WHAT CAN BE DONE TO GET THINGS BACK IN BALANCE?
Here are my recommendations, some of which I have expressed in past commentaries:
- Public companies greater than $500 million in revenue must have independent Boards of Directors. The CEO would be forbidden from being a Board member.
- We need more shareholder activism whereby shareholders pay more attention to executive pay packages and Vote NO where their interests are not taken into account. Shareholders should attend more annual meetings and voice their opposition to exorbitant pay packages directly to the Boards.
- Pay packages should be tied to long-term performance. Pay should be limited where excessive risk (i.e. debt) is used to create profits and pay will be forfeited if profits are proved, in the future, to have been materially inaccurate or illusory.
- Tax all compensation in excess of $5 million at 70% and make all compensation greater than $2 million non-deductible by the paying entity on its tax return.
Please contact me with any comments or questions. I would appreciate your support.
Commentary by Jerry Goldberg, CPA
E-mail address: jerlaurie2@yahoo.com