[Congressional Record Volume 155, Number 126 (Wednesday, September 9, 2009)]
[Extensions of Remarks]
[Pages E2220-E2223]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 CORPORATE AND FINANCIAL INSTITUTION COMPENSATION FAIRNESS ACT OF 2009

                                 ______
                                 

                               speech of

                          HON. SPENCER BACHUS

                               of alabama

                    in the house of representatives

                         Friday, July 31, 2009

  Mr. BACHUS. Mr. Speaker, the following trade association letters are 
offered for the record in opposition to H.R. 3269 in order to 
supplement my remarks during debate:

                                                    July 30, 2009.

          To the Members of the U.S. House of Representatives

     Re Opposition to H.R. 3269, Corporate and Financial 
         Institutional Compensation Fairness Act of 2009.

       The undersigned organizations strongly oppose H.R. 3269, 
     the ``Corporate and Financial Institution Compensation 
     Fairness Act of 2009.'' We believe that the bill would result 
     in substantial unintended consequences, especially the 
     mandatory annual vote on pay requirement in section 2 and the 
     precedent-setting authority granted to the federal government 
     over executive and employee compensation in section 4. In 
     sum, we believe the bill would result in a ``one-size-fits-
     all'' approach to compensation that would have substantial 
     negative implications for proper functioning of the corporate 
     governance process, responsible growth, and effective risk 
     mitigation that, when coupled with other proposed 
     legislation, would extend well beyond the financial services 
     industry.
       Each of our organizations fully supports effective measures 
     to increase awareness and mitigation of excessive risk in 
     compensation. We believe that the board of directors, acting 
     through an independent compensation committee, should be 
     responsible for setting compensation because it is so closely 
     linked to business strategy and succession planning. While 
     many have developed and circulated principles to improve 
     compensation and corporate governance, companies across all 
     industries are taking steps to reinforce their understanding 
     of these issues and are taking action to revise practices 
     that may encourage excessive risk taking. Many of these 
     changes, such as majority voting for directors, independent 
     compensation committees, advisory Say on Pay votes, 
     eliminating staggered boards, have been occurring on a 
     company by company basis for a long period of time, without 
     government mandates.


                  Government Control over Compensation

       We oppose Section 4 of the bill because it would give the 
     bank regulatory agencies authority to set the structure and 
     thus the amount of executive and employee compensation 
     provided in the form of incentives. While recognizing the 
     federal government's role in ensuring the safety and 
     soundness of our financial institutions, these provisions 
     would effectively transfer authority for determining how a 
     substantial part of compensation at these firms should be 
     structured from the Board (for executives) and the company 
     (for other employees) to a consortium of regulatory agencies. 
     Our concerns include:
       The adoption of a one-size-fit all approach, which does not 
     accommodate a company-specific approach to pay. The financial 
     industry is expansive, and an incentive structure that may be 
     deemed risky at one organization may be perfectly acceptable 
     at another, depending on the company's business strategy, the 
     risk profile of the organization, and mitigating elements of 
     the total pay program. The legislation instructs the agencies 
     to  take a one-size fits all approach by prohibiting pay 
     structures that ``could threaten the safety and soundness 
     of covered financial institutions.''
       Even if a company-specific approach were taken, the federal 
     government has neither the experience nor expertise to set 
     executive compensation arrangements for a wide variety of 
     financial institutions. The legislation will replace the 
     informed judgment of the board of directors and compensation 
     committee with the cursory knowledge of a federal regulator, 
     eroding the authority of the board and its ability to closely 
     tailor compensation to the company.
       The Obama Administration did not ask for such expansive 
     authority, no doubt a result of the interpretive and 
     enforcement problems created by the poorly crafted executive 
     compensation restrictions in the American Recovery and 
     Reinvestment Act, which caused several companies to shift 
     more pay to guaranteed salary, rather than reasonable 
     performance-based incentives, in order to comply.
       In addition, because our associations represent companies 
     across a variety of industries, we are also extremely 
     concerned that this model of pay regulation would expand to 
     other industries or situations, further putting the federal 
     government in control of pay decisions for private companies. 
     This legislation would establish a form of compensation 
     regulation for employees who interact with consumers. Rather 
     than creating a new bureaucracy, we believe a more effective 
     approach to regulating risk in incentives would be to 
     establish a clear set of principles for mitigating risk 
     against which the regulatory agencies could review pay 
     arrangements.


                     A Mandatory Annual Vote on Pay

       Beyond section 4 of the bill, we also oppose an annual 
     mandatory shareholder vote on executive compensation because 
     it does not achieve the ends sought by proponents, is not 
     sought by a majority of shareholders, and would not improve 
     clear communication between shareholders and the board. While 
     we oppose the requirement embodied in H.R. 3269, there may be 
     viable alternatives that were unable to be explored with the 
     limited time frame taken by the House Financial Services 
     Committee in considering this legislation.
       The Board of Directors has a fiduciary duty for managing 
     the company on behalf of all shareholders. The board's 
     compensation committee is responsible for linking 
     compensation incentives to confidential business strategy, 
     aligning pay with the assessment of individual executive 
     performance, and using long-term incentives to support the 
     company's succession planning process. Annual say on pay 
     votes would push compensation structures away from a company-
     specific approach to ``cookie-cutter'' arrangements designed 
     to ensure a high vote total.

[[Page E2221]]

       Despite the economic environment, shareholder resolutions 
     seeking a say on pay have only received a majority support at 
     roughly 30 percent of the companies at which they were 
     offered in 2009. A 2008 independent study by a leading 
     academic found that among large institutional investors, only 
     25 percent supported a shareholder vote.
       An annual mandatory vote requirement in the United Kingdom 
     has not reduced the overall level of compensation and has 
     resulted in less of a link between pay and performance.
       Congressional attempts to regulate amounts or structures of 
     compensation have typically backfired--increasing 
     compensation or changing practices in unforeseen ways 
     contrary to the intent of the restrictions. One need look no 
     further then the history of stock options as a case study of 
     this premise. While we oppose H.R. 3269 in its current form, 
     because the legislation has been available for only a short 
     time, we believe that more time is warranted to give Congress 
     and interested parties an opportunity to fully analyze and 
     discuss the potential for harmful unintended consequences.
       Thank you for your consideration of our views. We look 
     forward to working with you on this and other legislation.
           Sincerely,
         Center for Executive Compensation, National Association 
           of Manufacturers, Retail Industry Leaders Association, 
           U.S. Chamber of Commerce.
                                  ____

                                        Chamber of Commerce of the


                                     United States of America,

                                    Washington, DC, July 27, 2009.
     Hon. Barney Frank,
     Chairman, Committee on Financial Services, House of 
         Representatives, Washington, DC.
      Hon. Spencer Bachus,
     Ranking Member, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Chairman Frank and Ranking Member Bachus: The U.S. 
     Chamber of Commerce, the world's largest business federation 
     representing more than three million businesses and 
     organizations of every size, sector, and region, believes 
     that strong corporate governance is an important part of the 
     foundation for a vibrant and growing economy. In February, 
     the Chamber issued a Statement of Principles providing, among 
     other things, that executive compensation should balance 
     individual accomplishment, corporate performance, adherence 
     to risk management, compliance with laws and regulations, and 
     the creation of shareholder value. The complete Statement of 
     Principles is attached. The Chamber opposes H.R. 3269, the 
     ``Corporate and Financial Institution Compensation Fairness 
     Act of 2009,'' because it is inconsistent with these 
     Principles.
       Section 4 of H.R. 3269, particularly when read in 
     conjunction with the compensation provisions proposed in H.R. 
     3126, the ``Consumer Fairness Protection Agency Act of 
     2009,'' would establish direct government control and 
     regulation of compensation for executives and workers alike. 
     Employee compensation should be a decision by appropriate 
     levels of management or the board of directors on a variety 
     of factors such as merit, promotions, or cost of living 
     increases. Furthermore, changes in corporate governance 
     should occur through a dialogue between management, 
     directors, and shareholders, as allowed by controlling state 
     corporate law. The Chamber does not believe that the command 
     and control regulatory scheme set forth in this legislation 
     would lead to the economic growth and job creation that 
     America desperately needs.
       The Chamber is particularly concerned with a number of 
     provisions in H.R. 3269 and offers the following 
     recommendations:
       1. This legislation would have federal agencies regulate 
     the compensation of a vast number of employees of covered 
     firms. Pursuant to H.R. 3269, financial services firms would 
     be required to submit practices and plans for incentive 
     compensation for employees to their appropriate regulator. 
     The regulator would then have the authority to approve or 
     disapprove such plan, as well as take action for violations. 
     In many firms, because incentive compensation plans range 
     from the CEO to the receptionist, these provisions would 
     place the federal government in the position of regulating 
     compensation for all, or a vast majority of, employees in a 
     company. This would be particularly intrusive when coupled 
     with the provisions of H.R. 3126 which would allow the 
     proposed Consumer Financial Protection Agency to regulate the 
     compensation of employees who interact with consumers, 
     regardless of industry, such as real estate agents, or even 
     cashiers who accept credit cards. Taken together, these two 
     proposed bills constitute an unprecedented governmental 
     intrusion into matters that have historically been addressed 
     by private actors.
       2. The ``Say on Pay'' provisions can be improved by making 
     the votes triennial and providing for a 5-year opt-out if 
     approved by a super-majority of shareholders. The Chamber 
     believes that the ``Say on Pay'' provisions of H.R. 3269 can 
     be improved. Currently, the bill requires an annual advisory 
     vote at every company in the United States, regardless of 
     size, industry, history, and governance. Rather, Congress 
     should require such an advisory vote every three years, 
     thereby tracking the typical life-span of an average 
     executive compensation package. This change would give 
     shareholders a more informed voice in the executive 
     compensation policies of a company. The Chamber also believes 
     that adding an opt-out provision is warranted. For example, 
     if two-thirds of shareholders vote for a 5-year opt-out of 
     ``Say on Pay'' votes, small and mid-size companies would be 
     able to mitigate the undue costs and distractions associated 
     with an annual vote.
       3. Federal Law should not create a pre-emption if state 
     corporate law contains mechanisms for independent 
     compensation committees. State corporate law has fostered a 
     diverse set of corporate governance structures that have 
     allowed the American economy to be the richest and most 
     productive in world history. While the governance structures 
     of some financial services firms have been questioned, 97 
     percent of the more than 15,000 public companies in the 
     United States have had nothing to do with the financial 
     crisis. Accordingly, the Chamber believes that the 
     legislation should not preempt state law.
       The Chamber believes these recommendations would represent 
     significant improvements to the bill and assist in providing 
     strong corporate governance policies needed for a growing 
     economy.
       The Chamber also supports the Garrett substitute amendment 
     to the bill, which would allow for improved Say on Pay and 
     Independent Compensation Committee provisions, while 
     stripping Section 4 of the bill. Finally, the Chamber 
     supports the Garrett amendment to strike Section 4 of the 
     bill, removing those provisions that would regulate incentive 
     compensation practices.
       The Chamber strongly supports corporate governance reforms 
     in line with our Statement of Principles, but urges you to 
     oppose H.R. 3269 because it is inconsistent with these 
     Principles on corporate governance.
           Sincerely,
                                                  R. Bruce Josten.
                                 ______
                                 
                                           National Association of


                                        Federal Credit Unions,

                                     Arlington, VA, July 28, 2009.
     Re Comments on H.R. 3269 as pending in mark-up.

     Hon. Barney Frank,
     Chairman, Committee on Financial Services, House of 
         Representatives, Washington, DC.
     Hon. Spencer Bachus,
     Ranking Member, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Chairman Frank and Ranking Member Bachus. Mr. 
     Chairman, I am writing on behalf of the National Association 
     of Federal Credit Unions (NAFCU), the only trade association 
     that exclusively represents the interests of our nation's 
     federal credit unions, in conjunction with H.R. 3269, the 
     Corporate and Financial Institution Compensation Fairness Act 
     of 2009 as amended so far in mark-up.
       NAFCU continues to oppose the bill, as amended, in its 
     current form. While the adoption of the Hensarling amendment, 
     exempting institutions under $1 billion in assets from the 
     scope of Section 4 of the legislation was a step in the right 
     direction, we continue to urge the Committee to amend this 
     legislation so that it does not apply to credit unions.
       As not-for-profit, member-owned cooperatives, credit unions 
     were not the cause of the current financial crisis. The 
     success of the credit union industry in this regard can be 
     attributed not only to its structure and nature, but to the 
     fact that credit unions, unlike for-profit entities, are 
     singularly focused on service to their members and do not 
     chase stock returns. In fact, credit unions do not issue 
     stock at all. Furthermore, they are governed by a volunteer 
     board of credit union member directors that serve generally 
     without remuneration and ultimately decide the compensation 
     for key employees of the credit union. It is therefore 
     critical that non-profits be treated differently than for-
     profit entities.
       Quite frankly, those running for-profit entities, including 
     community banks, have a profit motive that can open the door 
     for abuse. In stark contrast, not-for-profit cooperatives 
     quite simply have different motives, which substantially 
     lessen the incentive for abuse.
       NAFCU continues to believe that the inclusion of credit 
     unions as covered institutions under Section 4 of the 
     legislation and provisions requiring NCUA to prescribe joint 
     regulations in conjunction with other regulators who 
     supervise for-profit, stock-issuing entities, does not make 
     sense. Simply stated, credit unions are not guided by the 
     profit motive or stock price manipulation to which this 
     legislation is aimed.
       It is with that in mind that we continue to oppose the 
     legislation in its current form and urge the Committee to 
     amend Section 4 of H.R. 3269 to exempt credit unions from 
     this legislation. Without a current amendment pending before 
     the Committee to do this, we would support adoption of either 
     the Neugebauer or Castle amendments to strike Section 4 of 
     the bill. Conversely, if Section 4 is maintained by the 
     Committee, we would urge further amending H.R. 3269 to exempt 
     credit unions from Section 4 prior to consideration on the 
     House floor. If one of these changes were to be made, NAFCU 
     could support the legislation going forward.
       NAFCU appreciates the opportunity to share our thoughts on 
     this important topic and we look forward to working with you 
     and your staff to address our concerns.
       Should you have any questions or require any additional 
     information please do not hesitate to contact me or Brad 
     Thaler,

[[Page E2222]]

     NAFCU's Director of Legislative Affairs.
           Sincerely,
                                              Fred R. Becker, Jr.,
     President/CEO.
                                  ____



                                                         CUNA,

                                    Washington, DC, July 24, 2009.
     Hon. Barney Frank,
     Chairman, Committee on Financial Services, House of 
         Representatives, Washington, DC.
     Hon. Spencer Bachus,
     Ranking Member, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Chairman Frank and Ranking Member Bachus: On behalf of 
     the Credit Union National Association (CUNA), I am writing 
     regarding H.R. 3269, the Corporate and Financial Institution 
     Compensation Fairness Act of 2009. CUNA represents nearly 90 
     percent of America's 8,000 credit unions and their 92 million 
     members.
       We understand the concern some have regarding the effect 
     compensation structures that encourage excessive risk-taking 
     have on the safety of financial institutions and the economy. 
     We applaud efforts to address these egregious practices. 
     However, as the Committee prepares to consider H.R. 3269 next 
     week, we encourage you to exclude credit unions from the 
     scope of the bill. The credit union structure combined with 
     strong compensation regulations already in place have 
     resulted in credit unions being largely immune from both 
     excessive and unsafe risk-taking and from the criticism 
     assigned to for-profit financial services providers; thus, 
     the inclusion of credit unions under H.R. 3269 is 
     unwarranted.
       As you know, credit unions are unique, member-owned, not-
     for-profit, financial cooperatives, and they simply do not 
     have the same operational motives as for-profit depository 
     institutions. As a result, credit unions are risk-averse 
     institutions operating in the best interest of their members. 
     Further, the compensation structure of credit unions is not 
     only less aggressive than the for-profit financial 
     institutions, it is also more modest. According to our most 
     recent survey of our members, the median salary for a credit 
     union CEO is approximately $71,000; the average salary is 
     approximately $93,000.
       The National Credit Union Administration Board (NCUA) 
     already has compensation regulations in place that are 
     designed to prevent the types of dangerous compensation 
     structures that exist in other sectors. These include Section 
     701.21(c) of NCUA's Rules and Regulations, restricting 
     compensation related to loans to members and lines of credit 
     to members; Section 701.33, restricting compensation to 
     credit union board members; and Section 712.8, restricting 
     compensation to credit union employees or board members from 
     credit union service organizations in which the credit union 
     has an outstanding loan or investment.
       We believe that H.R. 3269, if applied to credit unions, 
     would at best be duplicative of current regulations and at 
     worse could increase the cost and regulatory burden on a 
     sector of the financial services industry that neither caused 
     the economic crisis nor engaged in the type of compensation 
     arrangements that this legislation seeks to address. 
     Therefore, we cannot support this legislation in its current 
     form and we would welcome the opportunity to work with you 
     and others on the Financial Services Committee to amend the 
     legislation to exclude credit unions.
       On behalf of America's credit unions and their 92 million 
     members, thank you very much for your consideration.
           Sincerely,
                                                   Daniel A. Mica,
     President & CEO.
                                  ____

                                                     The Financial


                                          Services Roundtable,

                                    Washington, DC, July 23, 2009.
     Hon. Barney Frank,
     Chairman, Committee on Financial Services, House of 
         Representatives, Washington, DC.
     Hon. Spencer Bachus,
     Ranking Member, Committee on Financial Services, House of 
         Representatives, Washington, DC.
       Dear Chairman Frank and Ranking Member Bachus: The House 
     Financial Services Committee is scheduled to mark up H.R. 
     3269, the Corporate and Financial Institution Compensation 
     Fairness Act of 2009, on Tuesday morning. The Financial 
     Services Roundtable supports the spirit of this legislation, 
     and the mutual goals of promoting corporate accountability 
     and good governance practices; however, we must oppose H.R. 
     3269. Compensation programs are an important tool in the 
     financial services industry used to recruit and retain 
     skilled employees. These programs should be aligned with the 
     overall safety and soundness of the organization as well as 
     shareholder interest. The Roundtable supports and promotes 
     such goals as outlined in our Principles on Executive 
     Compensation (see attached).
       We have serious concerns about H.R. 3269 as drafted, 
     including the requirement for Federal regulators to determine 
     the types of compensation structures that are appropriate for 
     financial institutions. Decisions regarding incentive 
     compensation programs should be designed uniquely by 
     corporations and their compensation committees to account for 
     respective shareholder interest; long term sustainable, firm-
     wide success; and the time horizon of risks. Federal 
     regulators currently require disclosure on the details and 
     types of executive compensation arrangements, and specific to 
     financial institutions, require that such arrangements be 
     consistent with safety and soundness guidelines. The 
     Roundtable believes the existing authority currently being 
     exercised by Federal regulators is appropriate and in line 
     with protecting consumer and shareholder interests alike.
       We appreciate your review and consideration of these 
     concerns as the committee prepares to consider H.R. 3269. 
     Please feel free to call on me if I can be of assistance or 
     answer any questions.
           Best Regards,
                                                   Steve Bartlett,
     President and CEO.
                                  ____

                                               Center on Executive


                                                 Compensation,

                                    Washington, DC, July 27, 2009.
     Re H.R. 3269, Corporate and Financial Institutional 
         Compensation Fairness Act of 2009.

     Hon. Barney Frank,
     Chairman, House Financial Services Committee, Rayburn House 
         Office Building, Washington, DC.
     Hon. Spencer Bachus,
     Ranking Member, House Financial Services Committee, Rayburn 
         House Office Building, Washington, DC.
       Dear Chairman Frank and Ranking Member Bachus: On behalf of 
     the Center on Executive Compensation, I am writing to express 
     the Center's opposition to H.R. 3269 because of the far-
     ranging effects it will have on the U.S. system of corporate 
     governance and effective compensation policies. We are 
     particularly concerned about the provisions of the bill that 
     impose an annual mandatory vote on pay and direct the Federal 
     government to prohibit compensation arrangements in the 
     financial services industry.
       As you know, the Center is a research and advocacy 
     organization that seeks to provide a reasoned perspective on 
     executive compensation policy and practice issues from the 
     viewpoint of the senior human resource officers of large 
     companies. The Center's public policy positions are developed 
     with the help of its Subscribers to ensure a practical view 
     that is also informed by its principles. The Center believes 
     that a Board-centric approach to developing and disclosing a 
     clear link between pay and performance and for mitigating 
     excessive risk in executive compensation plans is far 
     preferable to having pay set by the Federal government.
       Mandated Annual Vote On Pay Will Weaken Corporate 
     Governance. The Center opposes mandated annual shareholder 
     vote on executive compensation in Section 2 of the bill 
     because it would encourage the adoption of ``cookie cutter'' 
     pay arrangements rather than arrangements carefully tailored 
     to the company and is not sought by a majority of 
     shareholders. Specifically, a mandatory vote on pay:
       Would Move the U.S. Toward a System of Governance by 
     Referendum. Boards of Directors, acting through an 
     independent compensation committee, discharge their fiduciary 
     duty to manage executive compensation on behalf of all 
     shareholders by tying the amount and form of compensation to 
     confidential business strategy, evaluating individual 
     executive performance and using pay levers to manage the 
     company's succession planning process. A mandatory vote on 
     pay seeks to substitute the judgment of the shareholders for 
     the informed judgment of the Board and is likely to open the 
     door to more shareholder votes on other issues, such as where 
     to expand or research and development decisions.
       Would Result in a Cookie-Cutter Approach to Pay. In order 
     to have an informed view on pay, institutional investors and 
     others faced with an annual nonbinding vote on pay would be 
     required to analyze 30-50 pages of disclosure for thousands 
     of companies. Many will rely instead on the recommendation of 
     proxy advisory services, which have their own views of how 
     pay should be structured. In order to ensure substantial 
     support, compensation committees will adopt pay arrangements 
     designed to get a high vote rather than be tailored to the 
     company.
       Fails to Recognize That a Majority of Shareholders Have Not 
     Supported Shareholder Resolutions in 2009. Despite the 
     current economic environment, shareholder resolutions asking 
     companies to adopt an annual vote on pay have not received 
     majority support on average, with only 30 percent of the 
     votes receiving majority support.
       Ignores Research Results That Show the Largest 
     Institutional Investors Do Not Favor Say on Pay. A 2008 
     research study by Cornell University Professor Kevin Hallock 
     of large institutional investors showed that 50 percent 
     opposed say on pay while just 25 percent supported it. 
     Responses such as the following were typical ``It is not 
     clear A, what we are voting on and B, what others are voting 
     on. We can have a much more individual discussion and nuanced 
     discussion'' [with the Board].
       Has Not Reduced Pay Levels in the UK An annual mandatory 
     vote requirement in the United Kingdom has not reduced the 
     overall level of compensation (the FTSE 100 experienced a 7% 
     pay increase in 2008, while in the U.S., the S&P 500 
     experienced a 6.8 percent decline) and has resulted in less 
     of a link between pay and performance.

[[Page E2223]]

       Government Control Over Compensation Sets A Dangerous 
     Precedent. The Center also opposes Section 4 of the 
     legislation and believes it should be removed in favor of a 
     principles-based approach to mitigating excessive risk in 
     incentives. Section 4 would give the Federal banking 
     regulatory agencies the extraordinary authority to prohibit 
     pay structures and arrangements for executives and 
     individuals as well as pass judgment on specific compensation 
     arrangements. Because the impact of different pay structures 
     will have different effects based on the risk profile of the 
     organization, the time horizon of the products or services 
     sold and other considerations, banning all pay structures 
     across the entire industry is likely to have significant 
     unintended consequences and sets a dangerous precedent for 
     federal regulation of compensation in other contexts.
       We are also concerned that the proposed disclosure will 
     result in a one-size-fits-all approach to compensation. There 
     are six regulators responsible for developing and 
     implementing the prohibitions and acceptable practices 
     required in the bill. So far, they have not been able to 
     agree on their respective responsibilities under the 
     forthcoming regulatory restructuring. With this in mind, it 
     is likely that in order to come to agreement on the pay 
     practices that should be banned, the regulators will need to 
     adopt a standardized approach to acceptable executive 
     compensation arrangements and therefore mute the ability of 
     companies to set forth a reasoned and reasonable approach to 
     pay for performance.
       The Center fully supports the mitigation of risk in 
     incentives, as articulated in the attached checklist for 
     compensation committees. The Center believes that mitigating 
     risk is a matter of balance on a number of fronts, including 
     balance among the type of metrics measuring performance, 
     balance between short- and long-term compensation and balance 
     in ensuring incentives focus on the time horizon of risk. 
     These are decisions best made by the Board Compensation 
     Committee and disclosed in the annual proxy statement. As you 
     know, the SEC is in the process of enhancing its disclosures 
     of excessive risk in incentives for employees and executives 
     that covers all employers.
       Finally, it is worth noting that previous well-intended 
     Congressional attempts to regulate amounts or structures of 
     compensation have typically backfired--increasing 
     compensation or changing practices in unforeseen ways 
     contrary to the intent of the restrictions. A good example is 
     the executive compensation restrictions included in the 
     American Recovery and Reinvestment Act, which encourage 
     greater salaries, rather than a careful pay for performance 
     orientation. Because H.R. 3269 has been available for only 
     one week, we believe that more time is warranted to give the 
     Committee and interested parties an opportunity to fully 
     analyze and discuss the potential for harmful unintended 
     consequences.
       Thank you for your consideration of our views. We look 
     forward to working with you on this and other legislation.
           Sincerely yours,
                                                 Timothy J. Bartl,
     Senior Vice President and General Counsel.

                          ____________________