If you are still of the belief that Boards of Directors have the best interest of their shareholders in mind – I have bad news for you. Footnoted.org has a great example of Corporate malfeasance perpetrated by the CEO and the Board.
http://www.footnoted.com/buried-treasure/too-early-for-worst-footnote-of-2013/
The board of directors has bestowed a gift to the outgoing Executive Chairman- I am sure it was meant as a nice gesture. In doing a little math, If you owned 100 shares of Apollo Group, worth about $2,000 as of this writing, that gift the board bestowed cost you approximately $5, and about $.75 a year to the uh…, less than needy recipient.
I am sure the board sensed the shareholders of the company would feel just as charitable, because any shareholder of the company over the last 5 years have given away more than that by just owning the stock. Seeing as the outgoing Executive Chairman holds over $200 million in Apollo stock, I guess everyone can understand why he deserves such a heartfelt gift.
Dan, I decided that the most important research I can do is to look at the CEO and the Board for crooks and morons. This is why I hold Costco and avoid Microsoft. Although I don’t believe tha Balmer is a crook he has NO vision. HP keeps hiring women CEO’s and the board keeps firing them. The list goes on.
I agree with both your points – unfortunately honest CEO’s with vision seem to be a rare breed. How should we define honesty? Is Howard Schultz of Starbucks honest? Can you be considered honest to take 50 million in compensation a year (his compensation for 2011)? Or are you just fleecing shareholders?