[Congressional Record Volume 151, Number 85 (Thursday, June 23, 2005)]
[Extensions of Remarks]
[Pages E1318-E1319]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    EXCESSIVE EXECUTIVE COMPENSATION

                                 ______
                                 

                           HON. TERRY EVERETT

                               of alabama

                    in the house of representatives

                        Wednesday, June 22, 2005

  Mr. EVERETT. Mr. Speaker, with the passage of the Sarbanes-Oxley Act, 
it is worth noting that this country has seen an increase in consumer 
and investor confidence, and a significant market recovery. Corporate 
scandals and plunging stock prices forced Congress to pass the most 
sweeping regulation of corporate activity since the 1930s, when the SEC 
was created.
  Many positive developments have resulted from the passage of 
Sarbanes-Oxley, however more can be done. I fear that we have not seen 
the last of the corporate abuse exhibited by the Enrons and Worldcoms 
of the world, especially with regard to the raiding of pension funds.
  I am concerned about a growing number of corporate executives in 
America who are less than fully accountable to their shareholders or 
employees. Some continue to demand and receive outrageous salaries and 
perks while their companies flounder. In some cases, these executives 
face civil and criminal investigations for fraud and corruption.
  The current environment under which Corporate America pays its 
executives allows for minimal, if any, input by the shareholders. 
Oftentimes their will is suppressed, as was the case with Alcoa Inc. in 
2003, when the board of directors rejected a proposal approved by the 
majority of shareholders that urged the board of directors to seek 
shareholder approval for future severance agreements with senior 
executives. Boards of directors continue to reward their executives 
with outrageous retirement packages regardless of the company's 
performance. Not only is the discrepancy between pay and performance a 
problem, but the fact that the disclosure to shareholders comes months 
after the payments are made is troubling.
  One of the most disturbing facts of these misguided or criminal 
actions by corporate leaders is that their employees see their hard-
earned profit sharing plans disappear. Yet, these corporate ``rock 
stars'' ride off with their guaranteed benefits package intact, while 
the

[[Page E1319]]

workers and shareholders take it on the chin. Their investments and 
savings, tied to corporate growth and built up over the years, have 
vanished. Plans of retirement are halted, either permanently or 
indefinitely; and many workers find themselves forced to work in their 
golden years.
  Today, I have introduced legislation to require an advance disclosure 
to a company's shareholders upon the creation of or substantial 
increase in special retirement plans for executives. This will bring 
desperately needed transparency to the boardroom. Under current law, 
benefits payable under these plans are not considered reportable 
compensation, which is why this disclosure is necessary. This would 
allow shareholders to be proactive in determining whether or not their 
CEO deserves the millions he or she is getting paid.
  I understand that this is a departure from the typical form of 
disclosure, however I believe the current environment under which 
Corporate America operates needs to change. We must improve investor 
confidence, and the advance disclosure of excessive corporate 
compensation will move us in that direction.

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