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Posts Tagged ‘fdic’

One of the sacred tenets of good corporate governance is separating the roles of Chairman of the Board and Chief Executive Officer.   This provides a critical oversight function with respect to the activities of the CEO.  Exhibit one supporting this concept is perhaps JP Morgan CEO Jamie Dimon’s role in the current multi billion dollar scandal regarding trading losses in its risk management unit.

Meanwhile over at Intel the current Chairman of the Board is former Chief Financial Officer Andy Bryant.  The CEO is Paul Otellini.   Otellini can run the business as he wishes yet he is accountable to the board and specifically Bryant.

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On October 15th, 2010 Oregon State regulators approved the $4.5 billion merger of First Technology Credit Union with Addison Avenue credit union, the biggest such merger in credit union history.   In my opinion, this results from a complete breakdown in the integrity of the credit union regulatory process.   For this reason I have written directly to the Securities and Exchange Commission and the FDIC with the hope that they will lend support to the notion that, prior to approval, important disclosure standards be first met.  See April 21, 2010 related blog post for additional background information.

During the last 6 months I have requested that both First Tech and Addison Avenue fulfill their responsibilites to members, specifically asking for more details regarding executive compensation, their respective investment portfolios and also allowing a 90 day period for member review rather than the planned 45 days.   To many members this merger is an “inside job” that would not be supported by members if adequate disclosures were made.  Although the CEO’s offered to meet me and discuss the issues several times, I thought it inappropriate and we have therefore only communicated via phone and email.  Adequate disclosure should speak by itself, and to all members simultaneously.

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Note (Not Copyrighted) : This basic post was updated December 10, 2010 given the current debate in Congress over extending the Bush tax cuts and numerous inquires regarding my position in this debate.  The purpose of this post is to highlight that although rates are important, perhaps more important are overall fairness issues associated with two situations in particular.  Put another way, why don’t we all forget about the rates and focus on basic fairness first.  Doing that should allow rates to come down in all brackets.

With the financial reform package now passed, all eyes are on the setting of specific rules regarding its implementation.  And while lobbyists attempt to direct the debate away from where it should be, let’s instead visit the core issue, tax rules.

This rollout of specific rules related to the Volcker Rule and related tax considerations will squarely position Paul Volcker, pictured on the lower left below and current IRS commissioner Doug Shulman, lower right, against Blackstone Group LP’s Steve Schwarzman and other leveraged buyout artists operating under the guise of “private equity.”  Why are tax rules key one might ask, especially if these rules have nothing to do with the debate over carried interest?

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