[Vision2020] I thought you might be interested in this article

Bill London london at moscow.com
Fri Sep 1 12:29:49 PDT 2006

The critical difference is that corporation board elections are not
democratic (as in one person, one vote).  They are specifically
anti-democratic (as in one share, one vote) with the purpose of keeping
control away from the masses and maintained within the tight circle of upper
managers and wealthy shareholders.
welcome to the real world...the multinational corporations operate well
beyond the reach of law and ethical constraints.

----- Original Message ----- 
From: "Jeff Harkins" <jeffh at moscow.com>
To: "Andreas Schou" <ophite at gmail.com>; <vision2020 at moscow.com>
Sent: Thursday, August 31, 2006 7:59 PM
Subject: Re: [Vision2020] I thought you might be interested in this article

> Granted - but you miss the point again.
> The Board of Directors is elected by the shareholders - to whom the
> BOD members are directly accountable.  Some BOD's may own stock in
> the corporation, but it is not a defacto standard.
> Also, although there are a few exceptions, the compensation of the
> BOD is determined by a vote of the shareholders.
> The company is indeed managed by the owners and duplicity is often
> dealt with harshly by the owners.
> You see, corporations (owners or shareholders) find it in their best
> interest to attract the very best top executives they can afford -
> and that action must meet a market test.  If golden parachutes are a
> standard clause for competitors, it is likely that a corporation must
> match or exceed a package offered to a candidate being courted by the
> competition.
> There is another subtlety that I hope you recognize.  If you are an
> owner in a corporation and you do not agree with the BOD or the
> management or both (it strikes me that this is the situation you find
> yourself in), you can participate in the strategic decisions related
> to the hiring of management and the BOD by exercising the rights
> afforded to you as a shareholder - just don't exercise the proxy.
> Of course, that would require an investment of your time and
> capital.  Fortunately, you have a fall back position - you can simply
> sell your shares and invest in a company that meets your standards
> for determination of executive compensation as well as BOD's that
> advance the long-term strategies consistent with your investment
> philosophy(ies).
> Finally,  Title 4 of the Sarbanes Oxley Act provides additional
> assurance to shareholders that top executives and BOD's member will
> act prudently with regard to the management of a corporation
> (publicly traded firms only).
> At 11:12 AM 8/31/2006, you wrote:
> >On 8/31/06, Jeff Harkins <jeffh at moscow.com> wrote:
> >>The compensation packages for CEO's and other top executives are
> >>negotiated transactions in the marketplace.
> >
> >The compensation packages for CEOs and other top executives are
> >determined by the board of directors' compensation committees, which,
> >itself, is largely composed of other CEOs and top executives. There
> >exists a significant conflict of interest between their interest in
> >the corporation as stockholder and their interest as an executive
> >whose compensation is likely to be later determined by exactly the
> >same person whose compensation they are currently determining. Whether
> >or not it's explicit, there exists a certain element of quid pro quo
> >in executive compensation -- especially when you consider golden
> >parachute clauses, which allow a CEO to fail out of their position
> >several hundred million dollars richer than they would otherwise be.
> >
> >-- ACS
> >
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