So I get my proxy notice in the mail form one of the companies in which I hold stock. A certain telecom company. In the section for voting by mail, the board recommends a vot AGAINST the following:
- elimination of stock options
- an advisory vote on executive compensation
- reporting on charitable contributions
- shareholder approval of future severance agreements
- limits on the service of outside boards
- disclosure on compensation consultants
- shareholder approval of future poison pills
All these steps are designed to provide transparency of the board and executives to the shareholders, the owners of the company. But for some reason, the board and it’s chairman, who is also the CEO of the company, is against measures that should be rightfully given to the shareholders. Right now, we have unchecked executive compensation, no disclosure on compensation consultants who recommend compensation, and a host of other issues that leave shareholders in the dark.
Once again, I fully believe that no CEO or other executive within a company, should also have a board seat, let alone being the chairman. It’s the role of the board to ensure and watch over the CEO. How can that be done when the CEO controls the board? Essentially, they’re puppets.