Subject: File No. S7-19-03
From: Douglas Estes

October 14, 2004

From: Douglas Estes []
Sent: Thursday, October 14, 2004 8:28 PM
Subject: Shareholders need a voice

Dear Chairman Donaldson:

Last week, SEC Commissioner Harvey Goldschmid criticized his colleagues at the SEC for dragging their feet on a proposed reform that would give shareholders more control over the companies they own.

The proposed rule would set up a two-step process for gaining access to the proxy statements. First, shareholders representing one percent of company stock would be able call for a shareholder vote on whether they can nominate directors. Then, if a majority of shareholders agree, the next year the shareholder group would be nominate up to three directors, depending on the size of the board. Alternately, if at least 35 percent of shareholders withhold votes for one or more directors, investors would be allowed to nominate directors.

Since one of the common strains of almost all scandal-ridden companies is that boards of directors are not accountable to shareholders, but rather controlled by friends and cronies of management, it would make sense to give shareholders more control over the companies that they own. But because the business community is lobbying furiously to avoid even this small step toward shareholder democracy, this reform is being stalled.

This rule is important. Shareholders should have more control over the companies that they own. Please do not cave into corporate interests.

Thank you.


Douglas C. Estes
629 Arguello Blvd. Apt. 303
San Francisco, CA 94118

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