August 11, 2006
SEC Chairman Christopher Cox
Dear SEC Chairman Cox,
Mutual funds are an increasingly important savings vehicle for tens of millions of working Americans like me. We are the owners of these funds and we bear the risks if they are dominated by self-interested insiders. We look to the Securities and Exchange Commission (SEC) to protect us. I am writing to express my strong support for the proposed rule requiring that mutual fund boards have an independent chairperson and at least 75 percent independent directors. These rules were among the most important reforms adopted by the SEC in the wake of the mutual fund trading and sales abuse scandals.
A recent study by AFSCME and The Corporate Library found mutual funds provide a rubber stamp for excessive management pay, supporting more than three-quarters of all management pay proposals. Ninety percent of institutional investors think the current system overpays executives. We need independent directors to stand up to the excesses of the money managers.
The Investment Company Act requires that mutual funds be managed in the interests of their shareholders. Requiring independent directors and chairpersons will help ensure this safeguard for the small investor, to make sure the little person gets a fair shake. For the majority of excutives there pay is rediculously high. When a corporation is in struggling times the top excutives seem to walk w/the cash. Highly compensated top employees are understood. When it takes 3-4 employees within a corporation a lifetime, if that, to earn what top excutives are compensated for in one year,there needs to be a fix.Bonuses, stock options beyond belief, soaring excutive pay, over 400% increases when pay raises for employees are not enough to keep w/inflation. Savings lost while excutives walk away in plush settings. Eventually the right things need to happen. There will be a payday..