6. Apple
> Board member: Al Gore
> Board compensation: $260,729
> Director since: 2003
> Primary job: executive chairman of Current TV since 2002, chairman of Generation Investment Management since 2004 and a partner of Kleiner Perkins Caufield & Byers since 2007
> Common stock ownership: 100,971 shares
> Government service: U.S. Vice President (1993 to 2001)
Former vice president and Senator Gore ran for the presidency in 2000. An environmental activist, he was awarded the 2007 Nobel Peace Prize for his work on climate change. Gore’s connections are clearly valuable to Apple (NASDAQ: AAPL), but there is nothing about his past as a politician that makes his relationship with the world’s most valuable public company troubling. Gore could be criticized because the board of Apple was attacked by governance experts for its inability to provide a clear succession plan for Steve Jobs.
7. Pfizer
> Board member: William H. Gray III
> Board compensation: $299,773
> Director since: 2000
> Primary job: Chairman of the government lobbying and advisory firm Gray Global Strategies
> Common stock ownership: 105,476 shares
> Government Service: U.S. House of Representative from Pennsylvania (1978 to 1991)
Gray was a U.S. congressman for 12 years, including his service as Budget Committee Chair and House Majority Whip. He represented Pennsylvania’s 2nd congressional district in the House of Representatives from 1978 until his resignation in September 1991. Gray’s chairmanship of lobbying firm Gray Global Strategies presents a problem. It is fair to ask whether any public company should have a board member who is paid in part to get businesses access to the federal government. Pfizer (NYSE: PFE), like most large pharmaceutical firms, is scrutinized by the federal government, making Gray’s role is even more inappropriate.
8. Dell
> Board member: William H. Gray III
> Board compensation: $300,934
> Director since: 2000
> Primary job: Chairman of the government lobbying and advisory firm Gray Global Strategies
> Common stock ownership: 87,009
> Government service: U.S. House of Representative from Pennsylvania (1978 to 1991)
This is Gray’s third appearance on the list, and his role at Dell is even more troubling than his roles at other companies. Michael Dell entered into a settlement with the SEC for “alleged failure to provide adequate disclosures with respect to the company’s commercial relationship with Intel Corporation prior to Fiscal 2008.” Dell also “agreed to pay a civil monetary penalty of $4 million.” Since one of Gray’s benefits as a director is, according to him, his past roles as a minister and graduate of theology schools, and, therefore, a moral compass, it is odd that he did not resign from the board when Dell was accused and then fined.
9. Prudential
> Board member: Gaston Caperton
> Board compensation: $240,000
> Director since: 2004
> Primary job: President of the College Board since 1999, retires in June 2012
> Common stock ownership: 15,251
> Government service: Governor of West Virginia (1988 to 1996)
Governor of West Virginia from 1988 to 1996, Caperton has been lauded for many years due to his efforts to improve education. He was instrumental in actions to build a large number of new schools in West Virginia and pressed for increases in teacher salaries. Caperton also has been a crusader for wide use of technology to provide improved education tools. Despite how admirable these efforts have been, Caperton does not have a single experience and has not held a single job that would make him an appropriate member for Prudential’s (NYSE: PRU) board.
10. Prudential
> Board member: William H. Gray, III
> Board compensation: $255,000
> Director since: January 2001 (director of Prudential Insurance since September 1991)
> Primary job: Chairman of the government lobbying and advisory firm Gray Global Strategies
> Common stock ownership: 26,824
> Government service: U.S. House of Representative from Pennsylvania (1978 to 1991)
So, Gray sits on yet another board. Among his memberships on all of them he is paid well over $ 1 million a year and has millions of dollars in stock and options. There is no information about what he makes as a lobbyist, but it is fair to assume the sum is extremely high. Gray was a U.S. Congressman for 12 years, including his service as Budget Committee Chair and House Majority Whip. He represented Pennsylvania’s 2nd congressional district in the House of Representatives.
11. Honeywell (NYSE: HON)
> Board member: Judd Gregg
> Board compensation: $401,514
> Director since: 2011
> Primary job: International adviser to the Goldman Sachs
> Common stock ownership: 6,901
> Government service: U.S. Senator from New Hampshire (1993 to 2011)
What is troubling about Gregg’s election to any board is the controversy over his role in TARP and the withdrawal, by him, of his Secretary of Commerce nomination. Among other issues about his Commerce nomination, the AP reported that Gregg “steered taxpayer money to his home state’s redevelopment of a former Air Force base even as he and his brother engaged in real estate deals there.” Gregg’s advisory role with Goldman (NYSE: GS) has been questioned because the investment bank is one of those that received TARP money. Gregg’s public service record is particularly poor for him to be a public company director.
Douglas A. McIntyre and Brian Zajac
