Investors For Director Accountability Organization

Do Audit Committees bother to obtain independent financial analyses of their respective company's financial statements? In the Enron case, our analysis showed financial distress and probable manipulation at least 2 years before Enron petitioned the bankruptcy court for protection.

Les Greenberg
http://www.ConcernedShareholders.com/CCS_FSA.html

It appears as if many of the major institutional owners of Pfizer, having conflicts of interest as fiduciaries of Pfizer employee benefit plans, actually cast their votes FOR the compensation committee members. We need to assure that the real owners learn of this and instruct THEIR trustees to act in the interest of beneficiaries.

I am a strong believer that until directors can be challenged for their seats on a level playing field by challenger candidates–– accountability by directors to shareholders and other corporate stakeholders will continue to be be elusive.

This will require a big overhaul of proxy voting rules. But there are right-actions that investors can take now while we wait for the political and regulatory machinery to "catch up" with reality.

I direct your attention to www.votepal.com, and our four-year campaign to run worker/customer/stockholder candidates for the board of Alaska Air Group, Inc. We are blazing some new trails with the U.S. SEC, NYSE, state of Delaware and proxy voting contractors like Automatic Data Processing, Inc.

We must not just withhold votes for incompetent and self-serving directors; we must prepare slates to run against them and REPLACE them. We have proven it can be done efficiently and affordably.

Only then will we witness significant change on the corporate landscape, in my opinion.

These are critical issues, because these numerous occurrences of corporate malfeasance are putting a dampener on our whole economy. When wealth gets this concentrated in the hands of an unaccountable elite, there's not enough money left over for basic consumption of what we're all producing.

One last point: You want to start a whole new way of generating legitimate economic activity? Permit and encourage anyone who meets certain minimum requirements to run for corporate board seats. This can be done without disrupting the daily goings-on of the corporation. This could be big business, and money could be made while reforming the system and benefiting all investors and stakeholders.

This is NOT something revolutionary. It is just basing corporate existence and operations using the U.S. political system of governance and equal rights for all.

Regards,
Steve Nieman

Please do not construe this communication from Steve Nieman as a solicitation for proxies for any proposal(s) or board candidate(s) dealing with Alaska Air Group, Inc. or any other company. This writing is for educational purposes only. For further clarification or if anyone seeks additional information, please email or write to Box 602, Brush Prairie, WA 98606; fax (360) 666-6483; phone 1-866-2VOTEUS (1-866-286-8387). Thank you.

"As disgruntled investors are turning up in force at company annual meetings this year to demand better corporate governance and, in particular, some restraint in executive pay, the challenge to Pfizer illustrates both signs of progress in their fight, and how much more work remains if they are to get their way. … Few actual changes have resulted. … In the first statement from the floor, Daniel Pedrotty, an analyst in the AFL-CIO's Office of Investment, challenged Mr. McKinnell's expected pension award as 'pay for failure.' … The Pfizer meeting and a series of similar confrontations planned at annual meetings in coming weeks, however, demonstrates a renewed effort to make change through shareholder votes. … Union pension funds in particular 'are leveraging their share ownership to make their points during annual meetings,' she (Carol Bowie, director of the governance research service for ISS, a proxy-advisory firm in Washington) adds. … Noisy activism during annual meetings is on the rise among union members…. Governance watchers expect similar fireworks by unions, retired employees and social activists at several other major concerns this year." (WSJ, 4/28/06, "Pfizer Meeting Gives Dissidents Voice, Not Votes") Some irate Shareholders are getting closer to manning the barricades, but close only counts in tossing horseshoes not tossing members of the BOD.
After all that time and effort expended, pension funds have yet to learn that the shortest distance between two points is a straight line --- if Shareholders seriously wish to hold corporate Directors accountable for their actions, Shareholders have to offer serious alternate candidates in a proxy contest. They could start with smaller corporations and work their way up the food chain. The bigger fish would take serious notice. Fear is a great motivator.
We speak from experience. The filing of a bare bone proxy statement and making about 30 vote soliciting telephone calls to institutional proxy voters could have a substantial impact. Our group of individual investors, who met on a Yahoo financial message board, ran such a campaign against a NYSE listed company, contacted 80% of the eligible voters, won 24% of the vote for our slate of Director-candidates and caused the departure of a CEO of questionable competence. Our out-of-pocket expenses were less than $15,000. One would think that well-financed pension funds could do even better with some of the 14,000 companies that have publicly traded securities and are in need of better corporate governance. If one truly desires the impact of a telegram, one does not send a post card.

Les Greenberg, Chairman
Committee of Concerned Shareholders
http://www.ConcernedShareholders.com

Fiftenn years experience as an Independent Director and member of the Audit Committee.

I am one of the many being "adapted to standards" by Pfizer. I am really upset that my little salary is being taken to South America so Hank can make another million while Pfizer goes down the tubes. Even the little Pfizer stock I have is worthless. It is depressing, I now have to move to find a job with very little money because the job market is bad here.

Have not yet seen the Chairman, President, CEO, directors, or other officers, take a base salary pay cut or give up their "Pay for Performance" bonuses at Ford or GM. However, the working "stiffs" have seen their 401k matches and Pension Plans frozen, healthcare participation cost rise, and the potential of over tens of thousands of employees to lose their jobs through plant closings and middle management cut backs. The workers and stock holders feel the pain - BUT what about the private roll executives with their perks, bonuses, and golden parachutes??? This has got to end!

For April 21, 2006
From the newsroom of Automotive News

Restructuring charges cost Ford in Q1

DETROIT (Reuters) -- Ford Motor Co. on Friday swung to a massive first-quarter loss as it took $1.65 billion in charges for jobs cuts, plant closings and other restructuring-related actions.

Ford, which is closing 14 plants and cutting up to 30,000 factory jobs in North America, said first-quarter net loss was $1.19 billion, compared with a profit of $1.21 billion a year ago.

Special items reduced earnings by $1.65 billion after taxes, the company said.

Ford said first-quarter revenue fell 9 percent to $41.1 billion from $45.1 billion a year earlier.

The loss comes as Ford's U.S. vehicle sales fell almost 3 percent in the first quarter of 2006 as sales of sport-utility vehicles slumped and the company's market share slipped slightly.

The quarterly results were Ford's first since the automaker announced its restructuring plan, dubbed the "Way Forward." The cost-cutting plan, designed to restore North American profits, is the second restructuring effort in four years under Chief Executive Bill Ford Jr.

The automaker expects to take a total of $3.4 billion in pre-tax charges for the full year, most of which related to its restructuring. Of that, the company took a total of $2.53 billion of pre-tax charges in the first quarter.

Ford and crosstown rival General Motors, which reported a $323 million quarterly loss on Thursday, have seen their margins squeezed by intense competition and shifting consumer tastes away from profitable sport utility vehicles.

At the same time, they are struggling with higher labor and raw material costs and a cut in their credit ratings to "junk" status.

Ford's core automotive operations posted a loss of $184 million before taxes and excluding special charges, while its finance arm contributed net profit of $479 million. In North America, Ford lost $457 million during the quarter, before taxes and excluding special items.

On an interview several weeks ago regarding the retirement compensation for Pfizer's CEO, Mr. McKinnell, the person said that the shareholders weren't against it. I am a shareholder and I surely am against compensating him in this manner. He should be compensated in stock. Then he would have to continue working until the stock goes up like the rest of us have to do who bought Pfizer with our retirement money!

Most Americans own stocks via 401K plans at work via either Fidelity, Vanguard, American Century, etc... Thus how can we as owners pressure Fidelity, Vanguard, etc... to vote in our interests?

I am glad that as owners, we are finally going to do something about all of these outrageous compensation packages.

DIRECTOR ,CEO,& EXECUTIVE RETIREMENT CONTRACTS HAVE NO MORE FEDERAL LAW PROTECTION THEN DO LABOR RETIREMENT CONTRACTS. THEY CAN BE TERMINATED BY A COURT ORDER. THE LADIES COMMENTS ON CNBC,DEFENDING THE DIRECTOR OF PFIZER & HIS RETIREMENT CONTRACT WERE INCORRECT.

We all need to raise hell about this out-of-control situation regarding Corporate compensation and retirement funding. We don't need to make the fat cats any fatter. No matter how good someone is as leadership of a Corporation they do not deserve the flambouyant rewards they are now being given. Compensation committees that decide what compensations are justified should be selected at random from the stockholders. That would quickly end this runaway compensation gifting at investor expense. If anyone has any doubts about whether now is the time to put the brakes on upper management compensation need only look at what the Directors of their investments are receiving.

I saw the interview on CNBC Squawk Box this morning and thought that your arguments were ridiculous.

Your attention should be focused on: is the CEO doing an acceptable job, is the CEO spending the company money wisely,are the terms of the contract being carried out.

Focus on these issues not on rewriting the contract.

..... and then there's General Motors. How many millions does Rick Wagoner continue to make after the company lost $10.6 billion last year?

GM posts $323 million Q1 loss

DETROIT (Reuters) -- General Motors on Thursday posted its sixth straight quarterly loss as the automaker struggled to cut high labor and health-care costs in the face of a steepening decline in U.S. sales.

The world's largest automaker reported a first-quarter net loss of $323 million, compared with a loss of $1.3 billion a year earlier.

GM, which lost $10.6 billion in 2005, posted a gain of just over 4 percent in global vehicle sales in the first quarter, but a drop of 5 percent in the U.S. market, where its strategy hinges on the success of a new line of sport-utility vehicles.

Excluding one-time items, but including a $1 billion pre-tax health-care charge, GM lost $529 million.

Analysts on average had forecast a loss of 42 cents per share, according to Reuters Estimates.

What we need are directors who are not only independent of management but dependent on shareholders. I urge Investors for Director Accountability to consider proposing replacement directors under the SEC rules that took effect on January 1, 2004.

"Disclosure Regarding Nominating Committee Functions and Communications Between Security Holders and Boards of Directors," requires corporations to disclose if their nominating committees have received a recommended nominee from a 5% shareholder or group and the disposition of that request.

If they accept shareholder nominees, that's great; if they don't it become ammunition for another petition to the SEC to open up corporate proxies to shareholder nominees.

For more news of the struggle, see http://corpgov.net/news/news.html which I hope you will add to your list of links.

And Bill Ford continues to take his $13 million base pay ......

For April 19, 2006
From the newsroom of Automotive News
Click on a headline to open a new browser window and read the story.

Ford plant closing costs: $2.4 billion

LOS ANGELES (Reuters) -- Ford Motor Co. on Wednesday said it expects to take charges in 2006 of $2.4 billion associated with previously announced plant closings designed to help reverse losses in the automaker's North American operations.

In a Securities and Exchange Commission filing, the automaker said the $2.4 billion in charges includes a pre-tax charge of about $1.7 billion for costs associated with expected layoffs and related jobs bank benefits and voluntary termination packages.

On April 13, Ford said it planned to shutter its St. Paul, Minn., and Norfolk, Va., assembly plants by 2008 as part of a broader restructuring plan. The announcement affects over 4,300 people employed at both the plants.

Ford's restructuring plan, dubbed "Way Forward," calls for closing 14 plants, including seven assembly plants, and slashing up to 30,000 blue-collar jobs. It is designed to reverse a $1.6 billion loss last year in the company's North American operations.
story

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Finally, an organized voice of the real coroprate owner! The incestuous relationship between company managers who, in effect, nominate Board Members candidates and the Board Members who then manage the compensation for the managers needs to be restrained or tested in some way. One of my investments rewarded their CEO with a nearly $1MM bonus for first-year accomplishments; from my perspective, all I saw was a decline in profitability and a 20% reduction in stock price. In his second year, the company hardly broke even; I am waiting for my proxy statement to review his 05 compensation package.
I wish I knew how to help you be more effective, faster.

You are on to the most pressing issue facing corporate America today. Just take a look at the Enron trial ,proceeding now, to see what management and directors arrogance and greed will bring. What the directors of companies such as Pfizer and Exxon/Mobil are doing is a threat to capitalism.

I just voted 3 proxy's. I have been witholding all directors for several years now. I vote against all director sponsored and for all shareholder sponsored. Glad to have someone lead the parade. Also, just sent your Pfizer advice to a widow friend whose husband aquired a lot of stock as a Pfizer employee. You pick the targets, I'll help pass the ammunition.

The problem is we have no national licensing for national corporations. The law governing corporations is mostly Delaware law. Delaware law resulted from a race to the bottom to see which state could get the most lax incorporation law. Congress is charged with regulating interstate commerece. Their failure to act in this area is shameful. Your effort is all hat and no cattle.

I have worked in this type of corporate environment where executives sat on each others boards and guaranteed each others salaries and benefits. It is refreshing to see some one step up who is knowledgeable of the system and has influence who is speaking out for the INESTOR!

I would suggest you include the golden parachutes CEOs receive when they are fired. For example, David Edmondson (former Radio Shack CEO) was fired for lying on his resume and received $1.5MM to leave. This is on top of years of under performance. Carly Fiorina, H-P CEO received $21MM.

To be effective, I think we need an objective scoring process similar to The Corporate Library on governance standards.

Thanks for your time, knowledge and energy in making a difference. It has gotten out of hand what the directors of many companies have gotten by with. The employees and stockholders are the loosers. If I can do anthing for your team, I'm in...GO GET THEM!

Enron investigation underway with Skilling to testify. What is happening in the way of an investigation in regards to the accountability of various members of the Board of Directors 0f this corporation. If I remember correctly Phil Graham's wife was a member of this esteemed board with comments on her resume such as having an extensive background in corporate governance. It does no good if we can't hold the board of director's accountable for this "back slapping good ol' boy or girl network" which has drained corporate coffers for years. Lord Alton was correct in the 1600's when he said "Absolute Power corrupts, and absolute power corrupts Absolutely". Somewhere along the line we need to get back to reminding the board of directors who they work for-the shareholders-not management.

I hope this organization becomes a real voice for shareholder discontent with the indifference directors have for shareholders. Maybe their jobs need to be outsourced to foreign nationals from countries where executive compensation is not abused.

I have tried writing to various fortune 500 corporation directors as though they were share holder representatives and received no responce.

I recently read an article in the Tribune which said that the justices ruled that a corpation can not be required to have an independent board chairman. Did I read this incorrectly? It is scary if the justices can tell investors what to do. The justices should be concerned about us.

The key to getting real on executive compensation is to pressure the fund companies to do the right thing for their fund holders and reduce these riduculous perks and salaries.

I, too, have been furious for years about the naked greed and incestuous cronyism of our corporate "leaders." The growing divide between the havalots and the average person is frightening.

Our family holds about three dozen securities, and the same names are on all the boards, along with the token woman/black/hispanic.

I vote for ALL shareholder proposals now, and against many of the directors. More guidance in this area would be really welcome.

Otherwise, what can I do to help?

Executive Excess has reached epidemic proportions - and I am pleased that someone is stepping up to the challenge to confront this issue. This corporate largess will not be easy to undo - and it will take shareholder democracy a 'grassroots effort' to turn the tide so reestablish democracy in board of director governance. But this organization, as described in the DMN is a great start. As an American, I am appalled it has reached the state it has - and it is time to do something about it. How can we help?

I am convinced that one of the greatest threats to our culture, society, economy and moral values is the elitist attitude that has grown in corporate governance. The attitude, that operating executives and corporate governors are entitled to huge annual
compensation packages, is threatening the basic
premise of public ownership of corporations. Executives and board members are losing sight of the fact that they have the responsibility to produce goods and services at a profit to the owners of publicly held corporations. The owners should not have to cash out their equity to realize income.
I am also concerned that double taxation on stockholder dividends is a quick-buck, current-market- price strategy that is counterproductive to long term growth and survival of corporate America.

Bob Besco

I saw the write-up in the
Sunday Morning News and I
applaud your efforts. For
too long, I have be furious
at the millions given to
CEO's and other high level
officials when the company is in the toilet.

At last somebody is doing something about these diabolically obscene amounts that top executives and directors give themselves and each other. For some years now I have been withholding my votes for Compensation Committee members where I think the renumeration is out of line, although just withholding approval doesn't really to have much visibility. There should be a For and Against choice.

Another related problem is the way the ballots are set up in that when a shareholder does not vote, then these votes are automatically cast the way the Directors want.

Good work here. I hope this takes off.

I agree 100%. Not only is the compensation totally out of line, but the employyes and the customers are being hurt, as well. A good example of this is TXU in Dallas. The shareholders are ok, but at a cost to the employees and the consumer.

Hurrah for you! One person CAN make a difference! Go get them!!!!

Its about time someone steps up and brings to light these over compensated, under-acheveing senior executives.

How can I help?

Why not ask persons reading this blog to submit current abuses or perhaps to check out specific companies? You could then screen the results and post them as seems necessary.

This is great work. Please establish a membership list or something similiar...and let individuals know how they can help.

Several years ago, Don Hodges(Hodges Fund) wrote a "Shareholder Bill of Rights". This man has the same vision/goal as your foundation and would be a great partner/director of the foundation.

frank graham

Pfizer is just the tip of the iceberg - what about the U.S. automobile companies? Over the next five years in the U.S., Ford will close between 8-12 plants and lay off over 30,000 workers. In the last 2 years and continuing into 2006, the white color middle management ranks in the U.S. have been/will be thinned by 25%. In the last year, the U.S. Pension Plan has been frozen, 401k matches ended, medical benefits reduced, and retiree paid medical insurance costs have risen by over 12%. In the meantime, after seeing a 40% reduction in U.S. earnings from 2004 to 2005, Bill Ford was proud to say that he only took his base salary of $13.3 million (plus expenses and perks) for 2005 CY ...... what am I missing here? ........ and then there's General Motors and the Delphi debacle ......

For those interested in more information concerning Director unaccountability and the efforts of some individual Shareholders to improve the situation, please visit http://www.ConcernedShareholders.com.

Congratulations for getting us investors organized. The pay of top executives is absurdly high. Finally someone is trying to do something about it.
Count me in to help.

I think we all need to pressure the fund companies we do business with to be voting in the shareholders best interest. I went to Yahoo Finance to check on the institutional ownership which was 5.5% for Vanguard who I invest through. I than checked their voting record for last year. You can go hear to get it?
http://flagship4.vanguard.com/VGApp/hnw/content/Home/WhyVanguard/AboutVanguardProxyVotingSummaryContent.jsp

Their voting record for PFE last year was terrible for us shareholders.

I will be mailing my representative about this and other companies.

Lee

It is critical that directors realize that owners exist and that they are accountable to these owners. Shareholders should communicate with directors of companies If shareholders are consistently losing money, top executives should not be paid top level packages. Compensation committee membership is a real responsibility. Owners are entitled to something more than token consideration.