The Obama administration's plan to replace a majority of the General Motors board casts a light on boards of other companies that have accepted bailout money, and there is at least one similarity at GM (GM), American International Group (AIG), Citigroup (C) and others that have so veered into financial straits.
Troubled Asset Relief Program, or TARP, recipient companies were much more likely than the average company to have had independent directors on the board with social or professional ties to the CEO.
Independent directors aren't employed at the company, and shareholders rely on them to speak up if they see it heading for disaster. New research finds that many of those independent directors have connections to the CEO, including memberships at the same country clubs, attendance at a college at the same time, or volunteerism with the same charitable or non-profit organizations.
Read on.
6 comments:
Americans own 80 per cent shares and we have control. If the company doesn't like it give us back our money or use the door.
Unions are starting to call for Obama to fire the CEO of Bank of America since he fired Wagoner.
Shareholders, employees and citizens need to demand that the ratio of CEOs pay to employee be more equal. If you look at the stats, you can see what happened in America.
The majority of this country lives modestly and continues to cut back everywhere they can. Nothing will change till these CEOs come off their high horses and realize they are not worth the billions they are receiving, even while driving their companies in the ground. The mindset of the CEO is nothing but greed and perks.
The bankers need to take a cue from the protesters in the UK. My 73 year old father even knew about it and yes, we laughed. We knew it was wrong but people are very angry around the world.
BofA CEO To Be Grilled Over Bonuses
CEO Compensation
These fat cats are doing well while the rest of the country struggles to put food on the table.
PS..No offense to kitties.
Anon,
I had posted a couple of days ago that union asked for B of A CEO Lewis to step down. He is also being criticized by shareholders which Lewis acquired Merrill Lynch. He took 20 billion of bailout money to acquire Merrill but lost 16 billion dollars in the last quarter and still gavbe bonuses at the end of 2008. Word is that shareholders will ask Lewis to resign on a proxy in which B of A will have their shareholders' meeting sometime this month.
My feeling is that Lewis will be gone giving that he and ex-CEO of Merrill evidentually are under investigation regarding the merger and bonuses by the NY AG Cuomo.
There was a nice piece on Jim Lehrer news hour tonight about how some surgeons in a hospital I believe in Boston, gave up a small percentage of their salaries because they could afford to, so as to keep the lower wage employees (housecleaning, kitchen etc) because these are the people who need the jobs the most and they could live without that small percentage, but the ones at the low pay could not afford to be laid off.
Also Brandies University did the same thing, the Instructors, only 36% took a pay cut to keep the low level staff that needed thier jobs so badly.
Anyhow, yes these are good stories, where people realize they are making enough, more than enough to live well, and they can give up some to those who make the least amount of pay so they can keep their jobs and/or pay rate, which is hard enough for them to live on. The people who gave up pay, in some instances just 1% realized this small bit on thier part helped those who needed their jobs the most, and realized in this economy these were the ones who struggle the most.
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