December 19, 2005

Gov. Jeb Bush Fed Up with Lack of Pay-for-Performance

Here is an interesting article describing a trustees’ meeting during which Florida Governor Jeb Bush and two other state leaders ordered Florida’s public pension fund Tuesday to take a leading role nationally to push for corporate governance reform. They specifically want to target “outrageous” executive compensation and “undemocratic” proxy voting at public companies. The two other state leaders are Republicans hoping to secure the governor nomination when Bush’s term expires.

Told ya that executive compensation was gonna be a political football. First, the Democrats grabbed onto the mantle with it’s recent proposed legislation – now the Republicans are taking a turn…

More on Exec Comp Practices

Here are three more recent newsworthy articles on executive compensation:

– USA Today ran this article on a letter sent to the SEC from a worldwide group of institutional investors regarding compensation disclosure practices

– Yesterday’s NY Times had this column on a CEO who refused a pay raise (and sent this letter to his own compensation committee)

– Yesterday’s NY Times had this column on Delphi’s employees being asked to take huge pay cuts, while upper management implemented a bonus plan for itself

Update on the “Pink Sheets”

If you missed it, Saturday’s WSJ carried an informative article on the recent overhaul of the pink sheets. Here are some interesting points from the article:

– Starting this spring, there will be an elite list of issuers that report more information than legally required

– The changes of the Pink Sheets are so dramatic that an SEC official says the agency is monitoring its progress to make sure it doesn’t accidentally become a stock market.

– As it stands, the Pink Sheets is essentially a publishing company as large investors known as “market makers” pay Pink Sheets to list their bids and offers for their inventory of “over the counter” stocks.

– Pink Sheets issuers aren’t required to file documents with the SEC, though the market makers and brokers that provide quotes are regulated by the National Association of Securities Dealers.

– Pink Sheets now exclusively quotes 4,800 issuers, including several giants that filed for bankruptcy-law protection

Companies Without a Home?

Some thoughts from an introspective and anonymous member: “My wife’s late grandmother belonged to a religious sect that did not believe in formalities, including having a name for the sect. Consequently, some people referred to them as the “no-names.”

The SEC seems to have also created a no-name category. It seems we now have small business issuers, accelerated filers, large accelerated filers and well-known seasoned issuers. However, what is the name for the category of issuer that doesn’t fall within any of these four categories? I think calling them “non-small business issuers, non-accelerated filers, non-large accelerated filers, non-WKSIs” is a a little cumbersome. Also, it is a little strange to be defined by what you are not. Perhaps the SEC should have a name that category contest?”