Subject: File No. S7-07-13
From: Heinz Geyer
Affiliation: Managing Director, Pro Governance

October 7, 2013

Publishing a Pay Ratio without stiffening the regulation of Senior Executive Pay - in particular the compensation of CEO's - will not achieve a narrowing of the gap between senior executive pay and the pay that is received by the average employee. Pro Governance continues to argue that the compensation of CEO's should be made subject to mandatory voting by all shareholders and the votes of all shareholders with stakes above a minimum threshold (1 per cent?) should also be published. The major institutional investors in aggregate usually have a stake in the outstanding shares of listed companies that basically makes them responsible - and able - to exert a decisive influence on the compensation practice of the companies. In due course similar checks could be imposed on companies controlled by 'Private Equity' as the PE firms are effectively comglomerates that are using the public fund loophole to avoid supervision by their ultimate investors (not the fund managers allocating to their funds but the investors/beneficiaries that these managers administer)