March 29, 2006
Dear Ms. Morris,
Regarding the eliminating the performance graph:
After reading 370 pages and seeing the number of new tables the SEC is proposing be added to the various filings, I do not see why the SEC would get rid of the performance graph. The number of tables the SEC is proposing is too high, and to consider throwing out the performance graph is moving in the wrong direction. The multiple-table format proposed will make things run together and become confusing. You will also have to give instructions to the reader as to how to interpret the numbers within the proposed tables.
Plain-English disclosure is the key to any new tables shown and to enhancing the value of the performance graph.
The performance graph is concise and easy to understand. This is what my investment has done, and this is how it compares to the general market and the industry of the company. Its the most plain-english portion of the DEF 14A at the present time. If plain-english is the direction the SEC wants to go, it would be a logical thing to keep.
I agree with some of the previous comments that there needs to be a link between the graph and the plain-english conversations the SEC would like to implement. I sincerely hope you are able to get corporations to abide by the plain-english rules, as I have not read many proxy statements that are ever in anything but legal jargon. At times it is almost like reading information in another language.
Regarding Costs of Implementation:
As a CEO, I am familiar with how much lawyers are paid to make sure that disclosure is done properly, and I fear that you have under-estimated the total costs to the public companies, over the course of the next few of years. You also make no reference to the costs dropping back down after these changes are implemented. Companies should bare the costs for properly informing their shareholders, but you need to give them time to prepare for such costs.
No lawyer or law firm is going to oppose the changes because it is a gold mine for them. More to do, and more hours to bill.
The proposed rules are going to generate millions of dollars of business for law firms across the country regardless of what the changes end up being. Public companies should be made aware so that they can find the most cost effective way of coping with the changes.
Thank you for giving us all the chance to comment on the proposed rule changes our regarding executive compensation.
Kathy B. Wheby
Roanoke Valley Federal Credit Union