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Finance, Accounting And Banking
>>Big Companies Tightened Spending As Trade Fears Intensified
General Electric Co shareholder did not accept the proposal to separate the role of chairman and CEO. According to the Sarbanes-Oxley Act in 2002 chairman and CEO must be separate in position, as shareholders value is enhanced with separate power and independence. But the shareholders argue that one person can oversee properly the board and governance issues rather than two because he has the power to speak and lead the company. General Electric Co shareholder has also modified other act such as 15 years term limit and stock and bonuses. These changes are somehow lucrative for the time being but in the long run, it has a negative impact, one man power and decision will not be right all the time which can push the company into a big loss. But the decision in stock was appreciated and stock prices are increased by 2.1% to $21.95 in afternoon trading.
These corporate governance changes have also impact on company stock prices, in the previous 5 years General Electric Co shares fall almost 34%, but Honeywell’s shares are up 24 percent and United Technologies’ is 27 percent higher. The overall S&P increase of 14%.
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