BOOSTING AVERAGE YIELD WITH ABERDEEN CHILE FUND (CH)

In my latest investment research I recently discovered Aberdeen Chile Fund (CH), which I placed an order for in my taxable account.  CH has a dividend yield of 10.67% on their recent price of $18.48 per share.  While yield alone is not a good reason to buy, I also learned that in Chile companies are required to pay at least 30% of net profits to investors as dividends.  U.S. companies are allowed to cut or halt dividends at any time.  Although you wouldn't want throw all your investment dollars into high yielding foreign funds or stocks, it is a good idea to add a few to diversify your portfolio.

I've been reading a lot of annual reports during the most recent earnings season and am quite frankly appalled by the amount of each report dedicated to executive compensation.  O.K., they have to be paid and deserve to be paid well as long as they're increasing shareholder value.  However, I think it would be a good idea if they'd concentrate a little more on increasing payouts to shareholders, in the form of increased dividends.  Maybe if shareholders saw a little better payouts, they'd be less likely to vote against overly generous executive compensation plans.  I'm so disgusted by their greed and apparent lack of concern for shareholders interests, I make it a rule anymore to vote against any and all compensation plans.

It would be great if the U.S. would follow Chile's lead and require corporations, who rode out the latest financial crisis on piles of cash, to pay out 30% of net profits to shareholders.  I'm sure shareholders would put the money back into circulation and get the economy moving.  Their excuses for holding such large stockpiles of cash seem questionable now, especially in light of the latest round of compensation packages.  Were they really holding on to the money so they could give themselves pay raises, bonuses and fund lush retirements?  One has to wonder...

EXECUTIVE COMPENSATION

It's earnings season again and as I've been reading through the annual reports from some of the companies I am a shareholder of, I can't believe some of the pay packages and incentive programs the corporate boards are asking shareholders to vote for. Don't get me wrong, if you do an honest days work I truly believe you should be adequately compensated. However, is there truly any individual in any corporation in the world who contributes so much to the success of the company that they deserve untold millions of dollars in salary and compensation? Well maybe Warren Buffett or Bill Gates, but they've proven their worth to shareholders by making a great deal of them rich beyond their wildest dreams. Otherwise, I can't think of any good reason why anyone in their right minds would vote to increase compensation to corporate executives who already make obscene amounts of money.

I still believe in corporate America, but I think some of the people in charge of our corporations need to be reminded, without shareholders they wouldn't have a job or a business to run.

In one of the companies I've invested in, board members are paid a retainer of $70,000 a year, well above the average take home pay of most U.S. citizens. On top of their "retainer" they are paid an additional $50,000 per year for each committee on which they serve, plus expenses for all meetings they attend and you better believe their not staying at cut rate motels and eating fast food. This is not their normal job. Most of these people serve in highly paid positions with other companies while serving as members of the board of directors with this particular corporation. In addition, they may also serve on any number of additional boards and are most likely receiving similar compensation from those companies as well. So if they serve as a board member and on at least one committee, they are already taking home $120,000 per year, plus expense reimbursement for very little time spent on actual company business. For these same people to ask me, as a shareholder, who earns maybe 3 to 6% per year in dividends on my investment, to vote for an increase in executive compensation and increased retirement benefits is absolutely ludicrous!

I am from Missouri. If any of these people think they actually contribute enough to their company to justify a salary of a million dollars a year or more, then they have to "Show Me". As far as I'm concerned, corporate boards are way out of touch with the average shareholder and shareholders interests and I for one vote against any and all compensation proposals. As far as I'm concerned, when you expect something for nothing, that's call welfare! So when I see their contributions to the company in the form of increased earnings, increased dividend payouts to shareholders and increasing shareholder equity, then maybe they can talk to me about compensation. Frankly I feel that I've contributed enough towards their wealth and retirement programs, it's time the average shareholder started getting paid.

Citigroup: Again With Executive Pay!!!

The "New York Times" reported that Citigroup has decided to raise employees base pay to avoid the flack over year end bonuses. Some employees will see as much as a 50% increase in salaries. The Obama administration was caught off guard once again, since they seem to know nothing about Citi's plans. In my opinion, we should think twice about supporting people in the next election, who seem to be so fast and loose with the taxpayers' money.

On Monday, banking analyst Meredith Whitney recommended Goldman Sachs [GS 149.75 0.31 (+0.21%), which represents a shift in her more recent bearish position on financials. Now there seems to be some concern over executives with GS selling shares (close to $7 million worth) during the time they were benefiting from TARP loans. I'm not especially concerned over this, since they managed to keep the company from going under, which is more than can be said for other overpaid bank executives.

I don't plan on investing in Citigroup or GS, but if I were, it would be Goldman Sachs which, as far as I'm concerned, is obviously a much better managed company.

Executive Compensation.

I took a friend to the V.A. Hospital this morning for an MRI and while sitting in the waiting room, I read an article in the March issue of Forbes where the writer was defending executive compensation. Hey, it's a free market economy and I'm all for getting paid as much as you can, but come on! They've all had a good ride, it's time to come down to earth. When the company you work for is losing money hand over fist for the shareholders, why would you expect to get a bonus? When the company I worked for was losing money, not only did I NOT ask for a bonus, I voluntarily took a substantial pay cut until things turned around. As it turned out, we did turn things around and started making a profit. A failed lease negotiation ended up closing the business, but the point is, I was realistic about the whole situation in the sense that I wasn't asking for more money for non-performance. We're only talking about a few thousand dollars a month in losses with this company. If the company you work for lost millions or even billions of dollars of shareholder (i.e. owners) money, why in heaven's name would anyone expect to get a bonus? Get real people. Suck it up and start working for your money like the rest of us.

A special note to the board of directors of the companies who are paying these outlandish bonuses and passing lavish compensation packages: The owners of the company are tired of over compensated under performing executives. If you don't believe this, check out all the shareholder lawsuits going on right now. Time to change.