Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
“When I read the causes of the recent unpleasantness, I haven’t seen one single person who has said that the owners of these corporations, including the banking corporations, didn’t seem to give a damn about how they were being run,” Mr. Bogle said in an interview last week. “We own all this stock but we pretty much do nothing.”
That “we” he talks about really refers to those in charge of our retirement accounts, pensions and savings: mutual funds and professional money management firms that, as institutional investors, control 70 percent of the shares of large public companies today.
Such an outsize stake means that the institutions wield great power and influence over corporate America. Yet, as Mr. Bogle points out, few institutions have played an active role in board structure and governance, director elections, executive compensation, stock options proxy proposals or dividend policies at the companies they own.
“Given their forbearance as corporate citizens,” Mr. Bogle said, “these managers arguably played a major role in allowing the managers of our public corporations to exploit the advantages of their own agency.”
I'd hope 401k mgrs assert their influence into reforms for wall street. There is little excuse for multi million boardroom salaries that have no bearing on company performance. Shareholders representing 70% stake have a fidicuary responsibility to scrutinize.
Harborlady, as long as they keep dividends flowing and share price going up the investors will be happy and don't care about CEO salaries.
The Wall Street mentality has changed from long term outlook to the next quarter outlook.
Look at what happens a few weeks before the quarter ends..mass layoffs and in this case (1Q09) an accounting change. There is a pattern there if you look for it. I saw it last year.
How many companies cut their dividend rather than lay off employees ? Not as many as I recall in the last major recessions. There is a different mentality driving the corporations these days.
Until the shareholders start getting hurt they will not demand change at the top.
I've mentioned this before in another thread but it bears repeating. The control happening at the top really disenfranchises shareholders because controlling stock is already in line with that leadership. The proxy votes that go on about policy, changes, or even salaries for the entire board room are futile because it's a rigged game. I'd like to see changes happen there. Not so much that populist sentiments become a tyrant for mgmt, but to remove the scapegoat story you hear in the media when ceo's claim the shareholders made me do it. Reality is the shareholders have little to no control or influence, are routinely in the dark, rarely hear alternatives beyond the recommendations of CEO's and worse... their majority votes get outright ignored. Pletschet: Shareholders ignored on pay issue - Inside Bay Area
Quote:
the College Retirement Equities Fund (CREF), owner of 20.2 million shares of Johnson & Johnson, asked the large health-care products manufacturer for an advisory vote on executive compensation in the proxy... `investors have long been concerned about inappropriate executive compensation and the current financial crisis has highlighted the importance of the link between financial incentives and company performance.''
That's a broad attack, one not necessarily signaling out Johnson & Johnson, which is far from a ``rogue company.'' J&J's stock price fell 10 percent last year, less than the popular averages and indexes, and Chairman and CEO William C. Weldon took a $1.2 million cut in total compensation. But he still came out with $29,392,224 in total intake, including $8,972,360 in non-equity incentive plan compensation, another name for a bonus. Johnson & Johnson is down in price about 13 percent this year through March. Will Weldon take another hit?
I've mentioned this before in another thread but it bears repeating. The control happening at the top really disenfranchises shareholders because controlling stock is already in line with that leadership. The proxy votes that go on about policy, changes, or even salaries for the entire board room are futile because it's a rigged game. I'd like to see changes happen there. Not so much that populist sentiments become a tyrant for mgmt, but to remove the scapegoat story you hear in the media when ceo's claim the shareholders made me do it. Reality is the shareholders have little to no control or influence, are routinely in the dark, rarely hear alternatives beyond the recommendations of CEO's and worse... their majority votes get outright ignored.
A local billionaire told me that the CEO appoints the Board of Directors, and that he appoints the ones that justify his salary to the stockholders.
They in turn get rewarded.
It's a Republican form of operation - You know - the people best qualified to make the pitch, are appointed by the guy that knows which ones are best qualified to make the pitch.
A local billionaire told me that the CEO appoints the Board of Directors, and that he appoints the ones that justify his salary to the stockholders.
They in turn get rewarded.
It's a Republican form of operation - You know - the people best qualified to make the pitch, are appointed by the guy that knows which ones are best qualified to make the pitch.
Chicken egg thing... I almost feel as if republicans have just used this business model as a political model and here we all are with zero accountability. Either way it stinks to high heaven.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
