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. I was laid off so a rich executive could take a huge pay package. I got no severance package while he will get a huge paycheck. I believe that the least that can be provided is better disclosure.
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 if we could ever find any. I would like to see directors chosen from groups who do not spend time rubbing shoulders with rich CEO's. 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.
Why is it that the hard working employee is laid off while the corporate high level executive walks away with huge gains even in cases where the companies fail. I won't walk away with a huge pay package and there are very few high paying jobs available.