[Congressional Record (Bound Edition), Volume 150 (2004), Part 17]
[Extensions of Remarks]
[Page 23471]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    EXCESSIVE EXECUTIVE COMPENSATION

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                           HON. TERRY EVERETT

                               of alabama

                    in the house of representatives

                        Friday, October 8, 2004

  Mr. EVERETT. Mr. Speaker, on the two-year anniversary 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 often 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 is also 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 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 or increase in special 
retirement plans for executives. This could 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 advance disclosure of excessive corporate compensation 
will move us in that direction.

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