It's a good thing. I view shareholder activism that's designed to increase shareholder value long term as positive.
It's a novel idea. Where it's unique is that if directors don't meet internally based targets, they get nothing.
The whole idea of parachutes was to keep executives from standing in the way of valid transactions. What they seem to have become, because of their large size, is an incentive to do transactions.
Trading on stock on nonpublic information is legally problematic for the SEC, absolutely. But to get to liability is a pretty long road. It doesn't happen very easily.
Most institutions frown on dual-class stocks.
He has a potentially conflicting fiduciary duty. There may be a way around it, but no matter how thick you slice it, it's still baloney. The next Time Warner board meeting will be interesting.
The issue is on everyone's radar screen now. If you disregard the shareholder vote, you run the risk of a proxy battle.
It's going to be fun to watch. But the real story took place long ago.
At the time, people thought the Gilberts were like Don Quixote. But because of that case, it legitimized the use of the shareholder resolution.
Any time you separate economic interest from voting interests, it leads to all kinds of problems. It lessens the accountability. I haven't heard of any good reason for dual-class stock. I think the proposal will strike a chord with a lot of people.
The board has to decide whether to sell. Thirty-five percent is a pretty big number. They have to decide if that's the right course or they may have a shareholder revolt.
The big question is Was this a failure of internal controls, or a failure of the board itself How did something this large escape their notice
Because of a greater focus on governance, the resignation of a director certainly has a greater weight attached to it. Boards have greater power. In the past, directors just faded into the sunset.
Frankly, once you commit to a job, you should stick with it unless you have an extraordinary reason. You can dissent, but you are not helping by taking yourself out of the equation.
No director anywhere from this point on would want to put themselves through this kind of ordeal that the directors at Disney just went through for eight years. Now boards realize they must be more independent and circumspect.
I do not view this as a negative opinion from a corporate governance standpoint. It should not make those who ignore their responsibilities happy nor should it discourage those who seek greater levels of oversight of directors,
Those are big numbers. Almost a third of the shareholders who voted are expressing discontent.
When they pressure management to defend itself, it creates greater accountability. It forces management to explain its reasoning. The other shareholders can make up their minds whether they agree or disagree. Let the shareholders decide.
That's the debate. No one really knows.
Since severance packages generally are contractual, the issue is not the size of the severance package. The issue is why was the original employment contract structured to allow such a severance package And that responsibility rests in the board.
That would go an awful long way to restoring confidence,
It's entrepreneurial returns for managerial conduct. Exxon was there long before Mr. Raymond was there and will be there long after he leaves. Yet he received Rockefeller returns without taking the Rockefeller risk.
It's entrepreneurial returns for managerial conduct.
The fact that directors might go without pay is meaningful. It shows, on the part of the directors, confidence that the company has a good future.
He's a very bright guy. He'll figure his way out of this. The financial world is a very small place. When you're on the board of a company engaged in financial transactions, this sort of thing may happen.