March 9, 2006
Dear Chairman Cox:
Thank you and your shining knights for your hard work to force corporations to be honest on their executive compensation packages. This is long overdue to stop the raid of corporate funds at the expense of lower-paid employees and shareholders of the company. As CEOs take more and more of the assets and profits of a corporation, there is much less for other employees and shareholders. The world has changed immensely since 1934 and the 1934 regulations do not work in a 2006 world.
Corporate America has become very skilled in concealing total numbers in corporate compensation packages: put a little information on their website, more in their 10Ks on the SEC site and slip the remainder into the proxy statement in very small print. Even then, there is more hidden in Top Hat plans, Golden Parachutes and creative accounting so any numbers found are only a ballpark figure unless you are a corporate CPA. If they believe they really deserve those packages, why do they work so hard to hide them? You are only requiring that they take the time they are using now to hide the information to disclose it clearly in plain English. If a company goes bankrupt, is bought out by another company or fails, CEOs get a Golden Parachute, employees and shareholders get an empty brown paper bag.
This is a great step forward, but we need Rep. Barney Franks HR 4291 Protection Against Executive Compensation Abuse Act (currently in the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises) to expand the new regulations by taking the compensation package approval away from the buddy system of Boards of Directors who abandoned their fiduciary responsibilities to shareholders and employees long ago and giving the shareholders of the company the right to approve or disapprove the packages.
Patricia Caryl Jorgensen