Relatedly, the AARP Bulletin in its Jan Feb 2010 issue ( Volume 51 Number One Page Six)said:
In 2008, the top five hundred S&P companies put
44.5 billion into stok grants and options for their top execf
39.5 billion to pension funds
Financial service companies the ratio was $2.30 to top executive stock options to employee fund contrivutions.
Boards of Directors are not necessarily aligned wit the long-term share holder--some are paid by management. (One interviewee referred to this as an oligarchy that has hijacked the statement.) We have propsed two solutions here:
- Sortition democracy where the stock holders can approve financial decisions directly. Every payout (including executive) is approved by a sortition jury of the share holders. Thus, if A is a pension holder or 401B holder in Company X, then there is a probability proportional to the number of share sthey indirectly own that they would be asked to sit on a sortition jury.
- Executives should not be able to spend the money in their bonus until quite some time after the executive had joined the firm and become a senior executive. That way one can know the long-term results of the payment.