On March 3, reports BLOOMBERG BUSINESS WEEK, Swiss voters approved a referendum which gives shareholders of public companies lots of power determining executive compensation. Since the Swiss economy thrives on being a sanctuary for capitalist interests, this development is, well, shocking.
Not shocking, though, will be the speed with which this corporate governance issue spreads around the world. So many constituencies, beyond just shareholders, are outraged at the amount of executive pay as well as provisions such as golden parachutes and huge retirement payoffs even if the leaders had been miscreants.
Called the "Say-on-pay" movement, this initiative will be filling the U.S. media soon enough with how shareholders are struggling to implement it. At the top of the list will be hedge fund managers. For those who want more information and insight on the strategies of hedge funds a useful read is the new book "The Alpha Masters" by Maneet Ahuja. The author describes in detail the orientation of nine major hedge funds and how their leaders came to found them. They range from Bridgewater Associates started by Ray Dalio to Sba Capital Management launched By Boaz Weinstein.
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