November 7, 2002
Mr. Jonathon Katz
Dear Secretary Katz:
Re: SR-NYSE-2002-46 and SR-NASD-2002-140
The Los Angeles County Employees Retirement Association's (LACERA) Board of Investments appreciates the opportunity to comment on the New York Stock Exchange and the NASDAQ markets' proposed rule changes relating to shareholder approval of equity compensation plans.
LACERA's Board of Investments is responsible for the management of approximately $23 billion in pension fund assets serving over 132,000 active and retired members. LACERA currently pays out approximately $1.4 billion each year in retirement benefits. Approximately 70% of these benefit payments come from investment earnings. Therefore, re-building investor confidence in the market place is critical to LACERA's mission.
LACERA's Board of Investments is concerned about Corporate America's abuse of equity compensation plans. Consequently, the Board urges the Commission to require shareholder approval for all equity compensation plans. Given the dilutive effect these plans have on shareholders' equity, and no consistent rules for expensing options, LACERA's Board believes this is a prudent course of action. Furthermore, LACERA's Board does not endorse any exceptions to this rule.
The LACERA Board of Investments publicly and respectfully encourages the Commission to approve these rules.
c: Board of Investments (LACERA)