I get proxy forms from various companies on a fairly regular basis. They mostly signal elections for new Board members, and usually come with a recommendation by the company as to whom to vote for. I just throw them away. I figure that voting my tiny holdings wouldn't make any difference anyway.
I also have the sneaking suspicion that these elections are easily fixed.
The following scenario is all too easy to imagine: the CEO wants his guys on the Board of Directors, because he knows they will rubber stamp whatever he wants, including the bonus he wants to award himself. He goes to the accountants his firm has hired and tells them that if they want to continue to get business from him, to make sure his guy gets elected. What choice does that leave the accounting firm?
It makes no difference to them who's on the Board; but it makes a huge difference to them whether they get that company's business. They also know that no one will find out: when was the last time you ever heard of someone demanding a recount on a proxy vote?
Newsflash: people will lie if it's in their own best interest.
I'm not even sure similar shenanigans don't go on in Presidential elections.
skip to main |
skip to sidebar
Search Box
Followers
Posts
Blog Archive
-
▼
2011
(289)
-
▼
April
(30)
- UFOs
- The Times strikes again
- The new Jerry Lewis
- Straw Man Department
- Proxies
- Gender differences, Part VIII: Books
- Please stop -- I'm a Malcolm X scholar!
- Head banging
- Grete Waitz, RIP
- Hybristophilia
- Heroism
- "Spending reductions in the tax code"
- "Platoon" revisited
- Abu Ghraib squared
- What influences us most
- Gender differences, Part VI: Attitudes toward sport
- Sociopath alert: Raul Barrera
- The Left, summarized
- Politeness
- Gender differences, Part V: Movies
- The Long Island Ripper
- William Young
- Judging in sports
- Gender differences, Part IV: Driving
- Sociopath alert: Larry Davis
- Gender differences, Part III: Working out
- The SATs
- An open letter to Michelle Obama
- Gender differences, Part II: dress
- What a man should be
-
▼
April
(30)
About Me
- John Craig
- Virtually everyone who knows John finds him completely tactless and insufferably opinionated. He sees himself as refreshingly honest. That said, this blog is still an excellent way to kill time while putting off work. If you're a newcomer, you might find browsing through the older posts an amusing waste of time as well.
4 comments:
You may be right John, but I always make a point of voting against the reappointment of bad boards. The thing that p****s me off is that the professional investors in the pension funds and large asset managers are so passive about the useless standards of governance that permeate the corporate and financial world. They have some clout, but they are part of the club/conspiracy.
G
G --
I think that each corporation is a conspiracy unto itself, and most of the large institutional investors have the same feeling of learned helplessness regarding these "elections" that I do. Unless they're an activist fund which uses their clout (i.e., shares) to get their own people on the board, they're generally going to take a passive role. And in the case of an activist investor, btw, the company knows that they can't get away with the shenanigans they otherwise might, so I would guess that in those cases they're essentially forced to be honest with their counting of the proxies. I also think that most of the mutual and pension funds will only invest in companies they like, with management they like, so are generally predisposed towards going along with whatever the CEO wants anyway.
I think you sound like a Libyan, pre-revolution. Defeatist.
G
G --
That's actually not a bad comparison. Except that the Libyans didn't know what was going on in the outside world, whereas I don't know what's going on in the inside world of corporations.
Post a Comment