TheCorporateCounsel.net

Whoa, the 78 suggestions filed by Richard Breeden, the court-appointed Corporate Monitor for MCI, with The United States District Court for the Southern District of New York to improve MCI’s corporate governance includes some real “doozys.” They surely will be fodder for much commentary in this blog and elsewhere for some time to come. Among them:

– placement of most of the board’s corporate governance guidelines within the company’s Articles of Incorporation, so that only shareholders can amend them

– establishment of a website “town hall” for shareholders to vote upon resolutions at any time of the year – and without the restrictions imposed by Rule 14a-8; with a mechanism to have certain of these resolutions then placed in the company’s proxy statement for a vote (i.e. so Rule 14a-8 restrictions can effectively be avoided)

– ban on stock options for 5 years; to be replaced by the use of restricted stock (see Microsoft)

– at least one new director elected each year, with a mechanism for shareholders to nominate and hold a contested election potentially each year

– mandatory rotation of independent auditors every 10 years

– 10 year term limits on directors

– maximum limits on executive compensation (any amounts in excess must be approved by shareholders) and elimination of most retention grants

For TheCorporateCounsel.net subscribers, we have posted an interview with Seth Aronson on Recent Developments under the Securities Litigation Uniform Standards Act .