Tuesday August 29, 2006 The rich DO get richer

My IRA is invested in Fidelity Mutual Funds.
The other day I received a voting form from Fidelity requesting my proxy or vote for the proposed upcoming board of directors. I sat down and reviewed the various directors and their compensation. Years ago, T Boone Pickens of Mesa Petroleum spoke on public radio about “the good old boys club” of directors of various companies and how he was invited to join – he refused at the time.

Most of the directors for Fidelity are on the board of directors of various other companies and were once presidents or chairmen of still other companies. I was amazed that most of their backgrounds had nothing to do with running a mutual fund or investing. The board of directors apparently choose the direction they want the fund to steer toward and appoint a manager who handles all the details. They just sit back and direct. The minimum compensation for this directing amounted to slightly less than $400,000.00 per year each. Assuming that they served on two other boards, that gave them over a million dollars a year to hold their quarterly meetings. I'm sure that their meetings are elegant and cordial, but are they really worth that? SWEET!

The rich get richer and have very little understanding of how the common people live.

The inequities of our system are splitting farther and farther apart and there is little effort to correct this basic flaw. It seems that there is less and less sympathy or empathy from the upper caste of our system. “If they have no bread, let them eat cake” has a familiar ring to it. As we suffer through the upcoming trials and tribulations, I hope there will be a leveling of the playing field.