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In the UK, the Institute of Directors is recommending that the government adopt a requirement for "a binding shareholder vote on remuneration policy ...." <SARCASM>What a good idea. After all, the nonbinding say on pay rules have worked so well.</SARCASM>
From my book Corporate Governance after the Financial Crisis
Professor Jeffrey Gordon argues that the U.K. experience with say on pay makes a mandatory vote a “dubious choice.”[1] First, because individualized review of compensation schemes at the 10,000-odd U.S. reporting companies will be prohibitively expensive, activist institutional investors will probably insist on a narrow range of compensation programs that will force companies into something close to a one size fits all model. Second, because many institutional investors rely on proxy advisory firms, a very small number of gatekeepers will wield undue influence over compensation. This likely outcome seriously undercuts the case for say on pay. Proponents of say on pay claim it will help make management more accountable, but they ignore the probability that say on pay really will shift power from boards of directors not to shareholders but to advisory firms like RiskMetrics. There is good reason to think that boards are more accountable than those firms. “The most important proxy advisor, RiskMetrics, already faces conflict issues in its dual role of both advising and rating firms on corporate governance that will be greatly magnified when it begins to rate firms on their compensation plans.”[2] Ironically, the only constraint on RiskMetrics’ conflict is the market—i.e., the possibility that they will lose credibility and therefore customers—the very force most shareholder power proponents claim does not work when it comes to holding management accountable.
Peter Schweizer's Throw Them All Out
One of the biggest scandals in American politics is waiting to explode: the full story of the inside game in Washington shows how the permanent political class enriches itself at the expense of the rest of us. Insider trading is illegal on Wall Street, yet it is routine among members of Congress. Normal individuals cannot get in on IPOs at the asking price, but politicians do so routinely. The Obama administration has been able to funnel hundreds of millions of dollars to its supporters, ensuring yet more campaign donations. An entire class of investors now makes all of its profits based on influence and access in Washington. Peter Schweizer has doggedly researched through mountains of financial records, tracking complicated deals and stock trades back to the timing of briefings, votes on bills, and every other point of leverage for politicians in Washington. The result is a manifesto for revolution: the Permanent Political Class must go.
It's an incredibly appalling expose of the pervasive corruption on both sides of the aisle in Washington. If you don't come away from it both disheartened and furious, you were not paying attention.
The Arrogance Cycle: Think You Can't Lose, Think Again
What is the arrogance cycle? We’ve just lived through it. As market bubbles build, our confidence level rises (dis)proportionately. Everyone wants in on the action. We want to believe Wall Street, and once we do, the inevitable happens. Like Dr. Frankenstein breathing life into inanimate flesh, investment professionals sought ever more novel ways to create wealth. The only problem was that it was all artificial. In this book, Michael Farr examines the forces at work on individuals and markets and explains in clear, concise, layman’s terms how we got to where we are.
Farr focuses on individual factors—such as rampant consumerism, a sense of entitlement, narcissism, resentment toward the upper class—that combined to create the perfect economic storm. By consulting with leading psychologists and relaying first-hand experience with investment clients, he provides a case study of the arrogant investor. In reviewing failed enterprises like Enron, AIG, Lehman Brothers, and Bear Stearns, as well as the illegal activities of Bernie Madoff and others through the lens of arrogance, the book sheds light on those disasters and offers a means to detect the insidious presence of arrogance so that in the future we can contain the damage before it spreads.
Kraken: The Curious, Exciting, and Slightly Disturbing Science of Squid
Kraken is the traditional name for gigantic sea monsters, and this book introduces one of the most charismatic, enigmatic, and curious inhabitants of the sea: the squid. The pages take the reader on a wild narrative ride through the world of squid science and adventure, along the way addressing some riddles about what intelligence is, and what monsters lie in the deep. In addition to squid, both giant and otherwise, Kraken examines other equally enthralling cephalopods, including the octopus and the cuttlefish, and explores their otherworldly abilities, such as camouflage and bioluminescence. Accessible and entertaining, Kraken is also the first substantial volume on the subject in more than a decade and a must for fans of popular science.
Probably the best popular science book I've read in ages. I'm inexplicably fascinated by giant squid and this book held my attention me from start to finish. Highly recommended.
