The Wall Street Journal has published an excellent piece today on the problems with stock options.

What is the problem?

Shareholders, where do I begin? I recommend you read this and weep. Your company may have been hijacked by self-serving management whose actions are covered up to an extent by dubious accounting and share buy-backs.

Management control rather than share control has always been more valuable to people who seek their personal fortune through legal schemes. The problem here is that corporate Boards of Directors -- some not all -- have permitted and are profiting by the opportunity.

The granting of options as a privilege bestowed by shareowners to corporate managers as an inducement to make them work harder has somehow been converted to a right where some managers now expect to receive compensation without their having earned it.

There needs to be a re-assessment by the owners and managers of capital as to how Boards are elected and how they in turn appoint and monitor management.

Personally, I believe that the power has to remain in the boardroom, but I believe that management, like the independent auditors, ought to be invited to the boardroom, not, as it is today, to own and control that boardroom.

At the heart of almost every problem in life is the notion of conflict of interest. You remove the conflicts, and life becomes much simpler. Corporate life is no different.

There is, as we all know, a conflict between the many persons and organizations who own a corporation or property and the people who manage it. Unfortunately, within a widely held business corporation there are insufficient checks and balances to stop motivated people from exploiting this conflict. Consequently, management has gotten the upper hand and the directors -- in too many cases -- have ceased working for the owners, which has led to problems.

These are serious problems, involving in the aggregate, over the years, hundreds of billions of dollars.

The nonsense we see today must stop, and it will as soon as the owners and managers of capital become aware of such abuse and take action to sell the shares in those companies where we are being exploited.

We can all do our part for social equity.