June 2003 Message
Robert A G Monks

Dear Friend, 

We are at a crisis level for corporate power in the United States. The huge "breach of trust" by Wall Street is continuingly exacerbated by the CEO pay packages. The UK has effectively resisted US practices, but there is no indication of roll back in this country. Much of this has to do with denial - we deny that the CEO pay packages have been "fixed" by a corrupt market. Indeed, the CEOs led the effort to have options accounted for as valueless with the result that compensation committees were able to raise real pay levels in a bull market "at no cost". With the "market" so cunningly fixed, we are insulted by the response - "I know it isn't right, but I have to follow the market". I have attached a letter I sent to Finance Committee member Senator Olympia Snowe in connection with the confirmation of John Snow's nomination to be Treasury Secretary.   [ Letter to Olympia Snowe ] 

The SEC has asked for testimony in connection with the possibility of allowing the direct nomination by shareholders of board candidates. I hope that this invitation was not simply a device to move a difficult subject away from the proxy season to the quieter summer. In any event, I sent them a brief statement with attachments of my own experience running as an independent candidate for the Sears board ten years ago.
[ Letter to Jonathan Katz ]  This is very important, but - frankly - there has been insufficient public attention to the exact nature of the board of directors in the US. In my view, we have an apparent board that is administered by the CEO as another department of the corporation. With that "apparent board", it is plain that independently nominated directors would simply cause confrontation with little benefit. On the other hand, independent directors are essential for a real board. 

Annual Meetings are a ritual that is stunningly repellent. I attach a brief note describing my recent participation in the EXXONMOBIL meeting in Dallas.  [ RAGM Memo ] 

I hope that you have a fine summer. 

Your friend,
Bob Monks
ragmonks@ragm.com