Proxy and Compensation Consultants - part of the Problem

Reading this post about some technical aspects related to Equity Compensation Plans makes it clear that advisors are barking up the wrong tree. A simple-to-understand Executive Compensation Plan would make siperfluous the highly technical issues discussed in the post. The main problem is the very level of the compensation dished out to CEO's and higher levels of management.
(18 April 2016)

Blackrock: Governance just PR?

Actions speak louder than words. That is something that Blackrock's CEO, Larry Fink, should keep in mind when he pontificates about Corporate Governance.
BlackRock Wields Its Big Stick Like a Wet Noodle on C.E.O. Pay (New York Times)
(16 March 2016)

Governance stuck in quasi-feudal period

Never underestimate the stupidity of politicians and regulators. France is a particular case, it is masquerading as a Northern Democracy but the mentality is still Top-down, and Who-youKnow is all-important. But the Governance Crowd is the main culprit as the 20-30 largest institutional investors (incl Private Banks) would be able to dictate better rules but instead prefer to chase elusive 'performance' while being absentee landlords. That the great unwashed public, i.e. the REAL owners of the business have no voice/say shows that corporate governance is stuck in a quasi-feudal period. Pro Governance has made specific proposal of improvement and encourages those sympathetic to get in touch.
Investors suffer in the Vincent Bolloré game of thrones (FT)
(16 April 2016)

Citigroup Bonus Cap fails to sway Executive Pay Critics

While I applaud that some observers are rattling the cage in the C-Suite I am afraid the result will at best be an adjustment of some decimals behind the comma. 20 or 22 or 18 million, or whatever the number the CEO and his cronies in the Board decide to be 'fair' compensation to show up at the office, it is a number that is decided in a circular fashion - CEO 'invites' board members, board members 'reward' their buddy and hey presto we are all in this together.
The basic deficiency in Executive Compensation - and more importantly CEO pay - is the fact that the fiduciaries who are now supposed to represent the end investor (be they direct or indirect share owners) are just not doing their job, partly because they are in the same boat - be it as recipients of similar pay packages or because they try to get investment mandates from the pension funds the companies they invest are managing.
Only a dismantling of this nexus will lead to lower Executive Pay. As I suggested before, if just the pay of the CEO is controlled the rest of the executive pyramid will adjust accordingly. CEO pay ( and the 'incentive schemes' which have demonstrably be found to be useless) should always be voted on before it is set for each year (during the Annual Shareholder Meeting). All votes by fiduciaries should be based on proxies received not from some proxy agency that makes up its mind divorced from the desires of the end investor but from real people that are the ultimate owners of public companies.
(9 April 2016)
100 CEOs have more saved up for retirement than 41% of U.S. families combined (ValueWalk)
One would have thought that Apartheid has come to an end, but instead it resurfaced in Executive Compensation

What is Inside Information?

A prominent Fund Manager was recently quoted as saying that he has the mobile phone numbers of most of the CEO's and CFO's his fund is invested in.
I seems strange that the question of inside information has not yet received more scrutiny by regulators as well as the media and industry representatives.
One has to assume that any conversation would lead to at least SOME bit of new information about the business progress these companies are experiencing. This information is by definition not available to the rest of the shareholders, large ones as well as individuals. So it is clear that this state of affairs makes a mockery of the idea of a level-playing field for all investors. Oddly enough fund managers seem to boast of - and expect - access to senior managers. And one has to assume that they are not just discussing the weekend's sportive events.
Even more astounding is the long-established practice that so-called 'sell-side' firms, aka as stock brokers, are the self-appointed gatekeepers and allocate access to company managements to their favoured stock broking clients thus introducing another murky element into the situation.
(1 April 2016)