If you can read this, either the style sheet didn't load or you have an older browser that doesn't support style sheets. Try clearing your browser cache and refreshing the page.

(HR Report)   Being on the board of directors isn't the shiznit anymore   (mercerhr.com) divider line 48
    More: Obvious  
•       •       •

10828 clicks; posted to Main » on 08 Jan 2005 at 11:41 AM (9 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



48 Comments   (+0 »)
   

Archived thread
 
2005-01-08 10:37:42 AM  
I will take a stab at it...

And I am sure the pay still sucks too
 
2005-01-08 10:40:47 AM  
Oooh those poor poor rich people.

Wait.
 
2005-01-08 10:44:00 AM  
Okay, first registration-required sites allowed as links, and now obvious spelling mistakes?
 
ZAZ [TotalFark]
2005-01-08 10:45:41 AM  
And I am sure the pay still sucks too

Ten or twenty years ago the tax laws were changed so that salaries over $1,000,000 per year are not deductible as a business expense. This has caused a decrease in the number of highly-salaried key corporate employees and an increase in the number of corporate accountants trying to beat the system.
 
2005-01-08 10:48:09 AM  
Obdicut: and now obvious spelling mistakes

It's a part of Fark's initiative to attract more AOLers and WebTV users.
 
2005-01-08 10:54:42 AM  
ZAZ:

This has caused a decrease in the number of highly-salaried key corporate employees and an increase in the number of corporate accountants trying to beat the system.


It also caused a little phenomina called "stock options" which made cooking the books a little more attractive...

See: Enron/Worldcom c.1990's

Another fine example of how using the tax code to screw rich people winds up screwing the not-so-rich.
 
2005-01-08 11:03:09 AM  
But a settlement announced this week, in which 10 former WorldCom Inc. board members agreed to pay $18 million of their own money to settle a lawsuit by investors, suggests that directors may now become a bigger target for angry shareholders.

I realize anybody can be sued for virtually anything, but perhaps they could deflect those angry shareholders by behaving ethically?

They could at least give it a try...
 
ZAZ [TotalFark]
2005-01-08 11:05:23 AM  
I realize anybody can be sued for virtually anything, but perhaps they could deflect those angry shareholders by behaving ethically?

Traditionally large corporations have purchased insurance for directors to protect them against lawsuits.
 
2005-01-08 11:20:01 AM  
2005-01-08 11:05:23 AM ZAZ
...
Traditionally large corporations have purchased insurance for directors to protect them against lawsuits.


Good point, but in my experience, those types of policies that I have seen are generally E & O (Errors and Omissions) policies. I doubt they would protect the directors in the event of illegal or grossly unethical behavior.
 
2005-01-08 11:35:52 AM  
"As a director myself, you kind of say, 'Whoa.' "

Well.....GOOD.

Maybe the life savings of hard working peeps won't go to pay for multi million dollar mansions anymore.
 
2005-01-08 11:46:31 AM  
pssssssssssssssyyyche.
 
2005-01-08 11:48:15 AM  
GraphicAddiction

Well.....GOOD.

Maybe the life savings of hard working peeps won't go to pay for multi million dollar mansions anymore.


Why do you hate rich people?
 
2005-01-08 11:50:27 AM  
Jealousy.
 
2005-01-08 11:53:38 AM  
You know these guys didn't lose out on this deal. They made a settlement offer that must have been less than their total compensation for the work done.

Director and officer (D&O) liability insurance is common, even with small corporations, but the issue here was to hit the guys who misbehaved, and it generally won't cover intentional wrongdoing. The ten directors who were charged turned over a part of what they made and took off with the rest.
 
2005-01-08 11:54:27 AM  
ZAZ:

Traditionally large corporations have purchased insurance for directors to protect them against lawsuits.

Yes, but these policies have changed over time. Some do not cover fraud, insider trading or other vicarious liabilities.
BTW, not all directors are rich and not all commit fraud. The guy in this article obviously is thinking that he could become personally liable financially, if some stupid asshat fellow director decides to commit fraud and the policy is nullified.
 
2005-01-08 11:57:49 AM  
-AmbientFight-

exactly - they got caught and had to give back a percentage of what was swindled --- they still made out.
 
2005-01-08 11:59:11 AM  
"As a director myself, you kind of say, 'Whoa.' "

Well that's exactly what directors are SUPPOSED to do.
If the company is looted on your watch then you should have your ass sued off.
 
2005-01-08 12:00:33 PM  
I'm CEO of my pants, We're a small company but we always come through
 
2005-01-08 12:01:58 PM  
Good...some people need to start being accountable for doing their damn job, it's good they stepped up and took their medicine like men. Not all Boards are as slack as those of Enron, WorldCom, et al, let it be said, but with the pay comes responsibilities. Upper management and oversight functions (such as a Board) need to remember that they serve a critical role in the health and welfare of a corporation and everyone that works for it.

It's not just an adventure, it's a job.

/an entrepreneur with great perspective
 
2005-01-08 12:03:50 PM  
WTF are you talking about, they're stopping an investigation by shelling out money from their pockets to the tune of $17 million?
 
2005-01-08 12:05:53 PM  
praise jesus
 
2005-01-08 12:06:30 PM  
Good, fark these thieving bastards. I wanna be rich, but I'm not willing to be unethical or immoral to get there.

/probably why I'm broke
 
2005-01-08 12:08:03 PM  
I'm sorry, but isn't that like, extortion? By the US. Gov't, to round up cash because the federal deficit is almost as big as my cock now?
 
2005-01-08 12:08:26 PM  
Being one the poorer people in the world, I am apalled by this.
 
2005-01-08 12:08:47 PM  
Time to haul out TheyRule again. See, the thing with corporate boards is that if I appoint you to sit on mine, your friend might invite me to sit on his. It's all a fairly small network of tons of money.
 
2005-01-08 12:10:20 PM  
 
2005-01-08 12:22:27 PM  
 
2005-01-08 12:32:57 PM  
wonder how much the directors made off their stock before they shelled out the 18mil?
 
2005-01-08 12:39:36 PM  
I wonder if shareholders could file a class-action suit against a board that mismanages a company... not through illegal action, but simply through stupidity.

Say a badly planned and implimented corporate initative causes the stock of a company to plummet from $50 a share to $20.

Could the stockholders sue for their $30/share loss if they could show direct correlation between the loss and the board's actions?
 
2005-01-08 12:44:16 PM  
Yea, I bet they're quitting in droves. CEOs are out on the streets, living from paycheck to paycheck. Will they be able to get that Ferrari? Not this week guys... :sniff:... Not this week.
 
2005-01-08 12:57:35 PM  
Being on the board of directors isn't the shiznit anymore

Neither is saying "shiznit."

/really got nothing.
//just wanted to see that brand new TF tag by my name
///purty, ain't it?
 
2005-01-08 01:10:23 PM  
Anyone read the disclaimer at the bottom of the article?
"Persons utilising the hypertext links to access articles should not assume they are entitled to download or copy the articles so accessed, and thus should not do so without ascertaining that they are permitted to do so. Relevant information may be located on the homepage of the linked website."
Huh?
 
2005-01-08 01:48:54 PM  
too2ez:

I doubt they would protect the directors in the event of illegal or grossly unethical behavior.


You're right. Disney is getting sued by its major shareholders for a similar situation. Their CEO in the mid-90's was basically an idiot who cost the company millions, and when they decided to fire him for gross incompetence, they listed it as a "no-fault" termination.. basically that because they said he didn't do anything wrong, he was entitled to his full $140m severance package. Now the shareholders are saying that the directors farked up and they want the money back with interest, almost $200m... not the exact same situation but similar. Directors are liable for incompetence just like everyone else.
 
2005-01-08 01:58:56 PM  
Boohoo! Poor things.
 
2005-01-08 02:17:55 PM  
At least the shareholders are choosing the right target.

Remember when the asshat sharholders for Costco were interested in suing the company because they pay their low level working class employees too well?

Maximize short term profit at all costs... legal and ethical obstacles can be broken down into costs or externalities.

I'm not for big government with its lust for power... but I am equally against big corporation with its legal obligation to absolute greed. Where are these checks and balances? It worries me that it seems like the average person is gets more worked up over a pop star or a religious slight than they do over the exploitation of honest shareholders, employees, the environment and democracy.

Or perhaps I'm just bitter with the corporations I have worked for.
 
2005-01-08 03:10:56 PM  
It must suck to be on the Board of Directors... think about it: you'd have no idea what is going on in the company, have sycophants kissing your ass all the time, have a huge salary for doing nothing, get a really comfortable chair, have everyone doing everything you want the instant you want it no matter if it stalls other important business, and worst of all, you'd have to live with your conscience after laying off 8,000 employees so your stocks can go up 1%.

Fark should start a fund to help those poor Board bastards!
 
2005-01-08 03:31:39 PM  
Yeah, we hate those directors. Curse them... erm... yeah they're really horrible. Boooo. Those awful people who work hard to make their companies successful and don't give me everything I want. It's not as if I surf Fark all day whilst they're paying me.
 
2005-01-08 04:29:29 PM  
ranold: BTW, not all directors are rich and not all commit fraud.

Yup, I agree. I know an ex-director who's being sued as a 3rd party to a contract that her company signed with two others and where one reneged on. Needless to say, her company was liquidated and yet the plaintiff added her to the list of parties just for the sake of it hoping to get something in the settlement.

Let me ask you, how would you like it if you risk losing your house, through no fault of your own, for the actions of another, just because you're associated with them? Even if you didn't end up losing everything, you still have to pay tens of thousands of dollars in legal costs?

Sux doesn't it? You can't believe the scope of director's duties these days. Yeah I agree that the bastards who stole from shareholders should pay, but it would be ridiculous if the laws passed were used by vexatious litigants out to maximise their chances of getting more money.
 
2005-01-08 04:35:38 PM  
I see nothing wrong with that as long as there is proof those board members knew what Bernie was doing and were negligent in their responsibility to investors to do something about it. Considering that board members are heavily invested in the company and probably the lost the most of anyone, I find it that a bit unlikely.
 
2005-01-08 04:39:36 PM  
Unimatrix:

It worries me that it seems like the average person is gets more worked up over a pop star or a religious slight than they do over the exploitation of honest shareholders, employees, the environment and democracy.

Yea, it sucks to have a job and get a pay check from all those evil capitalists. How can they live with themselves exploiting people by offering pay for work.
 
2005-01-08 04:56:05 PM  
Major Thomb:

Yea, it sucks to have a job and get a pay check from all those evil capitalists. How can they live with themselves exploiting people by offering pay for work.


Stop making sense damnit!
 
2005-01-08 05:32:12 PM  
Major Thomb and Dancin_In_Anson

You cats are talking about the good kind of capitalist, not the evil 'lie cheat and steal to enrich myself by screwing over anyone and everyone' kind. There is a difference.
 
2005-01-08 05:35:54 PM  
Feetsza:

You cats are talking about the good kind of capitalist, not the evil 'lie cheat and steal to enrich myself by screwing over anyone and everyone' kind.


Which is the subject of the link on this thread.
 
2005-01-08 06:03:07 PM  
I didn't mean to say all capitalists are evil Major Thomb.
Capitalism gives a dependable motivation to keep the country moving forward (although it is a greed motivation... but its a better motivation than fear or torture, and the only thing in human nature that is dependable).

That said, my 'opinion' is that ethics should not go out the window in the name of profit and progress... but how do you prevent it?
 
2005-01-08 06:17:57 PM  
Unimatrix

That said, my 'opinion' is that ethics should not go out the window in the name of profit and progress... but how do you prevent it?

Laws help, if they're written and executed correctly.

Basically you need to ensure that the market is running smoothly enough so "unethical" behavior is *naturally* punished with bad market performace.

Good example:

McDonald's food is bad for you. Word gets out as people start focusing on healthy food. McDonalds must either offer healthier food or crumble.


Bad example:

Cigarettes are bad for you. Government (that's technically you and me and everyone who pays taxes) decides this is a perfect money-making opportunity and taxes the crap out of it, AND sues the crap out of them for big cash. No one quits because the it is now in EVERYONE'S interest, including non-smokers. Cigarette companies continue with a bad product and lotsa customers.
 
2005-01-08 08:02:57 PM  
Now see, if this kind of thing were more prevalent, I would definitely agree that their salaries were justified since they'd either be forced to redistribute their ill-gotten gains among several share-holders (who may have been screwed over to make the CEO's buck anyhow) and would need the huge sums to keep from being totally annihilated post-lawsuit, or else they'd be ethical and morally upstanding citizens, hence theoretically immune to lawsuits, and would truly deserve to keep the money, though likely such a one would be self-motivated to philanthropy and charity anyhow.
 
2005-01-08 08:07:38 PM  
downstairs
Bad example:

Cigarettes are bad for you. Government (that's technically you and me and everyone who pays taxes) decides this is a perfect money-making opportunity and taxes the crap out of it, AND sues the crap out of them for big cash. No one quits because the it is now in EVERYONE'S interest, including non-smokers. Cigarette companies continue with a bad product and lotsa customers.


I think you forgot, "And to prevent the companies from collapsing, the government gives the money right back in the form of subsidies. After all, it's a major agricultural industry: think of all the farm-machinery manufacturers.
 
2005-01-09 12:54:04 AM  
The problem isn't when they do a good job and get paid heaps - it's when they stuff up and still get paid heaps.

One day, some smart people will figure out that you can offer $500K instead of 20 million and still get people who'll do just as good a job.
 
Displayed 48 of 48 comments



This thread is archived, and closed to new comments.

Continue Farking
Submit a Link »






Report