I'm a lawyer practicing in New York State. I focused on business and tax law in my law school studies. I found myself disgusted by the decision of the Delaware Chancery Court in the Eisner-Ovitz case (PDF). Things have only gotten worse.
More below...
Six hundred top executives at banks who received bailout money received $1.6 billion in compensation. How do we make these Titans of Industry accountable?
Here's a quick method. Buckaroo Hank Paulson could condition receipt of any further funds on an immediate loan from C-level executives and board members of one-half of their personal wealth to the compan(y/ies) they serve with terms of repayment date of at least 10 years out with no interim payments at 0% interest and with sub-common stock recovery. It would be proportionate with three-fifths of the sum going to the company they serve as a top executive and the remainder distributed equally to companies on whose boards they serve. If they serve on no boards receiving bailout money, then the full 50% to the company at which they are a top level exec. If they only serve on boards, then the full 50% will be spread equally among the companies on whose boards they serve.
Doing this would make them personally accountable for the long-term success of their respective companies. And this wouldn't be optional. It would apply to every currently serving executive and board member as well as those who have left the company within the past three years. The Constitution has a clause regarding interference with contracts but it only applies to state governments.
Thoughts?
Thanks for reading.