the company were compensated?

I know: blasphemy. But on Monday the company best known for a duck voiced by Gilbert Gottfried became the first company to give its shareholders a say on pay. The result? A big fat nothing. More than 93% of shareholders approved of the $11.96 million compensation package that CEO Daniel P. Amos received for 2007. During Mr. Amos' 18-years at the helm, the stock has appreciated more than 3,000%. So here's a guy who deserves his big payday.

Amazingly, most shareholder resolutions suggesting say-on-pay proposals have been opposed by management and voted down by large institutional shareholders. It's hard to understand given that the votes are simply advisory. Why shouldn't the board hear how shareholders feel about the work of the compensation committee?

But with 93% of voters approving the CEO's package, the say on pay deal at Aflac changes nothing, which is not surprising. Companies that have strong enough corporate governance and shareholders awake enough to demand a say on pay are not likely to suffer from egregious pay problems. The executive compensation outhouses like Countrywide Financial (NYSE: CFC) would never have votes like this.

For the purposes of this examination, let's set aside the fact that you can find reliable clinical research that shows that tobacco smokers cost the insurance industry less over their lifetimes than svelte nonsmokers do. This is simply due to the fact that we tend to die sooner. But that's a matter of insurance industry/government/pharmaceutical hijinx, to possibly discuss another time.

That aside, the item I'm bringing forward today is how the issue of lying smokers should be pursued by Whirlpool Corp.(NYSE: WHR). I'll not take issue against Whirlpool's insurance plan demanding a different level of premium payment from smokers. I'll not take issue against Whirlpool asking smokers to document their participation in the addiction. I'll not take issue against Whirlpool taking action against smokers who lied when claiming that they don't smoke. What I do argue against is the ludicrous notion that Whirlpool employees have turned on one another. It appears that's what the company expects us to believe.

Whirlpool management wants you to believe that they had 39 instances of one employee reporting another for serving their nicotine addiction in violation of what should be a confidential declaration of status. Whirlpool expects you to believe that these company "rats" know which smokers lied on their paper work and which didn't. Whirlpool expects you to believe that all policy violators are of hourly status and that violations by management staff either don't exist or aren't yet worth pursuing. Whirlpool expects us to believe that the company itself wasn't at the root of this all.

The following story came to me this week from a reader who's sentiments may be shared by a lot folks. If I am the last one on the planet to have seen it and it has been circulating around the web for a long time, please excuse my redundancy.

The story pokes fun at business bureaucracy, mismanagement, corporate fairness, employee relations and more. Finding this type of story more often in your in-box displays a kind of recession fatigue and growing cynicism.

A foreign company and an American company decided to have a canoe race on the Missouri River. Both teams practiced long and hard to reach their peak performance before the race. On the big day, the foreign company won by a mile. The Americans, very discouraged and depressed, decided to investigate the reason for the crushing defeat. A management team made up of senior management was formed to investigate and recommend appropriate action.

Their conclusion was the foreign team had 8 people rowing and 1 person steering, while the American team had 8 people steering and 1 person rowing. Feeling a deeper study was in order, American management hired a consulting company and paid them a large amount of money for a second opinion. They advised that too many people were steering the boat while not enough people were rowing.

A piece on Portfolio.com reports on an increasingly popular trend in executive compensation: the $1 salary.

Of course, in this era of outrageous pay for poorly-performing executives, the prospect of a $1 salary has its allure for investors. It's refreshing. But when you hear about a $1 salary, you still have to dig deeper to learn how much a CEO really made.

For instance, Capital One (NYSE: COF) CEO Richard Fairbanks' 2007 salary of $1 made for great headlines but a look at the proxy statement pegs his total compensation for the year at more than $20 million because of generous options grants -- which can come back to dilute the shareholders in the future and are therefore a very real expense.

Why would he structure his pay like that? Portfolio reports that "Salary is taxed at rates as high as 35 percent, while capital gains from stock sales are taxed up to 15 percent. Cutting down the salary portion of an executive's compensation could help reduce the overall tax bill."

With the vast majority of large-cap CEOs in the 35% bracket, taking cash over stock may be leaving money on the table.

But the proxy statement for Apple (NASDAQ: AAPL) shows that Steve Jobs really does only earn $1 and, more impressively, essentially never sells stock. There's a guy who really is aligned with the company's long-term shareholders.

The point is that there's nothing wrong with a CEO boasting that he only takes $1 per year in pay -- but there's also nothing necessarily great about it either. To really understand compensation, you have to go past the sound bytes and read the proxy statement.

One source of contention among eBay Inc. (NASDAQ: EBAY) users have always been that the company does not listen, or least hear, their concerns. Well, the company is hoping to change that when it launches a new blog next month, "eBay Ink.", which will be manned by social media veteran Richard Brewer-Hay.

Fortune Small Business was able to take a crack at Brewer-Hay and ask him the tough questions that many eBay users are bound to be asking themselves. It was a pretty interesting read to be sure, and according to Brewer-Hay his new blog will be completely his words with absolutely no control by eBay itself.

eBay has definitely been under fire lately. The e-commerce giant has been accused of losing touch with its users, and acting more out of greed than anything else. The company is hoping that this new blog will give users a more direct look into the internal operations and decisions by the company. While eBay currently has blogs and forums for its users to use, these are more geared towards more traditional corporate communications.

Apple (NASDAQ: AAPL) has been on the rise today, as renewed enthusiasm over future iPhone sales has brought buyers into the stock, pushing shares up $7.67 to $130.63, or 6.2% .

The company has stated that its goal for overall iPhone sales by the end of 2008 was 10 million units, and according to Apple's COO, Tim Cook, the company remains confident in hitting that hefty goal.

Since the highly anticipated release of the iPhone last year, there have been a couple of points that Apple has taken a bit of heat over, the first being that outside programmers were not allowed to write programs for the iPhone, and the second being the company's decision to grant individual carriers rights to sell their phones in their respective countries.

A piece (subscription required) in The Wall Street Journal looks at the increasingly common practice of companies selecting new CEOs from the ranks of their current directors.

Proponents of the practice believe that a current director will already have some familiarity with the company and its people and that that makes for a smoother transition. But the Journal adds that "Some investors disagree. They contend that a chief chosen from the board signals cronyism and weak succession planning. A director's comfort with a colleague obscures `a clear view of the individual's suitability to be a successful CEO,' says Richard Breeden, an activist investor and former chairman of the Securities and Exchange Commission."

Another concern that I have that wasn't touched on in the article is that in many cases, a member of the board is brought in to replace a CEO who has been pushed aside because of poor performance.

When we took a look at eBay (NASDAQ: EBAY)'s fourth-quarter earnings last night, we also made note that long-time CEO Meg Whitman would be stepping down, to be replaced by John Donahoe. We wondered what changes Mr. Donahoe would be bringing to his new position, and some of those answers have come quicker than we expected, as Donahoe has already announced a few changes that we can expect to see.

One thing consistently on the mind of eBay users is the website's fee structures. Since last year, users have been openly voicing their disappointment with what they consider to be abnormally high selling fees, and it seems like Donahoe will quickly look to address these concerns.

Donahoe said that within a few weeks, we will be seeing a brand new fee structure from eBay. In response to what users are demanding, eBay is planning to lower its upfront listing fees, but at the same time will be raising final selling fees. These final fees are only paid once an item has been successfully sold, and I am sure that users will not like to hear this too much, but they should be happy to hear that the initial listing fees are going to be reduced.

Shares of e-commerce giant eBay Inc. (NASDAQ: EBAY) are trading around 7% lower in after hours trading today following its fourth quarter earnings release shortly after the market close.

As I looked at in my earnings preview, the company has been struggling to keep up with the competition in its auction business. Two key components that have hurt eBay's auction business are (1) raising fees that have left some of the company's long term users looking for other venues to do their business, and (2) large number of fraudulent items on the site.

The company announced that its fourth quarter numbers were actually better than Wall Street had expected, with earnings per share of 45 cents per share, easily topping the 41 cents that analysts had been expecting to see.

With snickers and a wink and nod they gave that man first chair.
They set him in it like a king, "We hope you like it there."

A million two per quarter pay, perhaps a million eight.
"He's worth the price", they grinned and laughed. "We know he'll pull his weight."

In three short years he wrecked the place and drove it to the ground.
Those jobs were lost, no R&D, no market share was found.

Shareholders screamed, "Just can the rat! We've had all we can take!"
They failed to see the crony game and credentials that were fake.

So Congress said, "We'll check this out, and try to quell the noise."
All the while they smugly smirked, "We got yer back, my boys."

So when the shares did plummet fast, and plummet oh they did,
the board room finally acquiesced and let go of the kid.

His last bold move was to dig deep and grab a hundred million.
If he could have gotten 'way with it, he'd have taken half a billion.

The same old song, the same old dance,
the same pony and pup.

Excuse me please 'cause I must go drop coins in Wall Street's cup.

2008 G.E. Sattler

It didn't work out so well when Michael Jordan tried it.

But it appears that CEOs coming in out of retirement to retake control of companies is actually a good thing for companies and investors.

According to a recent study of encore performances of corporate CEOs, led by Rudi Fahlenbrach, an assistant finance professor at Ohio State University, the stocks of companies run by CEOs who've come back in from the bullpen outperform the market by 6% annually during their reign.

So, as Herb Greenberg at MarketWatch posits, this could bode well for investors in Dell Computer (NASDAQ: DELL) and Starbucks (NASDAQ: SBUX) -- both companies that have brought back CEOs to help lead their companies.

Quoting Greenberg: "According to Fahlenbrach, from 1995 through 2004 at least 75 CEOs at the country's 1,500 largest companies were called back to active duty from either retirement (especially if they still have a large financial stake in the company) or having been relegated to the chairman's outpost. "One of the most significant predictors of someone coming back is poor stock-market performance of the current CEO."

If this works for well for CEOs, do you think we can do it for the president of the United States of America? Where's Reagan these days...

Zack Miller is the Managing Editor of IsraelNewsletter.com and a former equity analyst for a leading multinational hedge fund.

Hewlett-Packard (NYSE: HPQ), the world's largest computer manufacturer, has launched the second phase of its "Happy People" campaign in its U.K. offices, according to the company. The program with the trite name has the goal of making its U.K. offices a happier and more productive place to work.

Well that's not a new concept, except for what I believe are CEO Mark Hurd's efforts to cut a bunch of fat from the decision-making layers and real-time information that has really helped HP ascend to the top of the tech world in the last 24 months. In fact, I'll go on record and say that Hurd's obsession with fine-tuning -- in every possible way -- the world's largest tech company is directly responsible for its recent success. Forget the recent "HP Way" -- it's "Hurd's Way," and it's something other companies should pay attention to, regardless of Six Sigma involvement and other business buzzphrases that grab headlines.

Under the Happy People campaign, the focus is to identify the consequences of inefficient paperwork and unnecessary administration. In other words, toss the red tape and enable your employees to be the professionals they are (or should be). In Hurd's mind, using technology to automate, simplify or reduce paperwork is his mantra -- one he's mentioned several times in recent quarterly conference calls as one of the top areas to attack for gaining competitive advantage. A nice side effect is that is leads to increases in employee morale and productivity, according to the company.

Of course it does! Nobody wants to work in an inefficient environment in the information age. The problem is that millions still do.

The resignation of a board member at once high-flying skate-shoe manufacturer Heelys (NASDAQ: HLYS) could be a harbinger of a managerial shake-up at the company.

On December 21st, Heelys filed an 8-K announcing that on December 17th, board member James Kindley had resigned in protest to a board resolution "relating to Michael G. Staffaroni's, the Company's President and Chief Executive Officer, handling of certain operational matters".

In a letter to Staffaroni filed with the 8-K, Kindley explained his resignation:

As you know, I strongly support your vision for the company and your strategy for realizing it. Regrettably, a majority of the directors voted at the November meeting for an ultimatum expressing dissatisfaction with your performance, an action I openly opposed (that is not reflected in the minutes) and one that I feel signals an unjustified lack of confidence in you and your strategy. I am unable and unwilling to support the majority's alternatives and directives.

Given that a majority of the board has expressed dissatisfaction with the CEO -- and saw fit to hold a vote to formalize that disappointment -- his days with the company could be numbered.

Heelys has had a rough time since its IPO. Its stock has fallen from a high of $40.09 to its current price under $6.25, which was accompanied by a slew of shareholder class action lawsuits. A change at the top could be a short-term catalyst for a recovery in the share price and, with the board's dissatisfaction with the CEO now plastered over an SEC filing, that could come soon.