MA: Mideast Corporate Governance Reform (Statute)

[Queen Mum Inks.LWC]

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Sponsor: TJ in Cleve

[Queen Mum Inks.LWC]

I'm not a fan of 3.c.

[California8429]

There's also two section 3s

[ZuWo]

mmh ... I guess I need to consult a dictionary of some key economic terms first before I understand every detail of this bill. The issue of economics is not something I've understood as well as I should, you know ...

[TJ in Oregon]

There's also two section 3s

Yeah, the second one should be Section 4.

I'm not a fan of 3 4.c.

The reason why I wrote this section was to prevent executives from devaluing investor influence by issuing a ton of stock options. Plus, the primary purpose of issuing shares is to attract investment of capital to a company, not to pay employees. I personally think that stock options often create a perverse incentive for executives and should not be the primary method of compensation.

However, I will admit that this provision would be better done at the national level than the regional level and implementing it could serve to discourage incorporation in the Mideast rather than another region.

Would you be in favor of a higher cap or are you asking for none at all?

[TJ in Oregon]

Seeing as how this is pretty complicated, I think it would be good for me to explain each provision.
 

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This sets up a separate court for corporate law so that suits are not filed in the general court system and juries who will not understand corporate law are replaced by a judge who does. This is the system currently used in the state of Delaware. The reason I have mentioned and probably will mention Delaware so much is that a huge portion of all major companies in the US are incorporated in the tiny state of Delaware because it has some quirky, business-friendly laws.

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This is pretty self-explanatory; the Mideast will not have incorporation fees so that more companies will decide to move to the Mideast. This is also modeled after Delaware law. Franchise fees may still apply and the budgetary difference of this will likely be small.

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In real life, the United States currently has a base salary limit for executives and it has been a disastrous idea. Instead of earning more in base salary, executives are compensated mainly through stock options, creating a myriad of distortions in the market. Here is an example of a place where the government trying to ‘help’ has made the problem much, much worse. As far as I can tell, the Altasian federal government has no such restrictions and I would like to ensure none are made in the Mideast.

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This is simply a fraud prevention measure analogous to the Sarbanes-Oxley Act.

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This has the same purpose as the statement above it and it is just common sense to require a company to explain its finances to its owners (the shareholders).

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This would limit the use of stock options to slightly less than their current levels. See my previous post.

A stock option is a method of payment by giving an employee the option of buying company stock at the price of at a fixed date but the purchase happens later if at all. For example, if a stock is trading at $50 per share when the stock option is granted, the person receiving the option can buy the stock at some later date for $50 per share, regardless of the current price. They can also choose not to buy the stock at all if the price goes down.

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There used to be an accounting loophole in the United States that permitted stock options to be issued at no expense on the company’s books. The reason for this is that if a company grants an employee a stock option they aren’t actually paying the employee in a cash transaction from their books; They’re just granting that employee the right to buy shares at some time in the future at the price now. This measure simply makes sure the options are considered as an expense to the company because they are.

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This is just a fraud enforcement measure, analogous to the PCAOB in the US established in Sarbanes-Oxley.

[Queen Mum Inks.LWC]

I'm in favor of no cap at all.

[ZuWo]

Thank you, TJ, for commenting on each section of the bill. This has helped me to grasp the matter to a certain extent. Nevertheless, I have to admit I'm still quite shaky on this issue (especially when it comes to section 3). While I fully agree with sections 1 and 2, I still have to read up on section 3. But as I said, the bill generally goes in a good direction.

[Queen Mum Inks.LWC]

I introduce the following amendment:

Section 3.c. is removed, and subsequent subsections are redesignated to fill the alphabetical order.

[Queen Mum Inks.LWC]

Voting is now open on the amendment.  Members will vote AYE, NAY, or ABSTAIN.  This will be a 48-hour vote.

[Queen Mum Inks.LWC]

AYE

[ZuWo]

Nay

[FEMA Camp Administrator]

Aye.

[TJ in Oregon]

Aye; After further thought I've concluded that Section 3.c won't actually accomplish what I want to do anyways since companies will just incorporate somewhere else. I would like the federal government to do this.

[Mopsus]

Abstain

[Queen Mum Inks.LWC]

The AYEs are 3 and the NAYs are 1, with 1 ABSTAIN.  The AYEs have it, and the amendment is agreed to.  Without further debate, this will be brought to a vote tomorrow.

[🐒Gods of Prosperity🔱🐲💸]

Sarbanes-Oxley was passed in 2002, so as that was before the establishment of Atlasia, I think it would still be in effect. 
Hopefully we can stop executive base salary limits, but I don't know when those were put in place IRL.

[TJ in Oregon]

Sarbanes-Oxley was passed in 2002, so as that was before the establishment of Atlasia, I think it would still be in effect. 
Hopefully we can stop executive base salary limits, but I don't know when those were put in place IRL.

The base salary limits were put in place in 1994, so if it is ruled that we must follow all US laws and rulings prior to the formation of Altasia, then we're stuck with that too.

I guess we'll still have Sections 1 and 2.

[Queen Mum Inks.LWC]

The following is brought to a final vote.  Members will vote AYE, NAY, or ABSTAIN.  This will be a 48-hour vote.

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[ZuWo]

aye

[TJ in Oregon]

If I may, I suggest we wait to vote on this bill until after the Abortion case is resolved because if US laws are valid then Section 4 provides duplicate regulations as the federal government. Section 3 also becomes a trigger law though still a good idea. If Sarbanes-Oxley is in effect I suggest eliminating Section 4.

[🐒Gods of Prosperity🔱🐲💸]

If I may, I suggest we wait to vote on this bill until after the Abortion case is resolved because if US laws are valid then Section 4 provides duplicate regulations as the federal government. Section 3 also becomes a trigger law though still a good idea. If Sarbanes-Oxley is in effect I suggest eliminating Section 4.

or, if the court rules against you, they'll just have more to do

[TJ in Oregon]

If I may, I suggest we wait to vote on this bill until after the Abortion case is resolved because if US laws are valid then Section 4 provides duplicate regulations as the federal government. Section 3 also becomes a trigger law though still a good idea. If Sarbanes-Oxley is in effect I suggest eliminating Section 4.

or, if the court rules against you, they'll just have more to do

No, even if it rules against the government this would be constitutional, but pointless. Nothing in here is repugnant to Sarbanes-Oxley, but it would be a waste to institute it.

[Queen Mum Inks.LWC]

AYE

[TJ in Oregon]

Aye

Since the lawsuit seems to be taking a while, I think we may as well pass this and just amend it if necessary.