From: Derek Granzow
SEC Chairman Christopher Cox
Dear [ SEC Commissioners ],
I am sending this email due to the overwhelming influence of the institutional imperative with regard to executive compensation.
I am asking you to act on increasing regulation with regard to executive compensation disclosure. Too often executives are paid (ridiculously in most cases) regardless of performance.
The recent news of Bob Nardelli's compensation and severance packages is an insult to every hard working American. After 6 years with Home Depot, Nardelli is leaving with an $210 million severance package. That is an exorbitant amount for 6 years of dismal performance. As reported in the AP, "The total package is seven times the $30 million Home Depot set aside last June for stores and employees that provide good customer service." That level of pay is sickening, and though the compensation of CEO's is very high due to high demand for quality CEOs, there must be proper disclosure of compensation and how it is figured relative to performance.
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.