April 7, 2005
Securities and Exchange Commission
Dear Securities and Exchange Commission,
I am writing to urge the Securities and Exchange Commission to act on its proposed rule making on executive compensation disclosure. Too often executives are richly rewarded even when their companies' performance is below par. Without better disclosure, 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 accessible to shareholders and the public. The new requirements to disclose total compensation figures, pensions and detailed compensation breakdowns will make it clear exactly how much top executives are earning and why.
I believe that CEO pay should be set by independent directors. 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.
This would atleast make the shareholder and the employee of such company alot more aware of the growing crisis.
Many employers who have unionized employees use performance of the company whether it good or bad to determine mediocre wage increases, additional compensation, and health and welfare benefits.
Even when such company is doing well and making money from the productivity of its employees, they fail to offer or negotiate a decent wage increase and ask for the employees and the uniions which represent them to give up more than that company is willing to offer on the negotiating table.
I feel this would be a small victory for the shareholder and the employees and the Unions which represent them. It is about time that the feild was leveled a little bit. Let these CEO's have to negotiate their wage or justify why they can have massive salaries, benefits, and retirement pensions when the employees who work for that particular company are barely making it in the Middle Class Killing American Economy.