Economy
Related: About this forumHow to fine a corporation appropriately?
This fiasco over the Pacific Gas and Electric utility (PG&E) recouping the money from rate payers to pay for the fines due to the deaths of 8 people and destruction of 38 homes on Sep 10 2010, is really getting me pissed.
I was wondering how to make a corporation *really* pay attention.
The owners of the corporation are its shareholders and the board of directors is just a proxy for those shareholders. If the Board of Directors misappropriates company money in the form of bonuses and dividends when it has not performed due diligence in maintaining its capital, they are guilty just as any other thief. However the shareholders should be the ones to pay ultimately, since they are the corporations owners.
I think the appropriate way to force the owners to pay, is for the court to direct that common shares be sold to pay any fines and to make good on the unmaintained infrastructure that the owners already own. This has the added advantage of diluting the owner's equity (because new shares have been released) and making every owner feel the pain of the mismanagement and misappropriation as should have happened in the first place. Let the owners (shareholders) sue the Directors for any recovery they think appropriate because of the reduction in their equity value.
There ought to be a law!
on point
(2,506 posts)Right now they get off bonus and payments and golden parachutes. They should have to give all of it back plus pay percent of fine in order for them to have real incentive to obey the law and enforce good governance. If they feel they were misled somewhere along the way they can go after those people.
Warpy
(111,245 posts)by withdrawing the corporation's charter and sending top officers (including the BOD) over the period the crimes were committed to prison.
Rassah
(167 posts)If you have a 401k plan with your employer, or your own IRA plan, chances are you are a shareholder of hundreds of corporations without knowing it. This is why old British people got really pissed when USA wanted to fine BP. Instead of forcing retirees to pay for the stuff that may not even have known they supported, I really wish that governments had the right to "pierce the corporate veil" and fine the actual decision members who were actually responsible for the damage. That whole "limited liability" stuff that keeps directors and CEO completely protected from anything they do has let them get away with way too much, especially as it keeps getting expanded.