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C » Topics » Advancement Begins with a First Step

This excerpt taken from the C DEF 14A filed Mar 15, 2005.

Advancement Begins with a First Step

 

I believe that the need to take at least the above RECOMMEND step is reinforced by viewing our overall corporate governance fitness which is not impeccable. For instance in 2004 it was reported:

 

•   Richard Parsons was designated a “problem director” by The Corporate Library, an independent investment research firm in Portland, Maine because he was the chairperson of the committee that set executive compensation at Citigroup, a committee with a notorious record of overcompensation under his leadership.

 

•   The Corporate Library also gave our company a:

 

“F” in Overall Board Effectiveness.

“F” in CEO Compensation.

“F” in Board Composition.

 

•  

Anne Mulcahy was designated a “problem director” because she was the chairperson of the

 

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committee that set executive compensation at Fannie Mae, which received The Corporate Library’s CEO Compensation grade of “F”.

 

•   Alain Belda was designated a “problem director” because he was the chairperson of the committee responsible for director nominations at Citigroup, which received The Corporate Library’s Board Composition grade of “F”.

 

•   Our Board had 17 directors-unwieldy Board concern.

 

•   Four directors were insiders when many companies have only one inside director – independence concern.

 

•   Eight directors were allowed to have 15 to 34 years tenure – independence concern.

 

•   CEO pay of $54 million-accountability concern.

 

•   If CEO pay is excessive – this could be a sign that our board is weak in its oversight of our CEO.

 

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