Advocate: Rein in CEOs!

Fight disinformation: Sign up for the free Mother Jones Daily newsletter and follow the news that matters.


The pro-financial reform organization Americans for Financial Reform (AFR) today sent a letter [PDF] to the Senate banking committee, who’s leading financial-reform talks right now and is expected to release a bill next week, to make sure it includes new oversights and protections of corporate boards—the very leaders, AFR says, who blindly let financial markets implode under their watch:

“Institutional investors have recognized that risk management oversight failures by the boards of Wall Street banks were a central factor in the financial collapse. Moreover, it is well documented that the executive compensation plans prevalent on Wall Street, in which the vast majority of pay comes through stock options and bonuses based on short-term performance, ensured that bank executives reaped huge gains while the housing bubble grew, but suffered none of the downside when their over-leveraged bets and gambles on complex derivatives went sour.”

In a November financial-reform discussion draft in the Senate [PDF], a number of investor protections and executive-compensation crackdowns were included, like giving shareholders a “say on pay” and requiring a majority vote for uncontested director elections, among others. Right now, though, it’s unclear whether those reforms from last fall will make it into the draft being crafted by Sen. Chris Dodd (D-CT), the committee’s chairman, Sen. Richard Shelby (R-AL), the ranking member, and Sen. Bob Corker (R-TN), who joined Dodd after Shelby briefly dropped out of the talks earlier this month.

AFR’s letter is intended as well a counterbalance to recent lobbying efforts, most visibly those by the US Chamber of Commerce, to oppose corporate-governance reform. For instance, Chamber CEO Tom Donahue said in January that the “mad scientists” who created tricky financial instruments (read: synthetic collateralized debt obligations, derivatives, option adjustable-rate mortgages) deserved the high salaries and bonuses they’ve earned in the past. However, AFR goes after Donahue in today’s letter, citing his past leadership roles in maligned companies like Qwest and Sunrise Senior Living, and says his checkered record in corporate governance should cast serious doubt on any of his reform suggestions. “The US Chamber under Mr. Donohue is uniquely unqualified to speak credibly on what corporate governance structures are necessary to protect shareholder wealth,” the letter concludes.

GREAT JOURNALISM, SLOW FUNDRAISING

Our team has been on fire lately—publishing sweeping, one-of-a-kind investigations, ambitious, groundbreaking projects, and even releasing “the holy shit documentary of the year.” And that’s on top of protecting free and fair elections and standing up to bullies and BS when others in the media don’t.

Yet, we just came up pretty short on our first big fundraising campaign since Mother Jones and the Center for Investigative Reporting joined forces.

So, two things:

1) If you value the journalism we do but haven’t pitched in over the last few months, please consider doing so now—we urgently need a lot of help to make up for lost ground.

2) If you’re not ready to donate but you’re interested enough in our work to be reading this, please consider signing up for our free Mother Jones Daily newsletter to get to know us and our reporting better. Maybe once you do, you’ll see it’s something worth supporting.

payment methods

GREAT JOURNALISM, SLOW FUNDRAISING

Our team has been on fire lately—publishing sweeping, one-of-a-kind investigations, ambitious, groundbreaking projects, and even releasing “the holy shit documentary of the year.” And that’s on top of protecting free and fair elections and standing up to bullies and BS when others in the media don’t.

Yet, we just came up pretty short on our first big fundraising campaign since Mother Jones and the Center for Investigative Reporting joined forces.

So, two things:

1) If you value the journalism we do but haven’t pitched in over the last few months, please consider doing so now—we urgently need a lot of help to make up for lost ground.

2) If you’re not ready to donate but you’re interested enough in our work to be reading this, please consider signing up for our free Mother Jones Daily newsletter to get to know us and our reporting better. Maybe once you do, you’ll see it’s something worth supporting.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate