1. Are CEOs Paid Too Much? CEO Salary Year Compared to Blue-Collar Worker Avg. 198042 times 199085 times 2000531 times Source: Business Week

2. 0 100 200 300 400 500 600 700 800 900 1000 Belg. Fr.Ger. It. NL Sp. Swe. Swi. UKUSA Stock Plan Other Perks Cy Car Cy Ben. Plan Soc. Sec. Contr. Bonus Base Salary In USD ‘000 Comparative Total Compensation Cost - Top Management Positions

3. Proportion of Base Pay in Annual Total Cash Source of Data: "Watson Wyatt Data Services” The proportion of variable pay of US executives is noticeably greater than for Europe. USA*Switzerland*Germany*France* United Kingdom* *Number of participating companies: Switzerland: 102 Germany: 202 United Kingdom: 169 France: 155 USA: 1741

4. The Conference Board Recommendations on executive compensation Compensation Committee Responsibilities –Compensation committee members should be independent –Chair of compensation committee should be accountable –Meetings (called by Chair) should be held independent of board meetings –All forms of compensation should be reported to SEC Performance-based Compensation –Link to long-term strategic goals –Recapture provisions in cases of malfeasance Equity-based Incentives –Expense stock options (report all costs prominently) –Require execs to accumulate stock –Minimum holding periods

5. US Stock Incentives: Overhang and Shares Granted to Top Executives

6. Checks on CEO Power & Independence Boards of Directors Shareholders “Wall Street Walk” Elections & resolutions Lawsuits Hostile Takeovers

7. Board Independence. A majority of directors must be independent. Independent directors must meet periodically in executive session. Audit Committees. Audit committee - three or more independent directors. Executive Compensation. Compensation committee - independent directors. Director Nominations. Nominating committee - independent directors. Related Party Transactions. All related party transactions must be reviewed for potential conflicts of interest and approved by a company's audit committee. NASDAQ Corporate Governance Rules (2004)

8. The Rise of the Institutional Investor

10. Conduct internal consultations among management Determine the value of the company by use of industry norms (i.e., book value, market value, etc.) Develop a negotiation strategy Conduct careful board deliberations Minimize unnecessary time pressures Review all data and information thoroughly Make use of outside experts to validate your decision (i.e., lawyers, investment bankers, and accountants) Duty of Care - when evaluating a sale or merger:

11. Self-dealing Competing with the corporation Entrenchment Officers and directors rubber-stamp a decision in order to continue in the interested party's good favor Trading on inside information, or not disclosing the trading of others. Duty of Loyalty - Common violations: