From: DR. SYDNEY KAY [email@example.com]|
Sent: Thursday, September 11, 2003 2:53 PM
Subject: File No. S7-14-03 Electing independent directors
Sydney K. Kay, Ph.D.
5718 Harvest Hill Dallas, TX 75230-1253
ELECTING INDEPENDENT DIRECTORS 8 September 2003
Sir J.E.E. Dalberg said, "Power tends to corrupt and absolute power corrupts absolutely." A CEO who is also Chairman of the Board of Directors has virtually absolute power. As the highest ranked salaried employee, he interjects his position of managerial power into what is supposed to be a totally independent executive governance body. As Chairman, he controls, to a great extent, how the Board operates as well as the issues that come before it. His presence on the Board, even as a Director, let alone the Chairman, is a conflict of interest that destroys the executive independence of the Board.
John Kenneth Galbraith, the renown economist, said "Senior executives in the great corporations of this country set their own salaries....and stock options....with the approval of the Board of Directors they have appointed. Not surprisingly, the Directors go along." (Dallas Morning News, 1-19-00, p.1E) The "Imperialist" (David Broder, Washington Post) CEO/Chairman appoints them, pays them and controls them and, like "Puppets" they give him incredible bonuses and hundreds of thousands of stock options-if not MILLIONS-based on phony-baloney "performance data" year after year after year.
Whom does the "Imperialist" CEO/Chairman appoint? Mostly members of his own rank: current or retired CEOs, Chairmen, Presidents and other Principal Executives, often culled from the "great corporations of this country", who are quite willing to serve as his "Puppets". Back home, they have their own self-appointed Boards of "Puppet" Directors.
And the "elections" are a FARCE. In truth, they are "pre-selected re-appointees" who, well-paid in cash or a combination of cash and hundreds/thousands of stock option shares, have no genuine vested interest in the corporations they direct and should be "home minding their own businesses". There are only as many "candidates"as "pre-selected re-appointees". There is NEVER any opposition and NEVER any solicited input from shareholders. Proxy Statement bios on practically all of the "great corporations of this country" reveal that, combined, the Board will hold Directorships on from 20+ to over 50 other corporations: the "Brotherhood Boards of Flunky (Richard Cohen, Washington Post), Rubber-Stamping (BusinessWeek). Puppet (Dr Kay) Directors".
The solution to electing independent directors? No salaried employees of the corporation shall be on the Board; NOT ONE! The BEST candidates should come from the mutual funds or institutions who own, or represent the ownership of, MILLIONS of company shares; THEY have a genuine vested interest in the financial state of the corporation. They should be solicited to nominate a candidate for a one-year term. (NO STAGGERED TERMS) The slate should have three to five MORE candidates than openings to insure a TRUE election. Since these "candidates" represent the ownership of millions of shares, they also represent the ownership of millions of votes, so their terms of office must be limited. The Directors elect the Chairman. IT'S AS SIMPLE AS THAT!