Why haven’t Americans taken to the streets to demand financial reforms so desperately needed in this country?

As a lifelong financial services provider, I find myself constantly mystified that Wall Street and major corporate CEOs are still running roughshod over the average investor, who increasingly is putting his or her savings in money market instruments and debt securities instead of equities.

Greed and hubris are now also firmly entrenched in the board rooms of Corporate America.

Why is it necessary to pay the CEO of a publicly traded company a multimillion dollar salary and bonus and, when he proves to be a dud, give him more millions to leave?

As an example, consider the way Hewlett Packard’s board of directors chose to become the poster child of the ridiculous severance package.

Beginning in 2005, with the departure of then CEO Carly Fiorina who resigned and was given a $21.4 million cash severance in addition to another $2.1 million in stock grants, the HP board began a run of excessive severance packages. The next CEO, Mark Hurd, exited scandalously with a cash payment of $12.2 million.

Next up was CFO Cathie Lesjak, who filled the gap for three months while a permanent replacement was sought. Lesjak was granted a $1 million cash bonus and $2.6 million in stock grants for “exceptional service.” 

The board’s new CEO choice, Leo Apotheker, was ousted after only 11 months. He took home his $1.2 million salary, a $4 million signing bonus, a $4.6 relocation award, and stock at the time worth close to $18 million.

The total grants for the last three departed and interim CEOs cost HP shareholders $83.3 million.

As David Goldman wrote in CNN Money last September, “Hewlett-Packard’s CEO revolving door is costing the company a fortune.”

One hopes this board did not receive lifetime directorships.

No rational person can argue that the HP Board was acting in the best interest of its shareholders.  Therein lies part of the problem: Who has the loyalty of the board of directors -- the CEO or the shareholders? If the CEO chooses the board, sets the members’ salaries, sets the agenda and chairs the meetings, aren’t the directors beholden to the CEO?  Who is supposed to represent the shareholders? 

Following the market collapse of 2008-09 Congress passed financial regulation, the “Dodd-Frank” bill, giving shareholders the right to approve executive compensation and bonuses.

These votes are not binding and therefore are mainly symbolic. However, the most recent non-binding referendum of Citicorp’s CEO Vikram Pandit’s $15 million pay plan was rejected by more than half the shareholders at the annual meeting in Dallas.

While this is a hopeful sign, it is important to note that England adopted a similar law during this period, but it made its law binding,

Significant reform is needed in this area of board governance. The board’s duty should be to represent the shareholders. Loyalty to the CEO should not trump this duty.

I am amazed by the statistic that the average CEO at today’s Fortune 500 company makes 380 times that of the average worker. Average salary and bonus for these individuals is $12.94 million. The average CEO pay increased 13.9 percent in 2011 while the average worker’s salary increased by 2.8 percent.

It is hard to understand how a board of directors can value the service on one individual that much. A perfect example of this type of mentality occurred recently at Duke Energy.

In early July, Duke Energy’s board ousted CEO Bill Johnson, 64 years of age, after one day on the job, at an estimated cost of $44 million.  As Mike Myatt, a contributor to Forbes titled his article, “$44 Million for A Day – Nice Work If You Can Get It.”

It is difficult to understand any rational vote for this compensation. The board members must have checked their moral compasses at the door of their meeting.

Unfortunately most boards generally accept the salary and bonus recommendation as presented by management. I would bet termination severance is calculated to avoid litigation or the perception of fairness, rather than on the interests of the shareholders.

Executive compensation discussions by boards of  directors clearly do not focus on real dollars that are needed to support average life style. Current CEO compensation does explain how 1 percent of the public has captured 93 perecent of the gain in market value in the past 12 months.

It is time for a serious discussion of financial reform. We need to stop making a joke of Dodd-Frank.  Wall Street, as J.P. Morgan’s CEO Jamie Diamond learned the hard way after his bank’s still-to-be determined trading loss, should stop crying about how financial regulatory measures are killing the markets.

The media have a responsibility to understand the problems that exist and educate the public as to what is real and what is imagined. This must be crafted in language the average reader or viewer can understand. In-depth, rather than “gotcha” reporting, must be the order of the day.

I believe that serious problems deserve a serious airing and that a little daylight will go a long way toward creating an atmosphere for continued reform. Until then, the average investor has no incentive to return to the markets unless blatant excesses cease. Only when that happens will our financial system truly recover.

John Levis is an investment banker now with his own firm.