April 7, 2005
Securities and Exchange Commission
Dear Securities and Exchange Commission,
Because I do not want to re-invent the wheel, I am sending you a good letter already drafted for my signature. However, be advised that I am requesting this after considerable thought and recognition of the consequences of current behaviors of CEO's ... namely, to render the middle and lower income groups to SERFS. I really had thought we had left the dark ages, but it seems there is effort to wipe out people's financial and intellectual independence and the 40-hour work week. We are now up to 60-80 hours, uncompensated work. This is going to backfire once younger people wear themselves out and realize that all work and no family will kill their spirits and their creativity while the masters cruise luxury yachts. Please!
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.
Mary Lou Lindquist