On Sat, 9 May 2009 07:58:12 -0700 (PDT), Too_Many_Tools
wrote:
snip
I strongly agree George...but it IS different.

Why else has executive pay become the way it is?

TMT
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IMNSHO the root cause is because the executives get to set their
own pay, establish their own bonuses, and the criteria for which
the bonuses are to be awarded, at least up until the time
bankruptcy is filed. If engineers, machinists, or anyone else
were able to set their own pay without regard to the market, the
same situation would quickly arise.

This seems to be a direct result of the isolation/insulation
mechanisms the board of directors has been allowed, indeed even
encouraged, to erect such as super majority voting, staggered
directors terms, etc. as "hostile take over" defenses.

I have written my Congressional representatives several times on
this suggesting an imposed revision in corporate governance,
mandating changes to again make the owners [stockholders]
"masters in their own house," at least for the SEC regulated,
non-chapter S corporations. [As has been observed "a crisis is a
terrible thing to waste..."]

Among the provisions proposed:

* Mandatory simple majority voting, i.e. 50% + 1 vote is enough
to pass a measure;

* Prohibition of "staggered" director terms.

* Term limits for directors of say 10 years;

* Term limits for the CEO/president, CFO, etc. of say 10 years;

* Mandatory annual mental and physical health evaluations,
including drug testing, of all directors and officers;

* Prohibition of the same individual serving as both board
chairman and president/ceo of a corporation;

* "Initiative" such that a proposal backed by 10% of the share
holders must be presented at the general stockholder meetings for
an up/down vote;

* "Recall" such that any director or officer can be terminated by
a simple majority vote at the next general stock holder meeting,
if the recall proposal is approved by 10% of the stock holders;
and

* Direct stockholder "say on pay" for total compensation,
including perks, bennies, stock options, gross ups, and bonuses,
above some reasonable level, say 20X the previous year's median
adult US income [e.g. 40k$ X 20 = 800,000$], with at least a
simple majority [50% +1] required for approval.

Pigs will fly to the moon in formation before any of this is
enacted.


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).