Tuesday, November 21, 2006

Some boards are made of wood

I'm talking about boards of directors. For example, the board of FPL approved a deal wherein the company paid 'change of control' bonuses to its executives when a deal was signed, not when it was completed. As a result, shareholders gave up $62,000,000 in bonuses to compensate executives for a deal not made.

And some boards have just been taken by greedy CEOs who have overstated revenue and profits. Over 1000 companies have restated their results so far this year. How many of the executives running these companies have returned bonuses based on numbers that were false? I'd bet it's less than 1%.

No comments: