When Qualcomm Corp. said last week it would require all of its directors to come up for election each year, it became the latest in what is turning into a growing trend to declassify boards of directors. The telecom equipment company joins other major companies that have until recently stubbornly resisted this policy, including Morgan […]
Stephen Taub
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Nortel Giveback Shows Pressures To Return Bonuses
When Nortel Networks last week reported its long-awaited restatement of results from 2001 through 2003 stemming from an accounting scandal, it also announced that 12 senior executives agreed to return about $8.6 million in bonuses awarded in 2003. “While none of these executives was found to have been directly involved in the inappropriate provisioning conduct,” […]
Posted inBoards & Shareholders
Lead Independent Directors Surge At The S&P 500
Walt Disney is the latest among a growing number of companies that have agreed to separate the chairman and chief executive officer positions. On Jan. 6, the media giant said it agreed to amend its corporate governance guidelines to formalize the policy. Nappier As a result, Connecticut Treasurer Denise Nappier said the Connecticut Retirement Plans […]
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FASB Expensing Rule Impacting Other Equity Awards
When The Financial Accounting Standards Board last month delivered its final statement on share-based payments, most news accounts focused on the impact on stock options, which now must be expensed in the first annual reporting period beginning after June 15, 2005. Generally overlooked, however, is how the new standard—officially called Statement No. 123: Share-Based Payment—might […]
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Defined-Benefit Plans Face New Attacks
Defined-benefit pension plans are encountering a new wave of assaults. In “DB” plans, an employer promises to pay a set amount to a retired employee based on a pre-determined formula, usually tied to the employee’s years of service and salary before retiring. The latest attack on defined benefit plans came last month, when the United […]
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Proxy Access Returns: AFSCME Targets AIG, Kodak
The American Federation of State, County and Municipal Employees pension plan said it will submit binding proxy access proposals at insurance giant American International Group and Eastman Kodak. McEntee “We believe that insider influence on the AIG board has prevented it from effectively monitoring its business practices and providing needed checks and balances on executive […]
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Will So-Called Tally Sheets Become A Disclosure Item?
Compensation committees are increasingly using so-called “tally sheets”—also called “total awards” by some—to get a better handle on exactly how much money top executives and other employees are costing their companies. The tally sheets are not exactly a sophisticated exercise drawing on complex computer programs; rather, they typically require the scorekeepers to “tally” the total […]
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Activists On Defensive, But No Step Back For Governance
According to press reports, a series of recent, unrelated events may deal a big blow to the activist investor movement. In just the past few weeks, Sean Harrigan was ousted as president of the California Public Employees’ Retirement System; Roy Disney and Stanley Gold decided not to further pursue their aggressive tactics toward Walt Disney; […]
Posted inAccounting & Auditing
Two Cos. Hire CFOs From Unlikely Place: Their Auditor
In the past month, two companies announced they had tapped their new chief financial officers from the auditing firm with which they were doing business. At the surface, the move appears to be a violation of Securities and Exchange Commission rules regarding auditor independence. But closer inspection shows that—though the new executives were indeed employed […]
Posted inBoards & Shareholders
Court Issues Ruling Regarding Statute Of Limitations
A Federal Appeals Court ruled that lawsuits can’t be brought in cases where the statute of limitations expired before the Sarbanes-Oxley Act became law on July 30, 2002. Section 804 of the landmark legislation had extended the statute of limitations for federal securities fraud to the earlier of two years after the discovery of the […]