LETTER: Old boys’ club behind excessive executive pay
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I hope Nathan Cheiman's letter on CEO pay was written tongue-in-cheek (Give CEOs their due (, September 2). If not, it perfectly reflects what is wrong with the attitude of company directors in SA and elsewhere.
As I understand the matter, directors are appointed by the shareholders, and the “old boys' club” in many instances, and remunerated by that company's remuneration committee, also appointed by the old boys' and fellow directors' club. The people who do the real work are noticeably absent from this cosy dog-feeds-dog arrangement.
At the AGM the shareholders are required to approve the payments the directors make to themselves. Yet it is the shareholders who are entitled to the profits of the company, not the directors. The directors are required by law and custom to act in the best interests of the company.
I look forward to the day when a group of shareholders get together and launch a court application on the basis that overpaying directors for many years was not in the best interests of the company, by reference to its performance, and so the directors must regurgitate some or all of their greedily and inappropriately taken income.
Robert Stone, Linden
JOIN THE DISCUSSION: Send us an e-mail with your comments. Letters of more than 300 words will be edited for length. Send your letter by e-mail to letters@businesslive.co.za. (mailto:letters@businesslive.co.za) Anonymous correspondence will not be published. Writers should include a daytime telephone number.
As I understand the matter, directors are appointed by the shareholders, and the “old boys' club” in many instances, and remunerated by that company's remuneration committee, also appointed by the old boys' and fellow directors' club. The people who do the real work are noticeably absent from this cosy dog-feeds-dog arrangement.
At the AGM the shareholders are required to approve the payments the directors make to themselves. Yet it is the shareholders who are entitled to the profits of the company, not the directors. The directors are required by law and custom to act in the best interests of the company.
I look forward to the day when a group of shareholders get together and launch a court application on the basis that overpaying directors for many years was not in the best interests of the company, by reference to its performance, and so the directors must regurgitate some or all of their greedily and inappropriately taken income.
Robert Stone, Linden
JOIN THE DISCUSSION: Send us an e-mail with your comments. Letters of more than 300 words will be edited for length. Send your letter by e-mail to letters@businesslive.co.za. (mailto:letters@businesslive.co.za) Anonymous correspondence will not be published. Writers should include a daytime telephone number.