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

What purpose do Proxy Advisers serve?

One of the large Proxy Advisers seems to be more than happy to sign off on the compensation of Credit Suisse CEO Thiam. And many institutional investors are similarly content with his pay. But where does that leave the ordinary investor - the great majority is not holding CS shares directly but invests their savings via intermediaries who are really fiduciaries. But how do they insure that their investor's best interests are represented? This is the great deficiency in all the discussions about corporate governance - the real participants have no voice!
(10-April-2019)

Shrinking Universe of Listed Companies - that's why!

No wonder that the universe of listed companies is shrinking. It is much too easy to gain control of companies and take them off the public markets. A tiny number of votes above the 50% threshold should not be allowed to force the remaining shareholders out of their holdings. No wonder that stakeholders are disregarded and sacrificed on the mantra of simplistic corporate constitutions.
(3-April-2019)
Roche fails to get control of Spark

Dual-class voting shares - are our Fiduciaries standing firm?

Canny insiders - with the help of advisers among investment banks - are steadily eroding shareholder rights. There is opposition but it is piecemeal and split. Reality is, if the major fiduciaries in the asset management business would get together and put their feet down this unhealthy development would be stopped very quickly. I would not go so far as to call these structures the biggest threat to financial markets but they are just one more factor behind the continuous increase in Inequality.
(27-Mar-2019)
Dual-class structures biggest threat to financial markets

Who runs our Companies? Proxy Firms? ETF Providers?

A lot of noise had been created about the (supposed) undue influence that 'passive' investors (and ETF providers in particular) may or may not exert on investee companies. But the elephant in the room really are the few proxy firms that dominate voting advice to most investment managers. Apart from the fact that it is unclear how much of an extra burden their fees heap on the charges that the real end investor has to bear (without ever being asked), their 'advice' (basically nothing but another opinion for which they will never be called to account) in many cases ends up in the proverbial waster paper basket as their clients often ignore this expensive advice. Apart from that the self-imposed voting principles that proxy firms publish on a regular basis are devoid of any input from end investors and the wider public (are we not in a new age where wider stakeholder interests should be included in good corporate practice?) (9-March-2019)
Elliott's key proposals for hyundai dealt a blow by Glass Lewis

The 100 Most Overpaid CEOs 2019

This 2019 study is the fifth report by As You Sow. During these five years, what has changed? Quite a bit, and not enough. Significantly, more large shareholders are voting against more CEO pay packages. Those who are not are more isolated and defensive (25-Feb).
As You Sow

UK bank CEOs paid 120 times as much as average employee

The banks made the disclosures alongside full-year results over the past fortnight, ahead of new reporting requirements coming into force next year that oblige firms to set out the ratio of CEO pay to a median UK employee and those in the lowest and upper pay quartiles. (25-Feb)
Reuters

Proxy Advisers - cosy and intransparent cartel

Who gives the handful of proxy advisers to right to set their own 'policies'?
Do they ever ask the real end investor, - and not only the intermediaries that pay hefty fees with other peoples' money?
Why does it seem impossible for real end investors - and the public at large - to find out the fees that are paid to proxy firms so that they can do the work that the financial intermediaries should be doing, i.e. supervising the companies they invest in on behalf of the great unwashed public?
(10-Feb-2019)
ISS Policies on Compensation 

Board Evaluation -but who evaluates the evaluators?

Well intended maybe, but who evaluates the evaluators, and so on...
(10-Feb-2019)

Board Evaluation Disclosures - Council of Institutional Investors