Infectious Greed: Restoring Confidence in America's CompaniesFinancial and corporate scandals have led to a fundamental crisis in the American corporate system: one in which investors believe they have been thoroughly betrayed by the managers, boards, accountants, and investment advisors they once trusted. The fundamental challenge is to restore confidence, but how? Tougher laws, while essential, aren't enough: they've already been passed, and investors are as disillusioned as ever. In Infectious Greed, John Nofsinger and Kenneth A. Kim begin with an insightful assessment of what really happened: how executive compensation systems have led to unethical and greedy behavior; and how monitoring systems and regulators failed. Next, they offer systematic solutions that align incentives to promote desirable actions and discourage unethical behavior. Their solutions build on what's best about capitalism, and can truly restore the investor confidence that is essential to the system's long-term success. |
Contents
CHAPTER 1 The Importance of Investor Confidence | 1 |
CHAPTER 2 The Structure of Corporations | 17 |
PART 1 The Failure of Executives | 33 |
CHAPTER 3 Executive Compensation and Incentives | 35 |
CHAPTER 4 Executive Behavior | 51 |
PART 2 The Failure of Monitoring Systems | 69 |
CHAPTER 5 Accountants and Auditors | 71 |
CHAPTER 6 The Board of Directors | 89 |
PART 3 Shortcomings in Enforcement and Investor Activism | 167 |
CHAPTER 10 The Securities and Exchange Commission | 169 |
CHAPTER 11 Investor Activism | 187 |
PART 4 Restoring Confidence | 205 |
CHAPTER 12 New Rules Regulations and Policies | 207 |
CHAPTER 13 Create Good Incentives for LongTerm Solutions | 227 |
CHAPTER 14 Regaining Investor Confidence | 247 |
| 265 | |
CHAPTER 7 Investment Banks | 109 |
CHAPTER 8 Analysts | 131 |
Credit Rating Agencies and Lawyers | 151 |
Inside Back Cover | 279 |
Back Cover | 280 |
Common terms and phrases
accounting firms Adelphia align analysts Arthur Andersen auditing firms auditors bankers bear market behavior board members board of directors bonds bonus bull market BusinessWeek CalPERS capital cash chairman Chapter Citigroup clients company’s compensation conflict of interest consulting corporate governance corporate system create credit agencies credit rating agencies debt downgrade earnings economic employees Enron example executives expense fees financial statements firm’s fraud Harvey Pitt hired incentive increased independent industry Infectious Greed insiders institutional investors investment banks Investor Protection issue John John Rigas July loan lysts managers Merrill Lynch monitoring mutual funds NYSE ownership pany partnerships pension funds percent Pitt problems profits proposals Public Company public investors recommendations regulators reports role scandals securities sell shares sold solutions stock market stock options stock price strike price tion tives trading trusting investors Tyco vote Wall Street Journal wealth WorldCom