March 16, 2006
Dear Ms. Morris:
I am writing to urge the SEC to act on its proposed rulemaking on executive compensation disclosure. Too often executives are richly rewarded even when their companys performance is below par. Without better disclosure, shareholders cannot evaluate whether executive pay packages focus management on achieving long-term shareholder value or unjustly enrich executives at the cost of shareholders.
The SEC is to be congratulated on crafting new rules which will make this crucial information more accessible to shareholders. The total compensation figure and the detailed compensation breakdown required in the new tables will be especially helpful because they will give investors clear information about exactly how much top executives are earning and why.
I urge the SEC to require that companies disclose pay-for-performance data. In order for investors to understand how pay and performance match up, companies need to explain more clearly what level of performance is necessary for a particular level of pay. I urge the SEC to require companies to disclose both the performance criteria and the numerical performance targets they use when setting executive pay.