April 6, 2005
Securities and Exchange Commission
Dear Securities and Exchange Commission,
As a concerned American and shareholder, I am writing to urge the Securities and Exchange Commission to act on its proposed rule-making regarding corporate executive compensation disclosure.
In our current culture, most top executives are richly rewarded even when their companies' performance is below plan. As it currently stands, shareholders, employees and the general public cannot evaluate whether executive pay packages are unjustly enriching executives at shareholder cost or providing fair compensation.
The newly proposed rules will make this crucial information more readily accessible to shareholders and to the public. The new requirements to disclose total compensation figures, pensions and detailed compensation breakdowns will fully expose exactly how much top executives are earning and why.
I believe that CEO pay should be set by independent directors - not by cronies with conflicts of interest in the matter. Under the proposed rule, a director could secretly do $120,000 in business with a company, an amount that is more than four times the average worker's annual pay of $27,460. Shareholders should be told if directors have potential conflicts of interest, no matter what the amount.
I also 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 performance targets they use when setting executive pay.
Please look out for the interests of all Americans by doing everything in your power to tighten up the SEC regulations regarding executive compensation, as outlined above. Thank you.