From: Sarah McKee
Securities and Exchange Commission
Dear Securities and Exchange Commission,
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. In fact, I have seen news analyses that equate excessive executive pay with poorer, not better, performance.
In other words, the more corner-office perks a company bestows, the worse its performance for investors is likely to be.
Without better disclosure, shareholders, employees (who in many cases are also shareholders), and the general public cannot evaluate whether executive pay packages are unjustly enriching executives at shareholder cost or are providing fair compensation.
The newly proposed rules will make this crucial information more accessible to shareholders and to 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.
CEO pay should be set by independent directors. However, 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.
This is a blatant conflict of interest. It should not be secret.
I also urge the SEC to require that companies disclose pay-for-performance data.
In order for investors to understand whether pay and performance match up, companies need to explain more clearly what level of performance is necessary for a particular level of pay.
For the sake of the health of U.S. business, investors, and employees, I urge the SEC to require companies to disclose both the performance criteria and the performance targets they use when setting executive pay.