More Financial Aid for CEOs

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A good number of recent corporate scandals have had to do with stock options for CEOs. Paying executives in company stocks gives them heady incentives to focus narrowly on profits and engage in insider trading. (I mean, come on, if you knew your company wouldn’t make its expected quarterly earnings, wouldn’t you sell some stock before the price dipped?) Stock options also give executives the chance to hide their earnings in the technical fine print of annual corporate reports. The most recent spate of corporate wrongdoing involved setting stock options at outdated lower prices, allowing CEOs to maximize their capital gains. (For Mother Jones’ quick and dirty coverage of corporate pay abuses, click here.)

The SEC has had just about enough. Err, scratch that. The SEC wants to make it easier for companies to pay their top executives in stock options and harder for investors to determine just how much they’re handing over. The commission announced the Friday before Christmas (in a move that was clearly not designed to skirt media attention) that it will allow companies to account for executives’ earnings from stock options by spreading them out over the full vesting period. Just this summer, the SEC had demanded for the first time that companies include annual estimates of executives’ stock-options earnings.

That was then, this is now, baby. But Rep. Barney Frank, who is expected to lead the House Financial Services Committee, has cried foul and promises to look into the matter. So perhaps there will be some brakes on the robber barrons’ trains this session.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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