Another Public Company disappears in the Maw of 'Private' Equity

In this age of growing concern about Inequality it is a slap in the face of ordinary investors - let alone citizens - if more and more public companies get gobbled up by financial engineers and their conspirators among dominant shareholders and management. Apart from the problem that benefits of the Private Equity industry are disputed - there was hardly ANY private equity to speak of before the mid-1980s and the world was doing quite well without it - the distributional effects are clear for all to see: Who else but promoters of the industry can spend millions on a birthday party? why should public companies show restraint in relation to executive compensation when promoters and their hired guns in management don't disclose their pay packets? They probably get paid amounts that would sometimes be multitudes of what senior executives in public companies can earn. It is clear that mechanisms to protect public shareholders from having their companies taken away on less than attractive terms are not up to the task. Who cares about Wider Shareownership or the Shareholder Democracy? Rome's decline started when wealth got concentrated in the hands of the few.
(5-August-2019)
Springer Buy-out on track

Anyone still thinks that investment fiduciaries should run Corporate Governance?

Who are the 90% that waved through Lloyds Bank CEO Horta-Osorio's pension? The missing link in the whole debate about corporate governance, and inequality in particular, is the lack of any control that real end investors - the man/woman on the street whose savings are at stake - have over the actions that fiduciaries (and fund managers do NOT own any shares!). And make one guess how fund managers associated with Lloyds Bank voted.
(18-May-2019)
Lloyds wins backing for CEO’s pension — but 10% of shareholders dissent

Amundi investors urged to vote against chief’s pay deal

Major problem for the whole governance debate: The 'Shareholders' as the Investment Management Firms and/or Banks are often mistakenly called are in reality nothing but fiduciaries for the real end investors. But they have disproportionate power over corporate policies - and therefore our whole economic (market? capitalist?) system. This is a relatively recent development - just remember that Fidelity was a comparative midget in terms of AuM just 45 years ago, and Blackrock was only founded in 1986. No one seems to have thought of introducing a mechanism that allows end investors - the real shareholders - to influence - let alone control - the governance policies that are exercised on their behalf by these fiduciaries. To add insult to injury directly or indirectly they pay their fiduciaries twice, once with any management fees and again for farming out governance to third parties, known as Proxy 'Advisers'. Not many savers are informed about the fees that are charged by these advisers and how their performance is measured. At best they provide a fig leaf for the fiduciaries and at worst the fees they receive are an outright waste of money as fund managers should be able to assess companies they invest in in a 360 degree fashion, not just if the price will go up or down in the next five minutes. So to conclude: would the great unwashed public agree to pay CEO's the sums they get paid these days? I think the answer should be obvious.
(11-May-2019)
Amundi investors urged to vote against chief’s pay deal

Should Shareholders have stricter control of Corporate Acquisitions?

News that IBM just concluded a $20 billion bond issue to pay for the acquisition of Red Hat was a reminder for the absurd terms of this Folie de Grandeur (or maybe desperate attempt to halt the decline of Big Blue). Ten times Sales? If that works out I will eat my hat. But on a more serious note, should there be stricter oversight when CEO's gamble with shareholder money? Not only on acquisitions but also on disposals (which often are on terms favourable to insiders in the case of MBO's)?
(9-May-2019)
IBM Sells $20 Billion of Bonds as Market Defies Trade Drag

NO! The GE 'Shareholders' DID NOT approve Executive Pay!

How often do I have to repeat this: it is the financial intermediaries, aka investor fiduciaries, who approved the Pay for the senior GE executives - and most other C-suite staffers. The REAL investors have no say in this matter and the whole corporate governance movement is at best a fig-leaf, at worst a circus to entertain the ordinary citizen watching helplessly.
(9-May-2019)
GE Investors Approve Executive Pay, Reject Independent Chairman

Investor Forum - a secret Society?

Reading the the Investor Forum intervened in the Barclays - Branson battle I tried to find a copy of its letter on the website - but no luck. So one has to ask with what authority the IF takes sides, and why is it not willing to share its opinions or insights with the wider public.
(30-April-2019)
City Forum intervenes in Barclays Battle

Overpaid CEO's are lacking Modesty and Decency

Given the astronomical pay that CEO's and their carefully selected board members (and they all belong to the same Club) award themselves one can only presume that the old fashioned habits of Modesty and Decency have given way to unbridled greed. These pay rises are not simply the result of misconceived economic and business theories but also the reflection of a general decline in moral standards.
(24-April-2019)

What do real end investors want from Proxy Advisors?

A recent survey found that real end investors do not want more political and social activism! The survey also highlights the lack of influence retail investors have in the corporate governance debate. And it should also be mentioned that while 30% of listed shares in the USA are directly owned by the Great Unwashed Public, the remaining 70% are also owned by individuals - albeit via financial intermediaries in all forms and shapes.
(24-April-2019)
Proxy Advisors: What Do (Real) Retail Investors Think?

CEO Pay - how much is too much?

$65 million for Disney's Bob Iger is insane says Disney heiress. And many - if not most people - would tend to agree. But in the heated discussion about CEO pay one question has not been answered: what is the correct level of CEO pay, and how should it be set?
(23-April-2019)
Disney heiress calls Bob Iger's $65 mio pay insane 

The Real Problem with the Carried Interest Tax

Another broadside from a supporter of the status quo. But one aspect is forgotten (on purpose?) in this ongoing saga. For arguments sake let us agree that it is beneficial and fair to give entrepreneurs and investors a lower tax rate on capital gains. But the promoters behind Private Equity are not always putting sufficient funds of their own into the businesses they finance. Taxable income could easily be converted into capital gains if they award themselves a sort of founder's shares at artificially low prices - and voila, when the company/asset is sold they can book a capital gain that is taxed at a much reduced rate. Given the opaque nature of Private Equity one has to assume that this practice is quite prevalent in the industry. In addition, basing buy-out vehicles in offshore tax havens allows even more manipulation of tax levels. So while most of the money managed by 'Private' Equity ultimately comes (via financial intermediaries) from the Public the tax affairs of the promoters are the one aspect that is really private. Maybe a small part of all the noise and energy spent on reforming pay in the listed company sector would be much better addressed to shed more light on the pay practices in the Private Equity business.
(19-April-2019)
Hiking the tax on carried interest capital gains is a lose, lose, lose