September 28, 2007
Ladies and Gentlemen:
Stockholders in European publicly traded corporations (especially the U.K.) have more rights and more control over directors than owners of similar U.S. firms. Perhaps this lack of real accountablity is a large reason why directors and top management in America enjoy far higher pay than their European counterparts. Yet the other 99% of employees in the U.S. earn only similar pay to those in Western Europe.
Compensation of the top five executives in most of America's publicly traded firms is not only far higher than our international competitors, but it continues to grow at rates that cannot be sustained in future decades. Unchecked by the owners, American capitalism will be at risk.
Stockholders need more power to reign in director and CEO overpay, overly elaborate headquarters and unnecessary corporate jets. The ability to embarrass or replace those who abuse power will best keep America competitive over time.
Stockholder resolutions are usually only advisory, but they provide embarrassment power to help correct poor leadership. Majority voting in uncontested elections is a perfect example of positive and successful shareholder resolutions in recent years.
Not only should we keep the ability of shareholders to submit resolutions, the SEC should require that corporations adopt resolutions earning over 50% support. The wishes of owners should be respected, as they are in other spheres of capitalism and democracy in America.
Thank you for your consideration.
Frank Coleman (Cole) Inman
Corp. Governance Adviser and Fmr. Business Professor
600 Cherry Drive #3
Eugene, Oregon 97401-6644