Subject: File No. S7-17-07
From: John A Claras
Affiliation: President and CEO

August 3, 2007

Many of the problems with large public corporations (excessive CEO Pay, short-term gains vs. long-term growth, backdating stock options, accounting restatements) can be linked to poor oversight by the board of directors. The fact today is too many corporate boards of directors are hand picked associates of the CEO. If one examines many public company boards closely, one will find: attorneys or consultants which do work for the company or the CEO, personal friends of the CEO, suppliers (subcontractors or bankers) of the company. Often there is only 1 independent board member. A simple test of independence of the board is CEO pay and stock performance--- Pay is inversely proportional to independence of the board. Stock price appreciation is usually follows an independent board. The more independent the board the higher the stock price appreciation.

How did this happen? The change occurred slowly with the drop on the major stockholding families and the rise in the mutual funds. Mutual funds are renters of stock-- not owners. The major mutual fund companies have two reasons to vote with management- 1. Large companies choose who will administer their 401K investments. These investments are a large source of revenue in the form of fees. Mutual Fund companies with aggressive voting records will be removed from the 401K selection lists. 2. Mutual Fund companies do not wish to be involved with management of the company. Further, if the Mutual Fund company doesnt like the policy-- they just sell the stock. This policy encourages a short-sided view of the world by the CEO.

What changes are needed:
1.Shareholders with more than 1% of the stock should be able to nominate board members.

2.Board members should certify that they have no dealings with the company.

3.The stockholders, as is done in Europe, should vote CEO pay on. This forces the CEO to justify the pay vs. performance of the company.

4.Shareholders with more than 10% of the stock should be granted a seat on the board.

5.Long term compensation should be considered such as stock that vests after 10 years or 3 years after the CEO leaves the company.

What these changes will do is return our great corporations to a long-term view of the world. Most CEOs are good, smart capable businesspeople.