That's the sound of the CEO hogs feeding at the trough. They are back to their old antics: using the corporate treasury to prop up the value of their stock options & other executive compensation. How?
From the WSJ (Dec. 18 online): "$92 billion: How much companies spent on their own shares in the third quarter of 2010. U.S. companies are finally finding a use for some of the nearly $2 trillion in cash sitting on their balance sheets. In the three months ended September, they spent a seasonally adjusted $92 billion on share buybacks, up 71% from the previous quarter and the highest level since the beginning of 2008, according to the Federal Reserve."
That's $92 billion they are not using to do their jobs, viz. to grow the company and improve its operations. That's $92 billion spent to buy stocks at HIGH prices. In late 2008 & 2009, corporation sold billions in stock to raise money to improve their balance sheets ... at LOW prices. Did any of these CEO-CFO "brains" buy back stock at LOW prices? Nope.
They SELL LOW and BUY HIGH. They refuse to hire good people to improve operations. They (mostly) don't do R&D to create new products.
Stock buybacks don't help the investors in a company; all they do is subsidize the SELLERS - those getting out. This behavior is utterly foolish and stupid, yet the cossetted Boards of Directors approve it. Why? They are part of the same clique in the Ruling Class who think only of their own pay and perks. Use the corporate treasury to pad their compensation? Sure, why not. After all, they all do it.
Compensation policies should SUBTRACT any benefit from stock buybacks from earnings baselines for executive pay.
A reform that could help shareHOLDERS act to improve corporate governance: Mandate secret proxy votes. This would give mutual fund firms the freedom to vote their best interests without extortion threats from corporations to pull 401K business, etc.
We get lousy, corrupt corporate governance because corporate elections are conducted SOVIET style, with the corporation knowing how one votes. Ballot secrecy preserves truly free elections. Give us ballot secrecy in ALL corporate proxy elections.
And we need public pressure to "out" these CEO-CFO hogs and harshly criticize their actions. Free Fraternalism does this. The ideology and practices of Free Fraternalism can bring real change to help the common man and retain his freedom. This is true reform.
A Book Worth Reading
The Montgomery Bus Boycott and the Women Who Started It: The Memoir of Jo Ann Gibson Robinson, Edited by David J. Garrow [ISBN 978-0-87049-527-4] The University of Tennessee Press: 1987], I purchased this book at the recommendation of the person running the gift shop at the Rosa Parks Museum in Montgomery, Alabama. It's a jewel - a diamond - a valuable first hand account of that singular event that propelled Civil Rights onto the national stage. Read it. Learn how a group of intelligent women organized and obtained help to run a bus boycott that led to a Supreme Court decision wiping out segregation laws. Learn how they nonviolently fought State oppression and corruption. And learn the truth behind the legends. This event is extremely poorly portrayed by the modern press.
Tea Parties: read this book. You have more power than you realize, BUT you need to adjust your practices and organize better. You need to get the common man & woman behind you by seeking true reform for ALL. Don't be a tool for the billionaire vikings. Support true reform for ALL.
Word of the Day
"Sectary" - noun [$10]
Sectary means a member of a religious or political sect.
Sentence: Tea Party sectaries need to adopt Free Fraternalism to become a majority party in the US. Modify Libertarian ideas to avoid being a tool for the billionaire vikings; Freedom works, but freedom for the dominant to enserf the common man is one freedom that must be curtailed. Free Fraternalism does that.