h1

Billionaire says “don’t pay corporate boards”

January 8, 2007

Today’s Tribune carries an article that appeared a week earlier in the LA Times, wherein billionaire Charlie Munger discusses the problem of overpaid CEO’s.  He traces it to corporate directors, who want to keep their CEO’s happy and retain their well-compensated seats.  The solution: “‘If I were running the world, I would not allow directors to be paid at all.'” New laws and regulations won’t solve the problem. “‘I think you can assume that any law will be promptly evaded.'”

Why would a director serve without pay?  Well, the directors are supposed to represent the shareholders.  Wouldn’t a large shareholder want to supervise the management of his investment?  In fact, many of today’s board members own no shares whatsoever, or only as much as they’re required to own to hold their lucrative positions.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: