April 7, 2005
Securities and Exchange Commission
Dear Securities and Exchange Commission,
Unions are expected to disclose every relationship and every penny exchanged in public disclosures. The Bush administration claims that this is necessary to prevent corruption. This view plays on past union indiscretions portrayed in movies and television, as well as a handful of corrupt Local unions that refuse to follow the example of those of us in the labor movement who have taken control of our unions and put an end to corruption. The few cases of union corruption pale in comparison to the corruption and exploitation that takes place in U.S. corporations. Hidden assets, undetected illegal labor practices, wage-shaving, etc. are daily occurences, yet there is no requirments for disclosure from private companies.
Therefore, I am writing to urge the Securities and Exchange Commission to act on its proposed rule making on executive compensation disclosure. Too often executives are richly rewarded even when their companies' performance is below par. Without better disclosure, shareholders, employees and the general public cannot evaluate whether executive pay packages are unjustly enriching executives at shareholder cost or providing fair compensation.
The newly proposed rules will make this crucial information more accessible to shareholders and the public. The new requirements to disclose total compensation figures, pensions and detailed compensation breakdowns will make it clear exactly how much top executives are earning and why.
I believe that CEO pay should be set by independent directors. Under the proposed rule, a director could secretly do $120,000 in business with a company, an amount that is more than four times the average worker's annual pay of $27,460. Shareholders should be told if directors have potential conflicts of interest, no matter what the amount.
I also urge the SEC to require that companies disclose pay-for-performance data. In order for investors to understand how pay and performance match up, companies need to explain more clearly what level of performance is necessary for a particular level of pay. I urge the SEC to require companies to disclose both the performance criteria and the performance targets they use when setting executive pay.