Erskine Bowles, who served as President Clinton’s chief of staff and president of the University of North Carolina, has made several million dollars serving on the boards of companies whose stock prices have plummeted. He was a director at General Motors at the time it went bankrupt and at Morgan Stanley when it was bailed out by the government. He was also a director of Facebook during the period when the value of its stock fell by close to 50 percent.
This is not supposed to happen. While top executives can expect to be well-compensated when their actions substantially boost stock prices, they should not get large paychecks when they have failed. It is the job of directors on corporate boards to prevent this sort of fleecing of shareholders.
But they aren’t doing their job. They don’t think anyone is watching. Well, we are.
The Huffington Post has agreed to partner with CEPR to host a new website called Director Watch. Director Watch will bring to light the names of directors who get large paychecks even as the companies they oversee are going down the tubes.
There are many other Erskine Bowles out there. Director Watch will call attention to them and to the issue of excessive pay and lack of corporate accountability. It will rely on crowdsourcing, meaning that people will submit information on directors who failed to effectively restrict CEO pay and ensure that the companies they oversaw were on sound footing, but nonetheless got rich in the process. The staff of Director Watch will verify the information and post it on the Internet in a user-friendly and easily searchable format.
The only hitch? CEPR needs to raise $17,000 to get this program off the ground. (As you may know, we run a lean organization here at CEPR, which is why we continue to be recognized as the most cost-effective think-tank in town). And since we’re using crowdsourcing to get information for Director Watch, we decided to use crowdfunding to raise the funds needed to get the site up and running.
Please click here to go to CEPR’s Indiegogo campaign, watch the video and help us shine a light on these people. We need this campaign to be a success so that we can start to name names.