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BOYCOTT THE TOO BIG TO FAILS!
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boggsman1



Joined: 24 Jun 2002
Posts: 3512
Location: at a computer

PostPosted: Fri Jan 15, 2010 2:29 pm    Post subject: Reply with quote

mrgybe wrote:
theq wrote:
At the very least, stockholders' equity is totally inflated. I believe that this is what stockholders should be very concerned with.


They absolutely should be concerned..........and it is the stockholders who should punish the management they put in place to steward their investment.............not the government. If management is doing something illegal, that's an entirely different matter, but simple shareholder apathy is not a reason for government intervention.

Yes, in Utopia, this would work. What happens in the real world is that stock prices usually do well in the midst of huge bonus payouts, so the shareholders are happy and complacent, dont want to upset the apple cart. BUT, when the S hits the fan and the shareholders revolt, usually the Bob Nardelli's and Ken Lays of the world have already taken 100's of millions from the company. And its rear view mirror stuff.Then, instead of the shreholders getting their clawbacks, the class action attorneys get the bread.
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boggsman1



Joined: 24 Jun 2002
Posts: 3512
Location: at a computer

PostPosted: Fri Jan 15, 2010 2:33 pm    Post subject: Reply with quote

mrgybe wrote:
theq wrote:
At the very least, stockholders' equity is totally inflated. I believe that this is what stockholders should be very concerned with.


They absolutely should be concerned..........and it is the stockholders who should punish the management they put in place to steward their investment.............not the government. If management is doing something illegal, that's an entirely different matter, but simple shareholder apathy is not a reason for government intervention.

Yes, in Utopia, this would work. What happens in the real world is that stock prices usually do well in the midst of huge bonus payouts, so the shareholders are happy and complacent, dont want to upset the apple cart. BUT, when the S hits the fan and the shareholders revolt, usually the Bob Nardelli's and Ken Lays of the world have already taken 100's of millions from the company. And its rear view mirror stuff.Then, instead of the shreholders getting their clawbacks, the class action attorneys get the bread.
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mrgybe



Joined: 01 Jul 2008
Posts: 2612

PostPosted: Fri Jan 15, 2010 3:53 pm    Post subject: Reply with quote

jpbassking wrote:
mrgybe wrote:
... simple shareholder apathy is not a reason for government intervention.


How about simple shareholder trust? Shouldn't we demand that those we trust with our money are honest and forthright and worthy of that trust and shouldn't we expect some kind of oversight on the part of our elected government in case they are not?


Current law provides stockholders with all the power they need to remove underperforming managers........or to demand that their compensation be restricted. If they choose not to exercise that power they only have themselves to blame.......it's their money that is at stake. The government should only become involved if there is illegal activity........it's not the government's role to monitor incompetence (despite the considerable expertise they have in that area!).
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isobars



Joined: 12 Dec 1999
Posts: 14050

PostPosted: Fri Jan 15, 2010 5:27 pm    Post subject: Reply with quote

jpbassking wrote:
How about simple shareholder trust? Shouldn't we demand that those we trust with our money are honest and forthright and worthy of that trust


ABSOLUTELY!!! But we keep electing muf'fing POLITICIANS to handle our money.
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mac



Joined: 07 Mar 1999
Posts: 5143

PostPosted: Fri Jan 15, 2010 7:54 pm    Post subject: Reply with quote

mrgybe--So blatant conflicts of interest between the bond rating entities and the banks selling tranches is not sufficient evidence of fraud for you? All bets are off when you ask for, and receive, a Federal handout. As they say in the credit card contracts, read the fine print and subject to change.
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mrgybe



Joined: 01 Jul 2008
Posts: 2612

PostPosted: Sat Jan 16, 2010 11:42 am    Post subject: Reply with quote

mac wrote:
mrgybe--So blatant conflicts of interest between the bond rating entities and the banks selling tranches is not sufficient evidence of fraud for you? All bets are off when you ask for, and receive, a Federal handout. As they say in the credit card contracts, read the fine print and subject to change.


I don't know how to say it more clearly..........but I will say it for a third time..........if there has been illegal activity then Federal agencies should step in and pursue those who engaged in that activity. If evidence of conflicts of interest between rating agencies and banks is as clear as you suggest, then the appropriate agency should investigate and prosecute. However, paying someone more than they are "worth" is not illegal. It may be bad business and it may be distasteful........but to suggest that taxpayers should pay for federal agencies to step in to protect the investments of private shareholders who have failed to properly oversee their own management makes little sense.

Companies that received bail-out funds may well be an exception to that general principle........it depends upon the terms under which those funds were advanced........and, indeed, in the case of GM, Chrysler, AIG, the government is a significant shareholder and should exercise their rights in that capacity as should any shareholder.
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swchandler



Joined: 08 Nov 1993
Posts: 5774

PostPosted: Sat Jan 16, 2010 2:01 pm    Post subject: Reply with quote

From my point of view, it's not just the corporate executives and stockholders. How about the employees of these corporations? Are they getting what they're worth, or at least sharing reasonably in the spoils? Frankly, I don't think so. As much as they contribute to the bottom line, they really have no say in what top executives make. When a few individuals siphon huge sums of money in the form of salary and bonuses, irrespective of their actual performance, is that in the best interest of the corporation? Again, I don't think so.

Now, when it comes down to the corporations that received TARP funds, I felt that the government has every right to enter the fray because the American people have become interested stakeholders. However, once a corporation pays back its obligations, the reach of the government is curtailed to a great degree. At that point, the government's interest, strength and influence is realized through prudent regulations.

Still though, there's still the problem of inordinate compensation at the top corporate executive level. In my opinion, the practice needs to be curbed. The way to address the problem is extra heavy taxation on exorbitant incomes. It's pretty simple really. If you want to make a huge fortune, you pay huge taxes. Yet, after its all said and done, these executives would still come out making princely sums of money.
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theq



Joined: 10 Apr 2000
Posts: 636

PostPosted: Sat Feb 06, 2010 4:45 pm    Post subject: Reply with quote

http://misstrade.wordpress.com/2010/02/04/charlie-rose-henry-paulson-former-u-s-treasury-secretary-watch-the-full-episode-now/

Here's Charlie Rose interviewing Hank Paulson the other day. Fast-forward to 46:20 to hear his take on executive and banker compensation, etc.
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