'Golden Leash' Payments Fuel Debate

A shareholder vote Tuesday in California for board members of a small, local bank is emerging as a test case for one of the hottest topics in corporate governance: whether activist investors should be able to pay bonuses to their picks for board seats. After approving a new corporate bylaw that would bar such investor-paid bonuses, three directors at Provident Financial Holdings Inc. have found themselves in the middle of the debate and are facing a call for them be voted out. Critics have dubbed the issue the "golden leash," referring to some activists' aim to offer bonus payments over time to board members they help install at a company. So far, attempts by activist investors including Jana Partners LLC and Elliott Management Corp. to pay bonuses to certain board members have met resistance.



via Business News - Yahoo Finance http://finance.yahoo.com/news/golden-leash-payments-fuel-debate-233600212.html