DLS Consulting

Happy New Year!

Progress on a concept called "Say on Pay"

This could be the start of something good. News from the specialty insurance company, Aflac indicates that they are actually extending a courtesy to shareholders to offer them a non-binding vote on the compensation packages being offered to their top management. Many of you will recognize this company's ads on TV featuring the duck who can't understand Yogi Berra. While Aflac tackles this issue head on, most other companies resemble the duck as in ducking the option of letting shareholders vote on management compensation. This is also in contrast to recent rulings by the SEC that have made it difficult for minority shareholders to have a voice in corporate governance.

Not only has Aflac decided to offer this to shareholders, but they are moving it up a year earlier than expected. Instead of waiting until 2009, they will offer the vote this year rather than wait. A company statement included among other ideas, this explanation: "Our shareholders, as owners of the company, have the right to know how executive compensation works," said Daniel Amos, Aflac Chairman. He went on, "the board's action is in keeping with Aflac's longstanding pay-for-performance compensation policy and our commitment to transparency at all levels."

I have never been nor am I now, a major investor or someone who has recommended this stock to clients, but the tone of this is so refreshing. Perhaps it could even be window dressing and maybe they will not follow thru on their promises. Perhaps owning a financial company in this sub-prime and credit mess will not be a good thing. But maybe, just maybe, this could be the start of something bigger than just one company trying to do the right thing. Maybe more openness and transparency with shareholders will lead to better governance and other companies will want to do the same thing... let me dream, it's a New Year you know?

Other MMM's are archived on www.dlsconsult.com and your comments and feedback are most welcome and appreciated... even when you disagree with me! God Bless, Happy New Year!

Please contact Dwight Short if you would like to receive future Monday Morning Messages.

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