August 17, 2009
Elizabeth M. Murphy, Secretary
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 20549
Re: Facilitating Shareholder Director Nominations
Release Nos. 33-9046 34-60089 IC-28765 File No. S7-10-09
Dear Ms. Murphy:
As a Retired Chairman and CEO of International Paper and a Director of Caterpillar, DuPont and Kellogg, I am writing to express deep concern about the provisions contained in the proposed shareowners proxy access rule. In fact, the rule contains several provisions which set back the efforts being directed to improve the working of corporate America and corporate governance.
The proposal will increase efforts on short term gains at the expense of working for the right long-term decision.
The rule will result in two classes of directors: one, the duly elected director and the second, the special interest director, which will negatively impact the working of the board and frankly, will make it more difficult to attract qualified directors to serve on corporate boards.
The rule will significantly increase the already excessive influence of proxy advisory firms.
Rather than advancing needed reform, it has become clear that the SEC is bowing to the political influence of the activist community.
I strongly recommend the rule not be promulgated in its present form and that substantial amendments be adopted. Notable
The threshold to nominate directors must be increased to at least 5% for individuals and 10% for groups and both must meet a time holding requirement before they are eligible to propose nominees.
The nominee must meet the directors criteria as contained in the corporate governance guidelines.
In addition, the amendments should modify the rule consistent with the problems outlined above.
As someone who has spent 40 years in the corporate community and is proud of the changes we have made to improve the functioning of corporate boards, I am saddened by this initiative.
John T. Dillon