Answer to Question 1
The federal government has tried to change the landscape of corporate governance and executive compensation, in the following ways:
Lead Director. The independent members of the board are required to meet regularly on their own, without inside directors. About half of the companies in the S&P 500 have appointed a so-called lead director to run these meetings and serve as a counterweight to the CEO chair.
Disclosure. The SEC now requires more complete disclosure of executive compensation. This disclosure includes the relationship between financial performance and executive compensation as well as the ratio between the CEO's total pay and the median total compensation for all other company employees.
Clawbacks. A public company must establish a claw-back policy, whereby it can require the CEO and CFO to reimburse the company for any bonus or profits they received from selling company stock within a year of the release of flawed financials.
Say-on-pay. At least once every three years, companies must take a nonbinding shareholder vote on the compensation of the five highest paid executives.
Answer to Question 2
E