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Comments of Leonard Rosenthal

March 30, 2009

invited response to

Chia’s “Ten Things to Keep in Mind”


Leonard Rosenthal, whose comments are presented below, is a Professor of Finance at Bentley College and is recognized for his research that relates securities valuation to corporate governance, investor relations and regulatory variables.



Comments of

Leonard Rosenthal

March 30, 2009



I want to compliment Douglas Chia’s well thought out comments to “Say on Pay.” Additionally, I would like to add a few points of my own.

I particularly applaud his call for evaluating the quality of compensation information that is currently disclosed. From my point of view, after having seen two years of CD&As of many firms, we have a long way to go in being provided information that is useful for and understandable by shareholders. Too many companies have taken to inundating shareholders with information with the purpose of obfuscation as opposed to clarification.

I also strongly agree that more needs to be done to make it easier for companies to communicate with its shareholders. In particular, I would like to see direct registration of all shareholders either at the corporate level or at DTTC, and the elimination of record holders through the “Street Name” system that currently exists. OBOs (Objecting Beneficial Holders) can still have their stock registered under a nominee’s name. In this day and age, there is no reason why an intermediary like Broadridge Financial Solutions should have what amounts to a monopoly right to control information on beneficial ownership.

I agree that we should and can learn from companies that have adopted “Say on Pay” in the U.S. (keeping in mind that there isn’t a long track record on this). Moreover, his point on making sure that this is a useful exercise of shareholder rights makes a great deal of sense. Since understanding and evaluating executive compensation is so important, we don’t want to come back in a few years and say that this was a waste of time and money.

Leonard Rosenthal, Ph.D.

Professor of Finance

Bentley College

Waltham, MA 02452




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