Friday, October 23, 2009
Government Ownership and CEO Compensation
Given the government's ownership of TARP financed companies, the imposed CEO compensation caps are not surprising. In the past, shareholders of publicly listed companies have tried to do the same using shareholder resolutions and proxy fights. Those attempts have never succeeded. As I explain in my book, such direct control of governance decisions by shareholders can be dangerous. Shareholders do not always share interests with each other. For starters, it's not difficult to imagine what government controlled banks and auto companies could morph into by simply looking at Amtrak, the Post Office, the power utilities,... What would that do for the minority investors in such companies?
at 10:38 AM