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)

Bloomberg Chairman sits on Glencore Board

This creates not only a potential governance problem, it also means that the Public cannot be 100% certain that reporting is conducted on arms-length basis. Not without reason a wise man once said that freedom of speech (and media) means that 200 (very) rich can say what they want. Read the last line of this article!

Major Fund Managers to collaborate on Governance

David Walker, a so-called City 'Grandee', suggests in a recent article that major fund managers should extend and intensify the practice of collaboration in order to improve shareholder stewardship. While this is going in the right direction - Pro Governance has for a long time argued that corporate governance can be decided if the top 30-40 investment institutions get around a table - it leaves open the question of how this collaboration should be organized (and more importantly, how its effectiveness should be monitored and judged).
In my opinion, the practice of meetings behind closed doors and endless discussions on an ad-hoc basis would not be acceptable. Only clear and public rules would be able to provide an effective way to police thousands of companies. This would also play into the hands of Mr. Walker's second suggestion, the monitoring of the activities of fund managers with respect to their governance practices.
But in both cases it requires the involvement of the (real) end investor, the savers that invest with pension funds, mutual funds or private banking firms. A survey of fund managers might be a worthwhile endeavour but not if it is just a box-ticking exercise without any further consequences.
Whether the improved shareholder stewardship will lead to greater economic productivity is something that is being discussed (especially in the United Kingdom) for more than 30 years. Intuitively one might think (and hope) so but it if far from being proven, Japan, Korea have done extraordinarily well for long periods of time and their governance practices were (and are) far from perfect.
Your comments please! Or is Corp Gov just a game played for and by insiders?

Multiple Share Classes - Easy Solution

While MSCI mulls over what to do about Multiple Share Classes I see an obvious solution: publish indices with and without these shares and give the investors the choice of yardstick they prefer.
But give end investors the same option, so ask pension fund sponsors and clients of mutual funds and private banks which index they want to have used as a benchmark. (3- Nov-2017)

Shareholder loans, Private Equity and Distressed Investing - change needed

Some call Private Equity and their close cousin, distressed debt investors, nothing but locusts that are out to make a fast buck. This judgment may be overly harsh, but given the short time between investment and exit that is the hallmark of some deals it may be difficult to disprove this judgment.
One are of possible abuse, however, is the treatment of shareholder loans when an investment hits the buffers. Loans from major or especially controlling shareholders should be treated as subordinate to all other claims, pensions, wages, trade creditors and tax authorities.
In the case of Private Equity 'Funds' it should also not be possible that the Fund washes its hands of an investment that had gone sour. The Fund should be treated as a going concern, much like a Conglomerate. This would instill a much higher level of commitment from the PE investors and prevent overly risky investments on the basis of 'heads we win, tails you loose'. (22-Oct-2017)
Sunday Times (Paywall)

Socially Responsible Investing - Just a Fig Leaf?

While it may hurt investors in the pocket, are they not the ultimate responsible party on the way to socially responsible business practises? If yes, can they stay aside when a company tries to squeeze the last dollar out of its product, however reasonable the may be following simplistic principles of capitalism? Or should there be some restraint based on ethical consideration even if it if against full-out profit maximization? What would one say if doctors create a monopoly in heart operations and use every possible legalistic trick to prevent competition thus being able to increase their fees to some astronomical level?

Acquisitions, M+A need more supervision by Shareholders

Another desastrous Acquisition, another fine - but for the wrong victims, i.e. the shareholders. M+A merchants, aka 'Investment Bankers', auditors and possibly management should pay for such failures.

In defense of private equity

Well argued - by a Private Equity Insider. But why don't owners/shareholders not just change the management in underperforming businesses? It would be much cheaper. And why does Private Equity get treated as a fund when it is actually a conglomerate business and should be incorporated as such? (17-Oct-2017)
In defense of private equity

More votes for long-term shareowners?

Something can be said in favor of limiting voting rights for short-term shareholders. It feels intuitively right to exclude those who see shares just as gambling chips. But as always, the devil is in the detail! In particular, what is the right cut-off period?  (17-Oct-2017)
The Long-Term Stock Exchange Is Worth a Shot

Never-ending Debate about dual-class Shares

If the main purpose of dual-class shares is the sheltering of a business from raiders (now calling themselves 'Activists') this can easily achieved by setting a limit to the voting rights of each shareholder. (17-Oct-2017)
Financial Times (Pay Wall)

Procter & Gamble: Who should sit on a Board?

Should a so-called 'Activist' investor with less than 1% of the outstanding shares be allowed to get a seat on the board? On what principles should boards be nominated?

Join the debate or decisions will be made for you while you have to pay for these expensive proxy 'battles'.

Frightening: the games that can be played with our companies

Not enough that companies from what is basically nothing but a dictatorship can roam through our corporate universe, outfits where large and maybe even controlling stakes can be 'parked' with friends make any clear link to good governance less than practicable. Which local community, employee or customer representation will be able to hold these firms to account, not mentioning governments that usually sing from the hymnbook of unaccountable lobbyists.

Pension Apartheid is alive - Equifax CEO leaves with $18 Mio

Juicy Pensions for the Few (Marketwatch)

Fund fees in Regulator's crosshairs

Worthwhile but missing the main target - the management and performance fees charged are the elephant in the room, esp with Hedge Funds and even morse so with 'Private' Equity where management takes out compensation that makes the pay debate at listed companies trivial by comparison.
Financial News (Paid content)

UK White Paper on Governance - a missed Opportunity

The recently published White Paper on corporate governance reform is a missed opportunity argues Richard Buxton, CEO at Old Mutual Global Investors and a veteran investor in UK equities.
In particular
- he doubts that publishing pay ratios will bring much of a benefit
- thinks that giving remuneration committees more powers to oversee total company pay will suffer from the practicalities that will have to be part of the process (forecasting corporate profitability and the valuation of the stock market)
Buxton would like to see an end to LTIP pay schemes and target-based schemes in general in favour of simpler rewards.

ProGov argues for a long time that bonus and incentive schemes should not favour only a narrow group of (top) executives but should be targeted at the total workforce so we are pleased to see that a senior participant in the governance debate goes quite a long way in this direction.
(Daily Telegraph) (PayWall)

Defense against Activists wastes Investor's Money

Why can a company like P&G not just say NO to an 'Activist' speculator who pesters it? If Peltz wants he should rustle up enough votes to hold a shareholder meeting. Apart from that there should be protection against manipulating the shareholder register by stake building, only allow longterm holders to vote. Now THAT would be proper defense against unwanted approaches, it it would cost NOTHING, to the detriment of corporate finance 'advisers'.

NYC Pension launches another box-ticking exercise

Is this just another box-ticking exercise? What would happen if every fund manager starts shooting off these questionnaires to any and all companies it has holdings in? Would the system survive this onslaught? I am sure that it would not as 1000s of companies would have to reply to 1000s of approaches, and not just once but the corporate governance crowd would want to have its piece of flesh every year!
I think the only way something like this could work if there are clear rules and an easy way to monitor them.

Join the Debate! Or is Corporate Goverance just for Show?

NYC Pension Funds Boardroom Accountability Project Version 2.0

The Evolution of Conceptions of “Good” Corporate Governance

Another refutal of the false ideology behind Executive 'Incentive' Compensation schemes. Shame on Business Schools who should be at the forefront of getting rid of these flawed schemes rather than regurgitating the manrta of Maximising Shareholder Value.

Join the Debate! Or is all the Corporate Governance activity just for show?

 Is There Hope for Change? The Evolution of Conceptions of “Good” Corporate Governance

Toys 'R' Us - the REAL Culprits are not mentioned

The 'Private' Equity firms that gamble with the Public's money on the basis of 'Heads we win, Tails you lose' are the real culprits. Rather than put real sweat money into a business they load it with tons of debt - to the max - and hope for the best (a rising market makes everyone a genius). Shame on KKR and Bain Capital, shame on the regulators that neglect the unfair advantages that 'Private' Equity firms get (tax, accounting, liability, employee relations).

Deutsche Boerse pays fine for supposed Insider Trades by CEO

Is this the proper way to handle this investigation? Is it just hush money? And who approves of these payments? Are the regulators complicit in a cover-up? And is there really no other person fit to run what was until not so long ago a quasi-public institution run for the benefit of its users? (Reuters)

Top Execs sell stock just days before bad news is released

When well-paid (overpaid?) top executives behave like this one should not wonder that Capitalism and the Market System increasingly lose public support. It is only fortunate that the average citizen is not really able to properly put such blatant abuse of position into proper perspective. After all, how many do really understand what a million dollars (life changing amount for 99% of the population) means? The maths scores tell a story! And it will be interesting to see how regulators and the trustees of the savings of ordinary people (aka investment managers, private bankers) and the corporate and 'socially responsible' investment crowd are going to do about this.

Fee pressure - who can afford good Corp Governance?

As an afterthought to the previous entry just one question: if more and more assets move to passive instruments and fee income of the investment fiduciaries is under sustained pressure, who can then afford to pay for detailed corporate governance? The work cannot just be done by some second-rate professionals as the task requires detailed analysis, maybe even more so than the task of buying or selling shares at the right time. And letting a few proxy agencies take over the whole process it not that cheap either when you consider wafer-thin fees on passive products. This is apart from the question of who monitors the proxy agencies and competitive aspects if two or three providers dominate the field. Activist Investors to the rescue? But they want more than a pound of flesh! And are their motives aligned with the interests of the ordinary saver and investor?

Who asks the REAL Investor for his opinion on Pay?

All very well for the Investment Association to claim that 'Investors' hold cards for AGM season. But apart from the fact that the season is basically over the big question remains: how much - if any - influence do the real end investors that the article refers to ("those of us who ....through pensions and savings are (trying) to get the best possible return on their hard-earned money") have with respect to corporate governance, and the most critical and topical issue, that of (excessive) executive pay?

Tired old cliches on Exec Pay

UK bosses need high pay to be competitve with US pay? That might be so, but then it is high time that someting is done about pay over there. Ban investment in non-compliant companies (a task for the Index providers if they would not just be chasing $$$ but be responsible, or is talk of socially-responsible investing just that?) or thrown USA out of WTO (again, social dumping parallel, just in reverse). All 'Fiduciaries' that do not put their weight behind reform should be excluded from soliciting investors. And please spare us the comparison with sports or media people, soccer and copyright regulation are also crying out for reform!
Drastic, but do you have an alternative that could work?

Index Providers need Regulation

Removing a company from an Index after it has been suspended from trading for 50 (!!) days, they must be joking! Index providers (esp FTSE, MSCI, S&P) must be controlled, by investment community or by regulators.

Two top Wall St chiefs enjoy $314m share bonanza

So how are the two guys going to support efforts to reign in Executive Compensation? They will not even try, so pseudo 'Fiduciaries' like these (and they are among the largest of them) need to be stripped of their voting power. Let them play the market but not supervise the corporations. More often than not they just are just renting the shares - there is no proper intent of taking the responsibilities of ownership, all governance efforts are purely cosmetic. Jamie Dimon in particular should not rattle on about the problems the USA face, he should just look in the mirror: HE IS PART OF THE PROBLEM!
Two top Wall St chiefs enjoy $314m share bonanza

Will Private Equity Eat Itself?

Not woried about the industry as long as the existing model is not corrected by politics and regulators. Heads I win, tails you loose benefits the promoters, excessive executive compensation shielded from the public's (and ultimate investor's) oversight, what a wonderful world, for the few!
Will Private Equity Eat Itself?

Exec Pay: another dead end

Scrapping performance targets and making CEO's and senior executives long-term shareholders sound like a neat solution to the problem of excessive pay and short-termism. It may help to reduce the latter but still leaves open the all-important question: How high should executive compensation be in the first place. And the corporate governance crowd is silent (or complacent? or both?)

Indexes should not be blind

The importance of Indexes (and their well-paid providers) has expanded dramatically during the past few decades. First it was the institutions which benchmarked more and more products, now it is the avalanche of passive money, not only through ETF's, that hugs indexes slavishly.
But given the fact that the world has become more complicated it can no longer be right to leave value judgements out of index construction. There simply WAS no investment in Venzuela, China etc and not too many people cared about the environment, social issues or human rights a few decades ago.
Investors Have Lost Sight of the Purpose of Indexes - Bloomberg

Hong Kong regulation: Investors beware!

The clocks seem to tick differently in far away places! If any investor is still complacent this report will open his eyes! Particularly timely as MSCI in its wisdom has just decided to open its indexes to some China shares. I guess President Xi won't have time to look into this during his visit to the territory.
This investor called a rout in Hong Kong stocks. Now he has a message for regulators

Disclosing climate-related risk - Metorite impact risk next?

The list of 'risk disclosures' gets longer and longer, will companies be forced to disclose the risk from meteorite impacts next? This will speed up the death of the public company
Dan Yergin on disclosing climate-related risk: Let’s get it right the first time

Biffa - milk cow for financial engineers

Biffa is another round-tripper from listed company, through the hands of financial engineers - banks, investors, lawyers, accountants and even some public relations firms - back to the stock exchange where Joe Public can have another go to make his (small) fortune - until the masters of the universe take the company away again. On another gravy train of fees....Is this a way to run a modern economy that is fair not to the few but to all?

Saudi Aramco IPO - suitable for Widows and Orphans?

Does it really matter where the listing takes place? The more important question must be - given the negligable influence of public shareholders, the uncertainty over the future energy scenario and the huge political risk surrounding the Middle East region, including Saudi Arabia itself, can regulators allow this IPO to end up in the portfolios of savers and pensioners? Of course, the financial intermediaries and Saudi Arabia's oligarchy would laugh all the way to the bank!

Short-Termism Hasn't Hurt Companies Long Term

Just a reminder that one does not exclude the other, and a final question: Where does Short Term end and Lond Term start?
Short-Termism Hasn't Hurt Companies Long Term

Mutual Funds Have Power to Increase Corp Transparency

As Pro Gov never tires to say - the largest 20-30 Investment Fiduciaries have it in their hand to control, change and supervise Corporate Governance in all Listed Companies. Their stakes allow them to assert de-facto control of all shareholder votes. Even the ever-growing 'Private' Equity industry is only private in name only as nearly all their money is provided by ordinary savers.
Mutual Fund Companies Have Significant Power to Increase Corporate Transparency

Snap and the Rise of No-Vote Common Shares

Agree with the author, but how will a ban on non-voting share classes be introduced? As with many Governance issues there is no effective forum to push through reforms and defend the ordinary investor as the Fiduciaries among the investment industry are only providing pious wishes.
Snap and the Rise of No-Vote Common Shares

Harvard professor on Execpay - where is the Solution?

Either the short Q&A  has been poorly devised or the good professor spins clever words but offers no sulution either.
Harvard Business School professor explains the most important problem we have in finance today and how to fix it

Exec Pay Clawback provisions only a sham?

Deutsche Bank's Baenziger not in bonus clawback talks: paper | Reuters

Bilderberg - is it a conspiracy?

No problem with the type of club people want to join. But the REAL problem with Bilderberg is that most members are not there thanks to their personal quality - they are there because of the jobs they are entrusted with, be it in politics or business. As such they are answerable to their constituents or shareholders. Holding secret meetings are in direct contrast to they requirement to be fully transparent to them. Therefore participation should be prohibited.

The Bilderberg 2017 Agenda: "The Trump Administration - A Progress Report"

Who is worse? BA Management or 'Major Investor'

As so often, the representatives of major investment firms, the supposed 'Fiduciaries' for you and me, prefer to throw brickbats from the comfort of anonymity. So they cannot be held to account by their investors. Nearly as deplorable as the reaction of British Airways and IAG management to the disastrous blackout at BA a few days ago. How precious is Willie Walsh really? Should not behind every senior executive stand a qualified replacement that can do the job as well? At least that was the rule in the old German army with respect to their officers. Is it really too much to expect that senior management - lavishly 'compensated' as it is - is held to account?

CEO's manipulate Politics to feather their nest

No surprise, the greedy clique populating the C-Suite in major corporations is abusing access to top-level politicians to feather their nest. But it would be so easy to neutralize this: CEO's are a tiny minority, just the 1000 top execs are facing tens of millions of ordinary workers and savers. So why can exec pay grow to ever more absurd levels? A major factor is the lack of voice that the many have with respect to their financial assets. While they provide the chips for the financial casino their 'fiduciaries' are either inept, don't care or are in cahoots with the CEO's they are investing the funds of their clients in. That the same CEO's are in charge of the companies that provide a major part of their assets under management (pension funds) aggravates the situation. So what is the solution? Political intervention? Or giving the real end investor a deciding voice with respect to how fiduciaries exercise their proxy votes on their behalf?
As C.E.O. Pay Packages Grow, Top Executives Have the President’s Ear

Dual-Class: The Consequences of Depriving Institutional Investors of Corporate Voting Rights

Dual-Class: The Consequences of Depriving Institutional Investors of Corporate Voting Rights

Morgan Stanley CEO Pay nicked through

A $22 Mio pay package for the CEO while ROE is stuck at 8pct - need one say more? Amd how can Morgan Stanley be a 'fiduciary' for billions of investors' funds? Put the fox in charge of the henhouse?

Mutual Fund Companies Have Significant Power

I never tire to repeat: top 20-30 investment institutions have enough clout to dictate significant corporate governance reforms.
Mutual Fund Companies Have Significant Power to Increase Corporate Transparency

Shareholder Lawsuits - an abusive practice

Nonsensical to sue the company YOU own. As the matter stands, one group gets enriched at the expense of the remaining shareholders.
REPORT: RBS is doubling a settlement offer to shareholders who are suing it for its ill-fated 2008 rights issue

Who runs the Show? Are Activist Investors given too much leeway?

News that 'Activist' investor Elliott Management and Arconic settle their longstanding battle should be seen for what it is: a black eye for corporate government. The number of board members handed to Elliott are out of proportion to the stake the firm has in Arconic. Giving investors board seats also creates conflicts of interest - hopes that 'Chinese Walls' work properly may be optimistic. Why create these conflicts when an arms-length relationship would do the job? And what role did the shareholders as a whole play in this 'agreement'? Who consulted them? And can the activist firm be involved in buying and selling the target's shares while negotiations are taking place?
Movers: Arconic and Elliott Settle

Big Investors rubberstamp Dubious Corporate Practices

As I never get tired of arguing, poor corporate governance is mainly due to the failure of the largest 20-30 investors to act as responsible owners. No need for zillions of smaller fund managers and private banks to get involved!
Fair Game: Dubious Corporate Practices Get a Rubber Stamp from Big Investors

End annual Pay Pantomime - some open questions

Richard Buxton's contribution to the Executive Pay debate is more than welcome. It partly supports the reform I have been proposing for many years. But while the CEO of Old Mutual Global Investors demands the end to convoluted Long-term Incentive Plans (LTIPs) he seems to be quite enthusiastic about long-term Equity Awards. To my mind this would only mean that excesses are easily shifted to the latter. It also is not clear why Equity Awards are necessarily a better - or even necessary - tool to align executive compensation with the interests of shareholders and the wider constituency or companies. Designing Equity Awards could be as tricky as designing effective LTIPs. Readers may remember that ProGov supports the end of all discriminatory compensation schemes and perks and the simple combination of salary and a percentage bonus that is awarded on an equal basis to the whole workforce. (15-May-2017)
End the annual executive pay pantomime (Paywall)

Tesco CEO Dave Lewis gets a £2.3 million bonus

This just demonstrates that the whole Corporate Governance Circus is just talk! Discriminatory, Arbitrary, Amoral and - most importantly - ineffective in terms of business management practice and theory! Is only political interference or well-organised naming and shaming combined with customer boycotts bringing an end to this abuse? (13-May-2017)
Tesco CEO Dave Lewis gets a £2.3 million bonus — but its less than last year

IOD pay proposal - nice try but not worth much

Lowering the threshold to force a 'rethink' on executive pay proposals will not achieve much. At best it will force firms to be more careful when submitting incentive plans, but a major change in levels of pay? unlikely! (11-May-2017)
One of the UK's biggest business groups thinks something should be done about executive pay

Overpaid UBS Chairman

American Companies do very well without the expensive decoration of Chairmen, why does UBS have to pay millions to Axel Weber, just to utter comments such as these? They have nothing to do with the bank's business! (8-May-2017)
UBS CHAIRMAN: 'Brexit is a time bomb' and Macron's win 'doesn't mean Europe is out of the woods'

Just Capital: Do Corporations do the "right thing"?

Interesting effort, but would it not be much easier to enshrine high standards in legislation?
nonprofit starts data revolution so corporations do the right thing - Business Insider

Is the American Public Corporation in Trouble?

There may well be agency problems at Public Corporations, though family firms often are also ridden with conflict in the C-Suite, especially between family members. But as long as Private Equity gets favorable treatment from a tax, regulatory and transparency point of view this trend away from listed companies will continue. The irony is that Private Equity needs the public market in order to sell its investments. The question of how citizens and workers can be made part of a capitalist system that is concentrated in a very small number of hands should not be forgotten - it may be the most important question after all!
Is the American Public Corporation in Trouble?

Discussion of individual Pay Awards pointless

I applaud the authors of this article for their diligence. But any discussion of an individual pay award only makes sense if the overall structure of executive compensation is put under the microscope. Was Tillerson paid too much (or too little)? No one knows but it is clear that the CEO of a large corporation must be paid in line with the 'going 'rate. If you think Executive Pay is too high there has to be reform that is based on principles that will be applied to all company pay schemes.
Should Executive Pay Be More “Long-Term”?

One-Element Pay Proposal

The model proposed is a step in the right direction! I like the fact that there is a symmetry in the variable portion of compensation. But as with all good intentions, how will there be any agreement to implement meaningful reform?
Is Executive Pay Broken?

Kleinfeld Letter to Paul Singer - where is the hidden Agenda?

That there will be little - if any - love lost between Arconic's Kleinfeld and Paul Singer should not surprise anyone. But when I read the controversial letter I was left with just one question: What was Singer up to in Berlin during the Soccer World Championship 2006? Apart from that I think the 'Activist' style of Asset Management needs more scrutiny from regulators as well as the Corporate Governance Crowd. Communication between Asset Managers and Companies should be on a fully transparent basis and any motions to change management should be addressed to the totality of shareholders who can then vote on proposals at the Annual Meeting (or extraordinary Meeting if required). Backseat driving should be discouraged as much as possible. And with respect to this letter: can ANYONE find the hidden agenda that so upset Singer and the Arconic Board? I would like to see your comments!

Compensation: Excessive focus on individual performance dangerous

Compensation based on share price development? This is contrary to all sensible pay schemes and one of the main contributing factors to excessive executive pay. Maybe this works in the confines of a small investment boutique but even there it is not clear what the scheme could do to improve the performance produced for investment clients.

Excessive focus on individual performance is inherently dangerous, says Barry Olliff | City A.M.

Sports Direct has chosen a 30-year-old Barnstable shop manager to stand up for staff at the company

Insult to Intelligence! Like the Headmaster selecting the Head Boy, nothing but a poodle! Staff needs proper representation, the old Unions are not up to the job, still stuck in socialist mindset. What is needed is something akin to Activist Investors, Investment Banks representing employees and negotiating on even level with capital owners. So the EBU, the Employee Buy-out is the way to go. Who would ever have thought that a tiny niche, Private Equity, would become the Monster it has become in the past 30 years? Or the MBO that is abused by any number of insiders well placed to take advantage of their position? Both factors key contributors to the growth of Inequality and wealth of the 1%
Sports Direct has chosen a 30-year-old Barnstable shop manager to stand up for staff at the company

UAL: gormless Board will probably do Nothing

At least Wells Fargo threw the book at the CEO when the abusive practices came to light. It will be interesting to see how UAL's Board handles this incident, or the large holders (Vanguard, State Street, Blackrock, you know the culprits) of the shares that basically control most of the large public companies. Unfortunately the Board is beholden to the CEO and not really responsible to the Fiduciaries (fake owners). If it would this incident should get immediate and public attention.
Video surfaces of man being dragged from overbooked United flight

Non-voting Shares: Complete Failure by All!

Politicians, Regulators, Fiduciaries in the Fund Management and Private Banking Industries as well as participants in the Great Corporate Governance Moan are all equally responsible for the growing abuse of non-voting shares or different share classes.

Norway’s oil fund wants CEO incentive plans scrapped

Good intentions, but just scrapping the LONG TERM incentives leaves more than a barndoor open for other abuses.
Norway’s oil fund wants CEO incentive plans scrapped

Another step towards undermining Public Shareholder Model

Regulators stand by (what's new) when the latest step is taken to make Shareownership a get-rich scheme for the well-connected.
Stage-managed Earnings Call at Netflix

No 'credible link' between executive salary and performance

Also morally corrupt, fake economic theory, discriminatory! Shame on Investment Fiduciaries (Banks, Funds etc) that allow this grotesque abuse of power!
MPs: No 'credible link' between executive salary and performance - Business Insider

Coops in Quebec - Model for a more Equitable Economy?

The Coop model is not new and has experienced many failures. But still worth exploring, there might be ways to improve it. Pity our Business Schools and Economics Departments at Universities do nothing but regurgitating old mantras and dogmas. They should try to develop methods to make co-operative ownership more effective.
A More Equitable Economy Exists Right Next Door | naked capitalism

Santander employs staff on contracts that guarantee just 12 hrs work a year

Deplorable? certainly, but that would include regulators, government 'experts' (SRI/ESG) in the 'Ficuciaries' that invest on our behalf. Hear no evil, see no evil? And the CEO sitting there by the grace of Nepotism is fawned on by the gullible Media.
Santander employs staff on contracts that guarantee just 12 hours work a year

Board Members overpaid?

Are board members really worth their money? An interesting take, not politically correct, but there is some truth to it, start at 41 minutes
Hitler on overpaid board members 1940

Shareholder Proxies Could Be the New Regulators

A step in the right direction. But the great majority of votes are cast by Fiduciary Investors (Pension and Mutual Funds, Asset Managers, Private Banks, Insurance Firms and Sovereign Wealth Funds), often relying on input from Proxy Advisers that are responsible to no one. So this is not going to move the Corporate Governance needle that much until there are ways that the real end investor can control how these Fiduciaries cast the votes on his behalf.
Fair Game: Shareholder Proxies Could Be the New Regulators

Pret-a-Manger criticised for offering teenagers sandwiches in exchange for work

Can anyone blame #Bridgepoint for squeezing out the last drop of blood from its employees? Someone has to pay for the outrageous (and secret) 'compensation' and salaries raked in by #PrivatEquity, in many cases in offshore #taxhavens. Time that those 'Fiduciaries' allocating to the businesses are also held to account for what the funds they invest into on behalf of ordinary savers are up to.  #Execpay #Corpgov
 Pret criticised for offering teenagers sandwiches in exchange for work to solve looming Brexit staffing crisis

Credit Suisse CEO Tidjane Thiam made £9.6 million in his first full year on the job

No particular skill in banking required, where are the regulators? all bark, no bite? He should PAY the shareholders who employ him to be allowed to learn on the job! And where are the guardians of good corporate governance? pay restraint?
Credit Suisse CEO Tidjane Thiam made £9.6 million in his first full year on the job

Binding Vote on Exec Pay - another Cop-out

Another slap in the face from our Political Class. It is absurd that the owners of a company do not have the right to control their agents, i.e. the management hierarchy. When will our sleepy fiduciaries (Asset Managers, Pension Funds, Insurance Companies and Private Banks) stand up and fight for the rights of their 'clients' (do they even know what the origin of this word is?)
Stärkung der Aktionärsrechte: Hauptversammlung darf künftig über Vorstandsvergütung abstimmen | private-banking-magazin.de

Thiam kassierte seit 2010 total 100 Millionen

No surprise Credit Suisse may need another capital raise. Overpaid and Underqualified - the worst CEO selection ever? Did the regulators not demand that all senior banking officials need to be qualified for the job? So a hairdresser would also be acceptable to run a bank?
Thiam kassierte seit 2010 total 100 Millionen

Legal & General speaks out on Corporate Governance

Hats off to Legal & General's Sacha Sadan, their director of corporate governance.
Fund managers must be held to account in the same way companies are
While he reiterates a clear commitment to better governance the article raises more questions than answers.

1 He states that "every pension or ISA investor can also get involved to make UK plc better". This certainly is a welcome but HOW can these investors be involved?

2 A major problem with improving governance is the sheer number of issues, companies and investors that need to be engaged. Loading gender diversity (how many investors have ever asked for this? and have they ever been surveyed at all?), climate change, cyber-security and executive pay into the discussion guarantees that little progress is made on ANY of these issues.

 3 To think that the problem of excessive executive compensation can be solved by just asking companies (nicely?) to "explain how much they pay their chief executive" is a road to nowhere as developments over the past years have amply demonstrated. The same pertains to desire to make companies more "accountable" and bring about "cultural change". All very well, but accountable to who, and what cultural change?

4 Fund managers have role to play - this is the understatement of the year. Who but they are responsible for all the problems that are raises with respect to corporate governance? The top 20-40 institutions (Asset Managers, Private Banks) can control all listed companies the moment they would congregate and agree on principles that have to be adhered to.

5 Mr. Sadan states that his firm collaborates with other fund managers and engages with companies on a regular basis. But this is so "discreet" (secretive?) as to be of little effect - even if it would have an effect, how would end-investors be able to verify this? And you may "engage" with your wife, friends etc but the investment fiduciaries act on behalf of the OWNERS, and as an owner you tell your employees - even if it is a haughty CEO - what to do on your behalf.

6 Free riders are a burden on those investment firms that try to make a serious effort with respect to corporate governance. The best solution would be a rating system. Firms will have to clearly state their governance policies and be rated accordingly. End investors could choose responsible firms. There might even be legislation to make funds that do not comply loose any tax or regulatory umbrella.

My suggestions are:

Corporate Governance needs a set of clear, simple and unambiguous rules. Independent Chair or not? Maximum Pay for CEO? Mandatory vote on Pay? to name but a few.
End Investors should be able to vote for a Proxy Advisor of their choice, similar to a party. This could mean that L&G for ex has to allocate x% of their votes to each Proxy Advisor's recommendation. Given the progress in information technology that should not be a major problem.

We would like to hear your comments and suggestions.
As always your Comments are welcome, but please no direct messages - please post your contribution here on the Blog to make sure that others can see it and participate in the debate!

CEO Pay Soars In 2016 - Wages Continue To Stagnate

Another black eye for the inept corporate governance crowd! (21-Mar-2017)
CEO Pay Soars In 2016 As Employee Wages Continue To Stagnate | Zero Hedge

Goldman links Blankfein pay to beating rivals - so what?

All very well, but still leaves the question of ABSOLUTE pay level unresolved. And how is his pay going to be 'adjusted' if he is not 'beating' rivals? and how is the beat being measured? All a meaningless game of mirrors, maybe some brownie points from gullible journalists and media. Any news is good PR? Given that the firm also is the 'fiduciary' for huge numbers of savers - who can only dream of the 'compensation' that Blankfein allows to be paid to him - one would expect a more serious effort with respect to pay reform.
Goldman links Blankfein pay to beating rivals
Trust in Big Business hits new Low (Survey)

Excessive Exec Pay: Unwanted USA Import

Corporate Governance in one country at a time of Globalisation is not going to work. Many nefarious practises (esp with respect to executive compensation) is imported from the USA. Business Schools there are regurgitating fake theories ('Incentivise Top Management a outrance and everything will be fine'), many leading asset managers and private banks are based in America and have little or no interest to adhere to local practises. The need to introduce better standards will only succeed if all major countries and fiduciaries are forced to sing to the same hymn sheet. If laws are difficult to introduce then only ratings that hurt the sales process of fund manager will be an effective interim measure.
A special relationship on high executive pay (FT, Paywall)

Non-Voting Shares Don't Have a Pretty History

History or not, they must be banned. Lame Financial 'Fiduciaries' (aka Investment Managers, Private Banks, Insurance firms, Pension and Mutual Fuds) must state their intention and be rated accordingly. Good Governance must be a first stop for any marketing and sales effort by these firms.
Non-Voting Shares Don't Have a Pretty History

Wells Fargo CEO receives pay bump despite sales scandal

Another slap in the face of the Corporate Governance movement!
Wells Fargo CEO receives pay bump despite sales scandal

Survey: People highly skeptical of the role of big business

No wonder, given that Greed seems to be the main motivator for top executives (16-March-2017)
Brunswick survey on attitudes towards business - Business Insider

Airbnb has no specific plans for IPO yet: CEO Chesky

Thank God for that. The IPO market is a huge destroyer of wealth - for the deplorables that are herded into overvalued new issues while the 0.1% run away with the proceeds. Perversion of Shareholder Democracy. And the retirement savings crisis will not be solved that way either.
Airbnb has no specific plans for IPO yet: CEO Chesky

Mark Tucker: From AIA, Goldman Sachs, and now HSBC

Given that regulators tried to improve the quality of senior managers in banking it is surprising that Tucker's appointment seems to be waved through by officials in London and Hong Kong. He never had a senior position in frontline banking. Being chief beancounter at HBOS in the period leading up to the Crash of 2007-09 is not exactly a badge of honor. What moral authority do regulators no have left? (13-March-2017)
Who is Mark Tucker: From AIA, Goldman Sachs, and now HSBC - Business Insider

HSBC names AIA boss Tucker as chairman

Most American companies do very well without a separate chairman, so why the extra expense? And how can one man really do both jobs properly? Jobs for the boys! (13-March-2017)
HSBC breaks with tradition, names AIA boss Tucker as chairman

BlackRock vows new pressure on climate, board diversity

Let us hope that this is not just a PR exercise. Climate Change is a problem that should really be left to governments. Diversity is a fuzzy word, why not also diversity with regard to religion, political inclination, overall age? And why the preponderance of older execs that just draw an extra retirement cheque?
Exclusive: BlackRock vows new pressure on climate, board diversity

Carlyle Private Equity practices under fire

Seeking profits is what drives private business. But there have to be moral and ethical rules to contain this powerful motive. When a narrow group of people and their anonymous backers in the financial investment community treat employees and the wider public in a way that raises questions they put the whole Private Equity business model under a cloud. After all, the business operates under rules set by legislation and these rules can and should be altered when the model produces one-sided results. (12-March-2017)
Carlyle's Final Screwing of Brintons' Family & Employees

How to curb Board Greed

I am not sure the title for Alex Brummer's article reflects the issue correctly. While the Board sets the pay policy for the CEO it is more the greed of the Chiefs that needs curbing. And what is wrong with Pay Committees is above all the fact that the CEO and existing Boards select new members, so it perpetuates self-control. This is not much different from the Parent Teacher Associations that usually are just a lapdog for the Headmaster.