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HP Inc. Message Board

  • pierresimondelaplace pierresimondelaplace Nov 28, 2012 3:45 AM Flag

    Opinions requested from Stock Gurus

    I have an off-the-wall idea I would like to run by you guys.
    I have been pondering the issue of company governance for a while. This actually started when Carly did the Compaq buyout and I watched closely as she manipulated those who controlled the stock voting rights to get them to vote here way. Her bribes of those like Deutche-Bank were well documented but only lightly covered in the back pages of financial papers years after the event. Even the payoffs of HP top employees with "retention bonuses" to get them to go along, and which I also modestly took, was an example.
    This got me thinking. Before the advent of mutual funds, 401ks, and ETFs, the actual stock holders had the voting rights of the stock. The actual owners of the companies then had the voting control over what they owned. Today, those voting rights have been quietly delegated to a small list of fund managers, and the stockholders interests may not be as well served.
    One consequence of this may be the fact that in 1965, the average CEO made 20x what the average worker made, and today it is over 200x. There has been a systematic skimming of corporate wealth away from the stock holders, and towards the executives, Board of Directors, and fund managers.
    Anyways, here is my proposal. A law gets passed that allows any purchaser of a stock fund to assign voting rights to a third party. These parties would woo investors with company governance policies like
    "CEOs must make no more than 40x the average worker salary", or "CEOs get no severance package if they tank the company stock". With online voting, they may also be able to open up specific company votes to the stockholders. The stock fund managers would then focus on selecting their portfolios, and the voting institutions would cater to the stockholders voting preferences. If fund holders chose not to re-assign their voting rights, then the funds would keep them. This would open up a whole new industry using the free market, stockholders might be better rewarded for owning their investments, and corporate malfeasance might be reduced.
    Any comments?

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