On Sun, Jul 22, 2001 at 05:39:37PM +0200, J. van Baardwijk wrote:
> >3) How about having public companies disclose salaries and compensation
> >for everyone, not just the officers?
>
> I don't think that will be very helpful, since it's the officers who get
> the huge raises, not the workers.
It could help the workers to negotiate their salary, and to
compare their salary to what others are making for doing the same
job. Transparency.
> >4) Should it be easier for shareholders to sue the board of directors
> >when the board is negligent in choosing the officers or in determining
> >their compensation? Maybe shareholders should pressure the board to
> >always have a shareholder vote to determine officer compensation?
>
> Rather then being able to sue the board members, wouldn't be easier if the
> shareholders could simply kick out any incompetent board member of officer?
I'm fuzzy on the details, but I think that to some extent, the board
members are already elected by the shareholders (unless someone has
a large enough chunk of shares, then I think they get an automatic
board seat). Anyway, I think being afraid of a lawsuit is a much bigger
incentive to do things right than being afraid of losing your board
seat.
> It would also be a good idea to let the shareholders, or perhaps even
> the workers, determine an officer's salary -- that way he won't get
> a huge salary just because he's a friend of someone on the board of
> directors.
I don't know that the workers will be able to do such a good job of
determining the value of the officers.
> How about option #5: everybody, from the cleaning lady all the way up to
> the president of the board, gets the same raise. If the workers get 4%,
> then the management also gets 4%. It prevents the management from excessive
> self-enrichment, and might lead to somewhat higher raises (say, 5-6%
> instead of 3-4%).
I don't like this option. It does not leave room for some people to get
rewarded more if they provide a greater contribution.
> Option #6: link the raises for the officers to the increase/decrease
> in profits. If the company made 7% more profits this year, as compared
> to last year, then the officers get a 7% raise. This must be applied
> in the other direction too, of course: if the company saw a 7% drop in
> profits, the officers' pay also goes down 7%.
Not bad, but I was thinking that maybe share price would be a better
thing to link to rather than profits. It should encourage at least
slightly longer term thinking.
--
"Erik Reuter" <[EMAIL PROTECTED]> http://www.erikreuter.com/
