Hello to the Newest Wave of Shareholders!
Top level management of publicly traded companies are stomping around and complaining like puppies that are getting the short leash treatment. They are starting to lose significant power over proxy votes that they formerly could bully their way along. Chrysler and their new ownership arrangement will have at least 50% of their shares being voted by an independent board that represents the pension fund of the United Auto Workers and almost a quarter of the shares will be in the hands of taxpayer representatives of our government. But missing from this scene will be the man who guided this company into bankruptcy during the past three years, none other than Robert Nardellli.
You may remember, Mr. Nardelli as the man who also ran Home Depot down from a growth company to an also ran in the retailing business. When Chrysler hired him from the bargain tool department of Home Depot, it was a safe bet that Mr. Nardelli would come out of this company better than almost everyone else and that is true unless you count the hedge funds who shorted Chrysler the day he was hired. Why is there so much angst about the UAW pension representatives on the board you ask? They might try to run the company into the ground you say? Oh yea, that is what the last several managements did isn’t it?
Here is the painful truth! Management of most large companies have become an entitlement program for their personal net worth and they have been using the shareholders as an ATM machine for compensation and benefits. If we are to have capitalism that works, the checks and balances must return and shareholders at all levels will have to start becoming shareholders! Let’s start with two simple issues:
Vote YES on every opportunity you get on “Say on Pay”
Vote NO on stock option requests that do not include a dilution factor on the proxy itself
Will this change all the ills of corporate America instantly? No, it is a start however and if you ever want to see your managements “heal” to shareholders this is a good place to begin the process!
I Corinthians 10:13 (RSV) “No temptation has overtaken you that is not common to man. God is faithful, and he will not let you be tempted beyond your strength, but with the temptation will also provide the way of escape, that you may be able to endure it.”
Monday Morning Message Sent 4/27/09
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