Proponents of mandatory stock compensation.

• Author: Kaback, Hoffer
• Position: Compensation for directors of corporations

Here is a representative sample of the influential parties seeking to convert corporate America to the practice of paying directors entirely or substantially in stock.

Albert J. Dunlap, CEO of Scott Paper Co. (until its recent acquisition by Kimberly-Clark): "If you are not willing to be paid in stock and feel that you must get a check, something is wrong. Look at the typical board where directors own a token number of shares, where they are getting fat checks and not investing in the company, and you will see an uncommitted board." ("If You're Going To Be a Director," Directors & Boards, Winter 1995).

Jerome York, vice chairman of Tracinda Corp.: "It should be self-evident that shareholders are better served by a board which has substantial equity ownership than by a board comprised of members having little or no stock ownership." (Letter to Chrysler board, quoted in The Wall Street Journal, Nov. 21, 1995.)

TIAA-CREF: "[A]ll directors should own common shares in the company. A reasonable minimum ownership interest could be defined as stock holdings equal to approximately one-half of the amount of the director's annual retainer fee." (TIAA-CREE Policy Statement on Corporate Governance, 1993.)

National Association of Corporate Directors: "Delivering pay in the form of stock - as opposed to cash or benefits - accomplishes a shift to performance-oriented pay, and one that directly links directors to their principal constituent, the shareholder...Compensation should be used to motivate director behavior ... Substantial stock ownership by directors can forge the 'incentive' link missing in most director pay plans today... Directors who have a significant investment in a company are more likely to take an active interest in the company's well-being than directors who have only a...