Reuters (http://reut.rs/1ez4glb) is reporting pay cuts for the CEO and other senior executives as well as saying they will on-board more non-company Board members (especially lawyers and accountants). Is this enough to instill confidence in the marketplace?
Toshiba to cut interim CEO pay by 90 percent on accounting scandal
Answers
If the faulty financials resulted in a total compensation package greater than the correct financials would have deemed fair and equitable, the difference should be reimbursed, i.e. a clawback from all senior managers.
Typical company placating investors, employees, and other stakeholders. If Toshiba and other companies involved in similar scandals would have put proper governance in place to begin with I think these types of scandals would occur less often.
It is now after the covers have been pulled off, that Toshiba will hire more independent directors. Just like the IRS and other governmental agencies, companies are too often issuing new policies to prevent things from happening in the future that have already occurred. It's good to put policies in place to keep it from happening again. But where was this logic in prior years?
I think the best way to instill confidence in the marketplace is to put proper governance in place before issues arise.
They needed independent AUDITORS more than they need independent Directors.
Your WTF moment...... in the company action plan, the corrected amounts will be then certified by the same auditing firm that missed (I am being nice) them in the first place ....E&Y ShinNihon.
1
E&Y missed it because of (pick as many as you want)
a) culture: juniors dealing with seniors
b) experience: who really does the grunt work, the juniors
c) payoff, kickback
d) threat of loss of account and resulting loss of income to firm and partners
Shocking (not really)...
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