Corporate Governance

Excessive Compensation and the Responsibility of the Delaware Courts (Part 3)

By J. Robert Brown

We are always pleased to have converts to the need to reform governance in an effort to make corporate management act in a manner designed to better promote the interests of shareholders.  One of the more interesting converts has been Henry Paulson, the very person who originally tried to block any limits on executive compensation in the Bailout Bill.  It seems that in a talk yesterday at the Ronald Reagan Library in California, "Paulson questioned compensation practices of the financial-services industry, saying policymakers need to ensure those practices don't 'encourage unsafe and unsound risk-taking or reward failure.'"

Given the system in Delaware, there is really only one way to accomplish this:  Federalize the standards for compensation.  That day is coming.

Full post as published by The Race to the Bottom on November 21, 2008 (boomark / email).