CtTaxed.com

Obama Calls For Checks On Executive Pay

Obama has called for a law that would require corporations to submit to the shareholders a referendum for the lack of a better word on the CEO compensation package.

They the shareholders would not get to reject it, but rather express approval or disapproval. The right to approve a compensation package would still reside with the Board of Directors.

During the BearStreans / JP Morgan “buyout/sellout/raid?” I wondered where was the Board of Directors? They are the shareholders representatives, they are elected to the Board by the shareholders and they are accountable to the owners, the shareholders.

Seems to me with a massive failure and loss of value such as this, the Board of Directors didn’t do a very good job at protecting and growing the shareholders equity.

The shareholders can’t be intimately involved with the details of running a corporation, that is the Board of Directors job or to assure it is done right. Corporations carry large amounts of insurance on Directors in case they are sued by shareholders and part of that package is usually legal fees. So the most that can happen to a Board that really screws up, is they don’t get elected on to the Board next term. No Director fee.

I’d rather see measures to hold the Board more accountable to the shareholders. More shareholder meetings, better disclosure to shareholders or perhaps more frequent and detailed question and answer sessions.

The point is not compensation, but rather is the company delivering value to its owners? Getting bought out at $2 a share when you traded at over $80 is not delivering value.

The real concern should be were the owners of the firms properly represented? They is us.

This is just more populist, politics of bitterness from Obama, a man who can’t find his heart.

We don’t need this in the highest office of the land.

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