If EVERYONE does this, and they DO, you get a compensation stairway to heaven for ALL companies. All the “above average” firms get better than average increases, which raises the overall average. Compound this exercise repeatedly for 20 + years and you’ll get the absurdly high comp. differences between regular workers and top management.

That’s why executive comp. consultants are the cause of the executive overcompensation problem.

Changing incentives across the board would’ve certainly reduced bad risk taking and our corporate structure is broken.
However it seems to me you attack the Obama propaganda and rhetoric rather than actual proposals Volcker made. The devil is certainly in the details but let’s ignore the bonus angle or the “tax” label.

The idea behind the fee is that given that TBTF already happened and these guys are effectively insured by USG, they should at least pay the proper insurance premium.

As far as “blaming” proprietary trading. I think you neglect to consider the SIVs and other off balance sheet entities. Even if we agree these weren’t the biggest problems, it is still maddening to see a financial institution (like GS) being able to borrow at discount window rates, lever up and push financial markets in the direction they please.

Lastly as much as you’d like to blame the Fed, it’s certainly a creation of the banking system cartel. Our politicians aren’t smart enough to create this wealth thievery scheme and the bureaucrats and monetarists just want to keep their job.

The real problem is a form of corporate fascism

It’s a huge conflict of interest for board members to oversee their golfing buddies, and I don’t see a way around it.

I think you are being too kind. They only botched their jobs if their goal was the well being of the United States of America. It seems pretty clear that that was not their actual goal. Their actual goal was insulating the well being of the senior executives of Goldman Sachs, JP Morgan, CitiBank, Bank of America, et al. from the natural consequences of their reckless, irresponsible behavior.

That being the case, Geither, Bernanke, and Paulson did a great job. I am sure they will be suitable rewarded by their grateful constituents – ie, the senior executives of Goldman Saches, et al.

Can you provide insight into how large institutional investors vote proxies?

My main concern is this–the largest portfolios are index funds. Managers of those funds have to vote proxies for hundreds (even thousands) of companies, depending on the index/sampling of index. In my opinion, it is impossible for fund managers to vote the proxies in good faith (i.e., be familiar with all of the issues for hundreds of companies).

My assumption is that they just go along with management’s objectives, and this is how shareholders relinquish their obligation of good corporate governance (i.e., they give up their control to fund managers). Is this a fair assessment, or do fund managers really undergo the overhead of researching all proxy issues?

In other words, is bad corporate governance largely an issue of ownership structure?