Next week US Treasury Secretary Timothy Geithner will announce new laws to shore up US banks. And I would like to see his announcement includes these governance measures to curtail the excess in publicly held companies:
- Cap CEO’s base salary of all companies.
- CEO’s bonus is paid in restricted stock options only. He or she can sell the optioned shares only when he or she is leaving the company.
- The exercise price of the options is the same as the closing market price on the day the executives join the company.
- Executive bonus is based on net profit not gross sales.
- Directors meet the minimum share ownership requirement before joining the board.
- Directors are not allowed to serve more than two boards.
- No CEO or COB should be director of other publicly companies.
- Executives lose their bonus if the company has to lay off employees to survive.
- Company must implement work sharing programs instead of outright layoff. - Ayee
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