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Execs at large public companies outline best governance practices

Executives and investors of some of the largest U.S.-basedcompanies got together and after numerous meetings suggested a list ofcorporate governance principles they believe should be implemented at publiccompanies.

According to the principles, named the CommonsensePrinciples of Corporate Governance, companies should pay substantial amounts ofdirector compensation in the form of stock, performance stock units or similarequity instruments — in some cases as much as 50% or more. The executivesbelieve that this will help align directors' interests with the long-termperformance of the companies, especially if companies require directors toretain a significant portion of their equity compensation.The guidelines also stated a similar preference in the mix of managementcompensation.

The principles also suggest that a company should not beobligated to provide earnings guidance. In addition, they stated that thoughcompanies can use non-GAAP measures to explain and clarify results toshareholders, they should not use such measures to obscure GAAP results.

The list of business leaders who signed an open letterpromoting the principles includes Warren Buffett at , Jamie Dimonat JPMorgan Chase &Co., Timothy Armour at Capital Group Cos. Inc., Mary Barra at General MotorsCo., Mary Erdoes at JPMorgan Asset Management, Larry Fink at , Jeffrey Immelt atGeneral Electric Co.,Mark Machin at CPP Investment Board, Lowell McAdam at , BillMcNabb at Vanguard AdvisersInc., Ronald O'Hanley at State Street Global Advisors Ltd., Brian Rogers atT. Rowe Price GroupInc. and Jeff Ubben at Valueact Capital.