Subject: File No. S7-03-06
From: David Quinby
Affiliation: Individual investor and retiree

April 10, 2006

Yes, thank you, I am all in favor of far more transparency in executive compensation. However, I am far more interested in your taking much stronger actions to seriously curtail what I believe to be the most serious abuse of stockholders rights since corporations came into existence: unsupervised, uncontrolled executive compensation. One has only to look at the CEOs compensation as a multiple of employee compensation, today vs. historically, to see how this problem has escalated in recent years as CEOs and Boards of Directors realized that they could freely vote themselves benefits from the companies largesse.

Historically, the pay for a manager (or CEO) of a company was determined by the owner(s) of the company. After all, this compensation came directly out of the profits of the company, and it was the owner(s) who created the company or bought it from someone else who had. Now, because of the vast size of companies and the millions of owners (stockholders) it has become impossible for the owners to effectively determine the pay of the CEO. To say that isnt true (i.e., that the stockholders can simply make proposals for the board of directors and vote their proxies) is totally unrealistic. Even huge numbers of stockholders, represented by organizations such as the California Public Employees Retirement System (CALPERS) trying to assert its stakeholders ownership interest, have been rebuffed through the political process of appointing different directors to oversee those benefits. Mutual fund companies have failed to take any action to vote their blocks of shares in the interest of the owners (stockholders).

I believe members of the Board of Directors should be made legally liable for making decisions in the interests of the stockholders, not themselves nor the CEO. Additionally, I believe mutual funds must also be made legally liable to vote shares in the interest of the stockholders.

Presently, the CEOs and Boards of Directors of large publicly traded corporations have no supervision. The only effective supervision we can have is through SEC rules in combination with mutual funds and other large intermediaries (such as large pension-funds like CALPERS) being legally required to vote their shares in the interest of the stockholders.