I learned that as readers responded to my suggestion that selling some equities was a good way to send a visceral signal to Washington and Corporate America. It was, one reader wrote, "cutting off your nose to spite your portfolio."
Many thought we should write our representatives and senators in Washington. Others thought that Enron was an exception, not the rule.
Good and reasonable responses, those.
Five years from now, however, I believe that Enron will be seen as a catalytic event. It will be an event that marked the beginning of major change. We don't know what those changes will be, but the Enron debacle signals a sea change in public attitudes and tolerance.
One indication is a recent interview with Don Hodges, founder of a small Dallas brokerage and advisory firm. His company, First Dallas Securities, isn't likely to be confused with a left-leaning think tank. It's an investment business. Its survival depends on having good stocks to buy and sell. His firm depends on having investors who trust corporate decision makers and corporate reporting.
Mr. Hodges, a man with a full head of white hair and a fondness for bronze sculptures, isn't likely to be confused with any of the Radical Chic heroes of the sixties. He talks plain and insists on understanding how a business makes money.
That said, listen.
"I can remember, in the fifties, reading about the abuses of the big labor unions. You know, John L. Sullivan and all that stuff. But when you look at executives today, the unions couldn't hold a candle to their abuses.
"It's like a disease. One does and the others follow. Boards of directors are being bought.
"Too much money is intoxicating. These guys get drunk on it. When they have too much I can promise you that they'll throw money around. If you make $25 million and get $25 million in bonus, I promise you, you won't be anywhere near reality.
"The companies that are best are the ones with high executive ownership. But take a professional manager who doesn't have a major stake and he won't have the same motives--- he won't have a shared interest with the shareholders.
"Another thing is that when the stock price goes down the board will be quick to reprice the stock options. There has always been a lot of this sort of thing but it's rampant today."
I asked what would be at the top of his list for positive changes.
"Executive compensation. It's just out of control. The best example might be the executive who retires or is terminated. Why is he entitled to a continuing income or a big settlement?" He cited examples of recent multi-million dollar termination agreements at companies such as Mattel and Disney.
"What's paid to directors should be looked at. If there is a weakness anywhere (in the system) it's in the independence of directors. I don't know what the answer is. Shareholders can sell stock but that doesn't answer the problem."
His other concern: accounting, with particular attention to revenue recognition and stock options.
Mr. Hodges' recurrent theme was the growing disconnection between good decisions and executive compensation. "There needs to be a reality check. Compare executive compensation to the number of employees it would take to reach an equivalent sum. In some cases it would be in the thousands," he said.
"Is anybody worth that?" he asked
"Yes, there is always a rationalization for it. The board hires a consulting firm to check comparables, etc. and all the checks come from the company. Probably the only thing that will correct it is a bear market."
One part of the coming change is very simple. For more than a decade American executives have basked in the adoration of an uncritical press and an equally uncritical investing public.
If the February 25 cover of Business Week about "The Betrayed Investor" is any indication, that period is over.
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