Shareholder Abuse and Defences against Message Board

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Non-Tech : Shareholder Abuse and Defences against

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To: Madharry who wrote ()	5/2/2000 10:16:00 PM
From: Bob Rudd	Read Replies (1) of 15

I tend to think it's not cost effective, in most cases, for individuals to seek redresses beyond possibly participating in shareholder class actions. Those actions, however, should be entered with no thought towards meaningful recovery, just revenge for having been screwed, as the lawyers will reap the lions share of the benefits. The best course for individuals, IMO, is to avoid being victimized by learning warning signs of BOD and management incompetence and/or self-dealing. With Mattel, a key tip-off was that Barad was BOTH CEO and CB. This eliminates an important balance. A better approach is to reward a highly effective CEO that's beginning to burn out by kicking him up to CB. This error probably lead to a contract that in turn lead to the absurd severence. Other BOD warning signs: Lack of truly independent directors [golf buddies and old friends of CEO aren't independent] thus lap dogs instead of watch dogs Board members don't own shares Excessive compensation - BOD rubberstamps Excessive Corp perks - planes etc Most of this is available in Proxy Not an exhaustive list..just a starter, additions welcomed. bob

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