Amit Chokshi

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  • Executive Compensation Will Continue To Be a Hot Button Topic in 2007
    It's a hot button topic that nobody does anything about. As can be expected, our government will grandstand and talk and debate about it and nothing will be done or they will do the exact opposite. Just like Bush talking about simplifying the tax code but in reality expanding it by 30%, our government officials can be bought, and/or just don't have the intellectual horsepower to do anything of true value, and/or they use their intelligence to fatten their purses at shareholders expense.

    Your article omits perhaps the biggest gaffe by the SEC this past week with their rule change in regards to reporting compensation through option packages. They didn't even bother to seek public comment before implementing this new rule which takes place immediately. So as investors we can expect more problems with transparency as executives that are granted the same value of option compensation will be able to manipulate the reporting of it based on the vesting schedule.

    So in 2007 we'll see reduced compensation figures since the expense will be deferred over time with no need for real disclosure. The useless board of directors will have their backs covered to continue pouring money into the pockets of their brethren and of course in about 2-3 years some scandal will occur when someone realizes that several hundred million in option expense was put in some cookie jar through and wasn't properly recognized and when shareholders thought some CEO was just getting $10-$50mm in option comp it was really 5-10x that figure.
    Dec 31 13:47 pm |Rating: 0 0 |Link to Comment |View article

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