FIRM FILING PAPER
...s because of the dollar amount that was invested in the company. This monitoring would prove to keep the management of this firm in line in order to make decisions that would benefit all interested parties. The executive compensation of this company is that of team compensation in which all executives are paid relatively equal to each other which keeps them focused on the good of the company as a whole and not on competition with each other. The executives were also given stock options as part of their compensation which also aligns them with the focus on stock-price performance. In 2000, SL Green Realty Corp. continued to have the same staggered board of directors. After reviewing the financial statistics from 1997 and 2000, time had proven that the board had been efficient in controlling the management of the company to help increase its numbers. The director compensation changed from a cash basis to a half cash/half shares basis which made the outside and affiliated directors more concerned with the firm’s stock-price performance. The firm also continued to have a team compensation basis for its executives plus stock options which forced them to have concern with the performance of the company and its stock prices. Center Trust Properties had a staggered board in 1997 and there was a dramatic change in board members. In August of that year the firm voted for four new directors leaving only three of its previous directors on the board. By year end, the duties of Chairman of the Board had been passed on to an affiliated director. There were four outsiders, two affiliated and one insider director. This is a relatively small board which usually proves to serve a company well. The fact that there are more outsiders proved that there would be more control over management than if there were more insiders. Also, the fact that an affiliated director was Chairman of the Board meant there would be no conflicts of interest as there may be when the CEO is chair of the board. Of course, an ideal Chairman of the Board would be an outside director because he/she is more likely to represent shareholder interests and all problems of the firm including those caused by the CEO which could be focused on and addressed. This board was compensated at the normal rate for small firms, which is between $15,000 and $25,000. They also had stock ownership in the company and therefore were more likely to be tied to the firm’s stock-price performance. The company’s executives were on a team compensation basis with stock options. In 2001, Center Trust Properties had restructured its board to consist of two insiders, three affiliated directors and four outsiders. This is a good size board for a small firm. The compensation for this board was changed to a stock basis base fee and was increased in dollar amount which forces the board to concentrate on shareholder’s interests and the stock-price performance because it affects them as well. There is CEO/COB duality in 2001 but it did not seem to affect the management decisions that were made for the company because this executive/board director had stock ownership in the company. The percentage of institutional investors increased in 2001 to over 50% which subjected the firm to a higher degree of control than in 1997. It is not easy to tell how effective this control was because although t...