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(April 19,
2007)
Proudly representing retirees from the new AT&T Midwest
Region, SBC Midwest Region,
Ameritech, as well as the five Bell Companies in Illinois,
Indiana, Michigan, Ohio, and Wisconsin
CONGRESSIONAL ACTION CORRESPONDING
TO OUR SHAREHOLDER PROPOSAL!
Yesterday
(Wednesday, April 18) House Resolution 1257 was debated by a Committee
of the Whole on the floor of the US House of Representatives. The
‘pro’ floor leader was Representative Barney Franks (D, MA). The
‘con’ floor leader was Peter Roskam (R, IL).
Excerpts from
Rep. Franks’ opening remarks:
This is a bill to further the workings of the
capitalist system of the United States. It has one very specific
provision. It says that the shareholders, the owners of public
corporations, will be allowed to vote every year in an advisory
capacity on the compensation paid to their employees who run the
companies.
Now, Mr. Chairman, some might think this is
unnecessary. In a better world, it would be. But there is not now any
clear-cut, uniform, legal right for the shareholders to get such a
vote. Some corporations allow it, some do not. Some boards of
directors allow it, some do not. In a recent case, the SEC ordered
AT&T to allow such a vote, but it was because of certain circumstances
(the
AASBCR proposal –ed).
There is no general principle that allows it.
We do have, thanks to the Securities and Exchange
Commission under our former colleague from California, Mr. Cox, a
provision that I am sure many considered to be an intrusion into the
private affairs of corporations, because without regard to the wishes
of the corporations, the SEC under Chairman Cox has unanimously
adopted rules that require corporations to put in the annual proxy
form a chart of compensation for the top officials and an explanation
of the theory of the compensation by which they are there.
Understand that this is a decision by the SEC to
require corporations to do what they would not otherwise have done,
because it only applies to those who haven't done it.
We add one simple fact here. The SEC has said that
it does not have the power to go further and compel corporations to
allow the owners to vote. Our bill simply does that. Our bill simply
says, you will have on your proxy form, printed anyway, what the
compensation figures are. There is no debate about how they will be
presented. We require, if this bill passes, corporations simply to add
to that a box that says ``I approve/I disapprove,'' and you can check
it as appropriate. And the sole expense to the corporation is the ink
in printing ``approve'' or ``disapprove,'' and the tallying along with
the other tallying. There is no additional paper, there is no
additional anything else.
. . .
We are talking about real money. We are talking
about money that goes to these top executives that could be used for
other purposes. For example, when Mr. Nardelli of Home Depot received
a $210 million good-bye kiss that had been written into his contract,
when he was fired and given a $210 million consolation prize, Home
Depot was at the same time announcing that they were putting $350
million into improving the stores. Well, suppose Mr. Nardelli had been
sent out into the cold, hard world with only $50 million for the rest
of his life. $160 million more would have been available to add to
that $350 million for the stores, considerably more than a third. In
other words, that was a real number. If $350 million can fix up the
stores significantly, another $50 million or $75 million could have
increased that by up to 50 percent.
. . .
All we say is this: The shareholders own the companies,
and we believe the shareholders should be allowed to vote.
Now, some people have said that is up to the board
of directors, why are you singling out compensation for the CEO? And
there is a good reason. You can make arguments about corporate
governance one way or the other. We are not going beyond one point
here. The relationship between the CEOs and the boards of directors is
very different than most of the relationships the boards of directors
have. The CEOs and the boards of directors select each other. There is
a lack of an arm's length situation there that we think makes it
appropriate to single it out and let the shareholders vote.
If you wish to
follow the progress of HR1257 (it was debated for an hour with no
deciding vote), you may go to
http://thomas.loc.gov/ ,
enter HR1257 in the Search Bill Text window, click the
Bill Number
button, and click the SEARCH button. To e-mail your member of
Congress, go to
http://www.congress.org/congressorg/home/.
Now put your 9-digit zip code in the “WRITE ELECTED OFFICIALS” box and
click the GO button. Next click your REPRESENTATIVE’s link. Then
click Send Message , followed by Compose Your Own Letter and Next
Step. Fill out the required boxes and add your letter. Then fill in
your Sender Information. (This is required because most Reps. don’t
have time to deal with non-constituents – and you might even get a
response. Be sure to read all the instructions – i.e., don’t put
your name in the body of the letter. CapWiz will do that for you.
My title was
“HR1257”. I chose “Commerce” as my Issue Area. And my letter was:
Corporate Board Compensation Committees tend to become inbred -
largely populated by CEOs of other corporations. This bill would
require Compensation Committees to justify their actions in print in
the Proxy Statement - at least enough to work toward a YES vote. It
would allow a little sunlight into the dark area of runaway executive
compensation.
It
looks as if our Shareholder Proposal is right in the middle of the
action. Please
vote “FOR” this proposal (Item 7 – Shareholder Proposal “D”)
immediately.
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