Union Shareholders Crackdown On Executive Excesses

While we're on the topic of unions and their value to society, the New York Times this weekend had a great story on how worker pension funds can force corporate executives to stop ripping off shareholders.

Here is the relevant excerpt:

"Last week, under pressure from one of its big shareholders, the Coca-Cola Company adopted a new policy requiring that its stockholders approve any future executive severance agreements that amount to at least 2.99 times the recipient's annual salary and bonus. The shareholder forcing the issue was the International Brotherhood of Teamsters General Fund, which raised the proposal at Coca-Cola's annual meeting last April... Before the shareholder vote, Coca-Cola's management recommended a 'no' vote on the proposal...But with more than 40 percent of the shares cast in favor of the proposal, Coca-Cola's board approved the change in October."

This is a big win - and highlights the power of shareholder activism in helping to put a leash on out of control corporate power. Shareholders are, after all, the owners of the company. But don't think for a second greedy corporate executives aren't going to fight back against their companies' owners - as I noted a few weeks ago, executives are actually using company money to begin surveillance operations against shareholders they think might cause them trouble. Stay tuned - the battle between shareholders and executivs is quietly getting underway.

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