From: Denise Sipple
Sent: August 7, 2006
Subject: File No. S7-03-06

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. In the past few years, working families have seen their retirement security go up in smoke. But in the same period, corporate CEOs have gotten enormous new retirement packages worth millions a year. Too often, executives' compensation packages have little to do with the performance of the companies they lead. And while executives are required to report their pay to the Securities and Exchange Commission (SEC), they often try to hide the true amounts behind complex accounting tricks. The SEC can act now to help stop this abuse. The SEC can finalize these new proposed rules that would force companies to describe executive compensation packages in plain English and require them to estimate the total dollar value of all the pay.

As executive pay continues to spiral upward, I applaud the SEC is considering updating and improving its pay disclosure rules.
Unless an executive compensation consultant is hired to crunch the numbers, it is nearly impossible for investors to determine how much their executives are paid. For example, CEO pension benefits are poorly disclosed under the current rules, and CEOs take advantage of that fact to fatten their retirement pay. I thank the SEC is proposing new CEO pay disclosure rules in the first rule update since 1992. I am comforted that the SEC proposal will require companies to disclose executive compensation data in "plain English." In addition, for the first time companies will be required to provide a dollar estimate of their executive's pension benefits, as well as a "grand total" compensation figure. These changes will go a long way to make CEO pay more transparent and clear.

I truly believe that the SEC can and should go further in its proposed rule making. The biggest concern of investors is that CEO pay is not linked to performance. However, the proposed SEC rule does not require companies to disclose performance targets.
Instead, companies can avoid telling their shareholders this information for "competitive reasons." This lack of disclosure is unfair to shareholders, who, as the company owners, have a right to know. By setting a new standard in how compensation is reported, the SEC can help investors better compare executive pay with company performance. But until the SEC requires companies to disclose the numerical targets that CEOs are being measured against, the executive compensation system will continue to be a "black box." Executive pay reform will only happen when shareholders are allowed to see how CEO pay is set.


Denise Sipple
69 Waterman Ave.
Rumson, New Jersey 07760