Finally a victory for corporate governance activists?
Yesterday’s report about the SEC’s letters chiding corporations about corporate pay disclosure may finally signal a victory for corporate governance activists. This victory – any victory – has been a long time coming.
Since the passage of Sarbanes-Oxley, corporate governance activists have had little to cheer about. There have been many fights along the way, many organized campaigns, and many regulatory proposals. And every single of them fell short.
It is clearly sad in that the most heralded victory for activists since SarbOx was the March 2004 “vote no” campaign at Disney against Michael Eisner and his board. While the vote clearly pressured Eisner to step aside his active role as CEO, the campaign against Eisner failed in attempting to create turnover amongst Disney board members, failed in securing an outside CEO, failed in implementing Roy Disney’s action plan for the company, and failed in removing Eisner and his fingerprints completely from the company.
Moreover, it failed to create tangible momentum for shareholder activism, failed to spawn other successful ”vote no” campaigns across corporate American, failed to spearhead new reforms, and failed to invigorate common investors into participating more frequently, if at all.
Yes, that’s the biggest victory about which shareholder activists have had to cheer.
Until yesterday.
The SEC is a slow moving train, but once that train starts moving, it’s moves heavily and is very steadfast in its direction. If the SEC has decided that corporations need to clean up their filings and provide more details, that’s exactly what will happen. And there is no doubt that the realm most in need of a thorough revamp is executive compensation disclosure.
The SEC deserves applause for this latest move, the effects of which may range further than is evident today.
