According to one prominent experty on corporate governance, Barack Obama’s campaign was wise to accept the resignation of James Johnson, but the selection of Johnson to lead Obama’s vice presidential selection committee in the first place remains a baffling one.
"It’s a judgment issue," said Charles Elson, head of the Weinberg Center for Corporate Governance at the University of Delaware. "Why would you pick him to begin with? I knew about him. I knew his history. And if it suddenly came to my mind, why wouldn’t it come to [Obama’s]?"
Johnson headed the compensation committee at the Minnesota-based UnitedHealth Group, which awarded more than $1.4 billion in stock options to its chief executive before he was forced to return nearly $620 million of that money as a result of a settlement with federal regulators and shareholders. That case, among others, led Obama to introduce legislation in the Senate to give shareholders a greater say on the compensation packages of departing C.E.O.s. Obama’s leading role on that legislation was what made Johnson’s selection so jarring.
Elson said that when he heard Johnson had been selected, "The first thing that came to my mind was: UnitedHealth care–wow, that’s strange."
Elson said that from the corporate governance point of view, picking Johnson could only really have ended badly.
"If it was such a good idea, he wouldn’t have resigned," said Elson. Asked if Johnson needed to resign, Elson added, "I think it was probably a wise move on both parts."
"Given that Obama has been a leader in the ‘Say on Pay’ controversy and having his adviser on the most important selection he is going to make in the next couple of months be an individual who some would argue found himself in the middle of a significant controversy on pay, I think it represented a bit of an odd mix."