Throw the rascals out

Angry about executive compensation? Well, don’t be. Because unless you are a shareholder, it’s none of your business. In the US if I start a company, hire somebody and decide to grossly overpay them, it really isn’t anyone’s business but the owners’. Being overpaid may be in poor taste, but it’s not against the law. This country is full of overpaid people and the public may think they do or don’t deserve it, but as long as it’s legal, there isn’t anything the public can do. Are we looking for Socialism to take hold in the US? No thanks. Executives ask for huge amounts of money, the owners (shareholders) pay them what they want, so why should others get angry?

Now if one is a shareholder, that’s another story, and one indeed has the right to be annoyed. But that anger should not be directed at the executives – they asked and they received. Instead it’s the board of directors that should be held accountable. Their responsibility is to provide oversight on behalf of the shareholders. And that’s where the problem has been. Directors have been ignorant, irresponsible, or conflicted. Time to throw these guys out and replace them with people the shareholders can trust.

That process of replacing puppet directors is about to get easier for shareholders. Shareholders can now nominate their own directors rather than just voting for them. Here is FT the story. And here is the overview.

“Under the proposal, shareholders who otherwise are provided the opportunity to nominate directors at a shareholder meeting would be able to have their nominees included in the company proxy ballot that is sent to all voters. Shareholders would also have the ability to use shareholder proposals to modify the company’s nomination procedures or disclosure about elections, so long as those proposals do not conflict with state law or Commission rules.”

So next time you get mad about some executive comp, or other stupid decisions a company makes, become a shareholder, nominate your guy/gal, and throw the rascals out.