2017: A wasted Year in Corporate Governance

When stories such as these feature prominently in the very first days of the New Year one can only despair about the ineffectiveness of the Corporate Governance Crowd - be it in the Media, Academia, Politics or the Investment Community.
The CEO of Intel clears out most of his share holdings when supposedly he should already be aware of a security flaw in his flagship product.
Some (and I guess a large percentage) of British CEO's earn more in three days than the average worker.
Call it lack of moral fibre, lack of shame, failure of Capitalism or whatever, I go for the collective abrogation of responsibility by our fiduciaries in the Investment Industry, including useless free-riders in the so-called 'consulting world'.
Will 2018 be any better? I would not bet on it - but in the UK at least the wolf is at the door. Apres nous le deluge? seems to be the motto for many.

Widening Share Ownership the right way

Only requiring that incentive compensation is offered to all employees on an equal basis will prevent gaming of executive pay rules by the C-Suite. Strictly tie it to base pay on pro-rata basis. Make base pay subject to vote by all shareholders (or beneficiaries in private funds or indirect holdings, such as investment funds, pension funds or private banking accounts) (21-Dec-2017)
Tax Bill spells big changes for companie's approach to executive compensation

A Simple Fix for Our Massive Inequality Problem

Interesting proposal. But not sure the state should run it. Better to give substantial tax exemption for each individual that receives dividends or owns shares, - maybe up to (Dollar, Euro) one million. And put tax on all other assets at much higher rate (in line with personal income tax rates, i.e. wealth pay proportionally more). As more people are subject to the maximum rate it could be lowered (30%?)  and it would still generate sufficient revenues for the state. (3-Dec-2017)
A Simple Fix for Our Massive Inequality Problem - The New York Times

Should Chinese Companies be given access to 'West'?

Maybe it is too late, but given this kind of news, should Chinese Companies be given access to 'Western' Capital Markets and be allowed to acquire companies (and indirectly extend their sway over huge numbers of employees?). So far the SRI and ESG - let alone the Corporate Governance Crowd - has abstained from expressing strong and clear views on this issue - but given the determination with which Xi and his minions proceed this debate cannot be swept under the carpet forever. Similar concerns can be raised with all other non-democratic states - and please no hair-splitting, we all know an authoritarian society when we see one.
China's Tech Giants help Government surveillance effort (Wall St Journal, Paywall)

CEO's still don't get it!

Interesting snippet about the views of a CEO with a leading bank. "Let's have a review about how the economy is compensated". Nice try Mr. Ermotti, but where shall we begin? This would mean to start a debate about our whole economic system but appears to me to be a diversion from the obvious problem: Why do CEO's get paid so much more than ordinary mortals, even those working in the same company? Tucker might well include other industries in his argument, but for one reason or another he focused on bankers.
UBS' Sergio Ermotti tries to divert attention from banker's pay

Corporate Bullies - what has ESG/SRI crowd to say about it?

With growing concern about ESG and SRI issues in the top echelons of the Investment Industry it would be nice to see some action and not just pious public relation statements and advertising. One may not agree on issues such as the one described in the article, but at least investment fiduciaries should make their position clear.
Stop subsidizing the Big Wind bullies | New York Post

Private Equity Fees - a glimpse behind the curtain!

Most end investors - and even their often gullible fiduciaries acting as 'limited' partners in the Private Equity investment vehicles - are blissfully unaware of the myriad of fees that are charged to the funds they are invested in. So the current spat between some Private Equity big wigs allows a peek into this opaque world. Given that the disputed fees relate only to the money invested by three officials of the funds one can imagine the amount of money that was charged to the proportionally much larger amounts coming from the 'limited' partners (ultimately Joe Sixpack). Surprisingly the critics of executive pay in listed companies are mostly (all?) silent on the goings-on in the 'discreet' world of (not so) 'Private' Equity where most of the money really is invested on behalf of the general public. (16-Nov-2017)

Level of Executive Pay is not addressed!

All very well when some 'Big Names' from the Corporate Governance Crowd point out that pay structures should encourage longer-term thinking in the C-Suite (how long is long enough though). But I still think that the question of absolute pay levels also need to be addressed. Otherwise ANY amount of compensation could be justified if the company has performed well enough. (15-Nov-2017)
Financial News (Pay Wall)

One more nail in coffin for Exec Pay Schemes

No surprise about this report, the logic of Executive Pay Schemes for the few are already discredited. What is needed is action by the top investment fiduciaries, i.e. the largest investment funds, private banks, pension funds and insurance companies. No need for Proxy 'Advisers'. (7-Nov-2017)

Chairmen - expensive decoration?

If the USA gets by without expensive chairmen, why keep them in clover here in the UK? Just a retirement bounty for the old boys? (6-Nov-2017)