By Doug Casey in DailyWealth:
With current laws, it's almost impossible for shareholders to dethrone management - even if they grant themselves huge salaries, giant options, and insane bonuses. That's because shareholders would have to mount proxy battles at a huge expense, while management defends itself with the shareholders' treasury. Have you ever noticed on a proxy that you as a shareholder can only vote "For" or "Abstain" for a director nominated by management, while it's impossible for shareholders to put forward a new slate?
Some of this is likely attributable to the simple fact that most shareholders don't directly own shares anymore. Rather, their investments are held through pension funds and mutual funds, which rarely get involved in trying to correct management; if they don't like it, they just sell the shares and management goes on its merry way.
Even so, my basic contention stands - that the people who rise to the top in large corporations are exactly the same types that rise in government. As a case in point, I offer Edward Liddy, the CEO of AIG, the ex-director of Goldman appointed by his crony Hank Paulson to run the company last year. He impresses me as a particularly duplicitous and smarmy bastard...
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