Thursday, December 07, 2006
Why isn't anybody mad as hell? Stockholders in particular should be absolutely incensed with "executive looting". Fannie Mae stockholders were the apparent victims of "executive looting" by Messrs. Raines and Howard, formerly top executives of the organization. The tens of millions of dollars absconded by these two again reinforces the need for improved executive compensation structure and legal accountability.
While a group of "self-serving" individuals work to lessen the enforceability of Sarbanes-Oxley, another case of "executive looting" smacks yet another group of stockholders right where it counts, the investment portfolio. And yes, Fanny Mae is reportedly paying legal fees for these alleged criminals. Here's an idea for extracting just compensation from those found guilty of "executive looting". Stockholders should receive all funds stolen plus accrued interest. "Executive looters" should receive 1 year in prison for each million dollars not returned under the above penalty guideline.
The ability of executives to ransack corporate treasuries, under the guise of performance pay, is only possible because of the lack of accountability in the board room. Board members need to be more accountable for their actions. There are no "free lunches", even in the board room, and rubber stamping the recommendations of management should not be considered one of them.
While a group of "self-serving" individuals work to lessen the enforceability of Sarbanes-Oxley, another case of "executive looting" smacks yet another group of stockholders right where it counts, the investment portfolio. And yes, Fanny Mae is reportedly paying legal fees for these alleged criminals. Here's an idea for extracting just compensation from those found guilty of "executive looting". Stockholders should receive all funds stolen plus accrued interest. "Executive looters" should receive 1 year in prison for each million dollars not returned under the above penalty guideline.
The ability of executives to ransack corporate treasuries, under the guise of performance pay, is only possible because of the lack of accountability in the board room. Board members need to be more accountable for their actions. There are no "free lunches", even in the board room, and rubber stamping the recommendations of management should not be considered one of them.
Labels: Crime in the Executive Suite
