What’s Up with GM’s Board?
What’s going on with the General Motors board? Are they overreaching? They forced out Fritz Henderson, a CEO who according to them was doing a “remarkable” job. Do they think changing the CEO will get people to buy GM cars?
Why don’t they build cars people want?
Ed Whitacre, the Chairman, apparently wanted to be CEO. Once he started to appear in the GM ads, Fritz Henderson’s tenure as CEO was doomed. Well, at least Mr. Whitacre got what he wanted.
-JM, 12/20/09
Bank Executive Kvetching
The news is filled with stories of kvetching bank executives whose banks took TARP money. They complain about government interference with their compensation. Socialism, no less!
In fact, they are the ones responsible for breaking the capitalist system chain. Pure capitalism dictates that their banks should have failed and they should have been out on the streets – unemployed; no compensation. After all, it wasn’t the government’s stewardship that took on risky loans; it was theirs.
Personally, I don’t advocate the government running a private business corporation, but when that company’s board and management take public money to avoid the consequences of their own management, sympathy isn’t my response. After all, not all banks failed or teetered on the brink or had to take TARP money.
Taking TARP money because of the need for the bank to perform its services to society puts those bank executives in the category of other public servants – albeit paid a lot better, even with the restrictions.
-AR, 12/18/09
How Much Power Should Shareholders Have?
The Financial Times reports today that “The Laborers’ International Union of North America, whose pension funds manage about $30bn, said it had filed proposals with 14 companies asking them to detail their succession planning policies and put them to a vote in their annual meetings.”
How will shareholders know what succession plan works best for their company? What will a “no” vote on a succession policy mean? How will the company know what needs to be corrected to win shareholder approval?
There is a balance here somewhere. The basic corporate deal is that shareholders are insulated from liability if they stay out of management. If they are going to make management decisions, maybe some thought should be given to removing some of their insulation.
- JM, 12/18/09
