Boston Scientific shares decreased 3.4%, today.
But, today the market recuperated some strength. Then, why Boston decreased so much?
The reason: a significant change in Board Governance.
Take the revolution in Boston:
First: (Boston Scientific) will require its CEO to own at least 240,000 shares. Executive vice presidents must own a minimum of 75,000 shares and senior vice presidents must obtain at least 20,000 shares.
Second: Shares will be worth five times the base salary of the CEO, three times the executive vice presidents' salary and one times the base salary of senior vice presidents.
Third: Executives must reach stock ownership levels within five years from the date the guidelines were adopted or the date they became an executive officer -- whichever one is later.
Forth: The new standard mandates that any director nominee not elected by a majority of votes cast to submit a resignation letter after the shareholder vote. The company's governance committee will then either recommend or reject the letter.
Fifth: The board recommends phasing in annual elections of directors and shareholder approval of an amendment that require directors to be elected annually for a one-year term, instead of the current three-year terms.
This is a real revolution. But, we like this approach. The market is making a NO.
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