Thursday, December 14, 2006
You Can Do Something About Greedy CEOs!
CEO salaries have increased 209 percent in the last six years. Last year Barry Diller of IAC/InterActiveCorp. raked in $275 million, Richard Fairbank of Capital One Financial scored $249 million, Nabors Industries head Eugene Isenberg took home $203 million, Yahoo chief Terry Semel came away with $183 million, and KB Home honcho Bruce Karaz got $156 million. Retiring UnitedHealth czar William McGuire took away $1.6 billion in options, in addition to a yearly pay package worth $10.6 million in 2005 alone. This is all happening in an era when wages and salaries have been suppressed for most of us and middle class families have seen their hopes for the future entombed in a mountain of debt. How can these CEOs earn so much? The boards that govern corporations are responsible for awarding CEOs these salaries, but they are not objective and cannot be trusted. According to Rep. Barney Frank, "Boards of directors cannot be relied on because too many are themselves CEOs or they have been hand-picked by CEOs. (Board) directors can do some things well. But being a check on CEOs is not one of them."
As the chairman of the House Committee on Financial Services, Frank wants to reform the way boards operate by giving the shareholders themselves the right to reject excessive compensation. They should have power not just over CEO salaries, but over bonuses, stock options, pensions and many other perks. Frank also wants shareholders to have the power to elect boards, rather than allowing CEOs to pack them with their own friends and cronies. Frank is also pushing for new SEC rules that require fuller disclosure of executive pay, and make it easier to get back incentive pay from CEOs whenever restatements of corporate earnings don't match assumed performance gains. Finally, Frank wants to reform enforcement of Section 404 of the Sarbanes-Oxley Act, which requires corporations to assess their own accounting controls, so that corporations - especially smaller companies - can comply with Section 404 more easily.
Meanwhile, there are lots of ways you can help CEOs and their companies straighten up and fly right. These include:
1) Send an email to SEC Chairman Christopher Cox, Rep. Barney Frank, and your own representatives in Congress, expressing your concerns and outlining the changes you want to see.
2) If you own shares in a corporation's stock, do what you can to kick CEO cronies off the board, and replace them with more responsible and objective members.
3) Contact the SEC and express your support for shareholders' rights.
4) Lobby your Congressmen to support greater scrutiny of the compensation consultants who okay those titantic CEO salaries. Are they getting kickbacks or what? We want to know.
5) Take an active role in shareholder representation. Demand changes. Ask the corporation to make executive pay reform an issue and to bring it to the shareholders for a vote.
Do what you can to keep greedy CEOs from robbing the nation blind!
Go directly to the articles at the link below for more details.
"The coming crackdown on CEOs" from MSN.com
"4 ways you can fight greedy CEOs" from MSN.com