By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – Corporations, thanks to new rules and regulations, are being forced to be more transparent to their stockholders. Yet the hardworking, loyal employee continues to be left in the dark when it comes to their financial future. I'm Maxine Shapiro with KERA Marketplace Midday.
Shareholders now have another win on their side in an ongoing battle to expand their rights. Companies listed on the U.S. stock exchanges must now get the vote from its stockholders for any executive stock-based pay plan. So, if you own stock in XYZ Corporation and it plans on compensating a few big-wigs with a lucrative stock-option plan, XYZ must now come to you first for approval. So unless your brother-in-law is one of those executives, you can now think long and hard before voting yes on some of these plans. A couple of years ago, equity-based plans enticed a few executives to bolster the books so the stock price would go up and so would their pay.
But there is still a slice of the corporate apple that smells rotten. And no one seems to be coming to the aid of the American worker. Every day, the business news is scattered with headlines concerning the fall of company pension plans. Without warning and with no recourse, employees and retirees are told their once-secure financial future is gone. For many workers, these plans are what kept them getting up every morning year after year, decade after decade. Employers have successfully been able to keep the health of their pension plans secret. Several companies looming on the verge of bankruptcy have pleaded their case to employee unions to accept less in their pension plans for the good of the company. But for these workers, there is no real way to verify the truth.
According to the Wall Street Journal, companies file pension information with the SEC. But most large companies lump all the plans together. So where the executive pension plan might be doing just fine, some other plans can be under-funded - and there's no way of knowing which is which. Even requests made under the federal Freedom of Information Act have failed. So until workers can enjoy the same rights as stockholders, I'll question the new corporate transparency. For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 p.m.
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