March 24, 2006
March 23, 2006
Ms. Nancy Morris
U.S. Securities Exchange Commission
100 F Street N.E.
Washington, DC 20549-0213
Dear Ms. Morris,
My comments are limited to the proposed Elimination of the Performance Graph:
Removal of the performance graph as a requirement for the proxy statement would be a mistake. The performance graph is an aide to shareholders, and the requirement to present total returns is vital for both public companies and investors alike. From an investor relations standpoint, the goal of the proxy statement is clear and concise disclosure that allows the shareholders to feel confident about the investments they choose to make. The performance graph is a perfect example of such disclosure.
Companies should be able to show the benefits of their dividends to their shareholders, and basic pricing data does not incorporate reinvestment of dividends into the equation. To give you an example the effect reinvested dividends had on the SP 500 in 2005 was 38.89%, which is a substantial impact to say the least. Without dividends, the SP 500 was up only 3.0%, however, the impact of reinvested dividends gave it a total return of 4.91%
Also, I would like to know where I can obtain total return data for companies and indexes such as the SP 500 or NASDAQ Stock Market or the Nasdaq Biotechnology Index, for specific time periods. I do not believe it is possible. Many websites offer conflicting historical data, some incorporating splits, some not. The indexes are not weighted according to market-capitalization, and do not assume dividend reinvestment.
Yahoo Finance, for instance, shows adjusted closing prices as well as regular closing prices, yet they do not explain exactly what the numbers are adjusted for. CBS MarketWatch and other services also list varying prices from time to time. So how can we be sure that internet data is correct given these discrepancies?
Thank you for the opportunity to comment.
Robert A. Walker III
San Francisco, CA