Toyota, Ford and Gm Essay

4993 Words20 Pages
1: Corporate Governance Both Ford and GM completely abide by NYSE corporate governance standards, as they are domestic US companies. Ford and GM are required to strictly follow NYSE corporate governance standards. Toyota is permitted to follow certain corporate governance practices complying with Japanese laws and regulations, the NYSE has ruled that Toyota is exempt from certain NYSE corporate governance requirements. A significant difference in Toyota’s corporate governance structure is that the company currently does not have any directors that can be deemed as independent directors. Another major difference is that unlike domestic US companies Toyota is not required to have shareholder approval of equity compensation plans,…show more content…
Eight core topics comprise the CGQ rating: (1) board structure and composition, (2) audit issues, (3) charter and bylaw provisions, (4) laws of the state of incorporation, (5) executive and director compensation, (6) qualitative factors (7) D&O stock ownership, and (8) director education. Since the ISS only computes CGQ’s for American companies, we can only compare GM and Ford. Fords Corporate Governance Quotient as of March 2007 is better than 4.5% of S&P 500 companies and 52.5% better than industry competitors, while GM’s CGQ is better than 98.4% of S&P 500 companies and 100% of industry competitors. Clearly GM’s corporate governance structure is rated higher than Fords. All three of these companies are industry giants. Toyota’s market capitalization is 240.32b, GM’s market capitalization is 17.53b, and Ford’s market capitalization is 15.01b. The large difference in market capitalization between the competitors is because of falling share prices in GM and Ford, while Toyota’s share prices have been rising. This can also be attributed to the recent profitability of Toyota vs. Ford and GM. The difference in share prices also accounts for the large differences in average daily trading volume which is led by Ford ($7.94/share) whose average volume is 60,244,600 compared to GM (30.99/share) whose average
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