Subject: File No. S7-03-06
From: Robert Welyki, CPA

January 10, 2007

Dear SEC Commissioners and Staff,

I apologize in advance if I am being too informal or brief in my comments. While I am writing on my own behalf, I am one of the individuals that will have to help implement the new disclosure requirements for my employer.

I generally support changes in the amendment and the objective of to provide a clearer view of the annual compensation cost earned by executives and the annual compensation cost to a company, consistent with the timing of financial statement reporting.

I have two concerns with the amendment. The first is with respect to the fact that estimated forfeitures are not included in the compensation expense to be reported in the Summary Compensation Table. I believe this will create some amount of confusion as to whether the amount of compensation disclosed is that reflected in the financial statements with respect to the executives. In addition, I believe the requirement to exclude the estimate forfeitures creates unnecessary complexity, cost, and burden on companies to adopt the new requirement, especially in the initial year. Given that the impact of estimated forfeitures in effect goes to zero over the life of the award, it is largely a timing item. With all do respect, I do not believe the potential impact of estimated forfeitures warrants the additional complexity of having a separate SFAS 123R amount for disclosure purposes.

Second, I believe it would be helpful to clarify whether the impact of estimated forfeitures should be included in determining the grant date fair value that is to be disclosed in the Grants of Plan-Based Awards Table. While I believe the discussion to the new rules indicates that estimated forfeitures are not to be considered in determining compensation cost under the new rules, I have read at least one analysis of the new rules that indicates they should be considered in determining this amount. It would be helpful to clarify the treatment of estimate forfeitures in the instructions similar to how they are currently addressed with respect to the compensation cost that is to be disclosed in the Summary Compensation Table.

Thank you for considering these comments.


Robert Welyki