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For Immediate Release: May 1, 2006

Contact:	Steve Adamske, 202-225-7141

FRANK REQUESTS PANEL TO FOCUS ON EXECUTIVE COMPENSATION

Financial Services Ranking Democratic Member Believes Upcoming Hearing on SEC Should Highlight Executive Compensation Issue

Washington, DC- Congressman Barney Frank, the Ranking Democratic Member of the House Financial Services Committee today released a letter to Financial Services Committee Chairman Mike Oxley asking for a second panel to be dedicated to the issue of executive compensation for Wednesday's hearing with Securities and Exchange Commission (SEC) Chairman Christopher Cox.  The SEC is currently proposing changes to rules governing the disclosure and reporting of executive compensation of public companies.  The issue has been highlighted of late by high profile "golden parachute" compensation packages to retiring CEOs and companies who have had to restate earnings but did not change executive pay structures.

Last year, Congressman Frank introduced the H.R. 4291 "The Protection Against Executive Compensation Abuse Act" to address the problem of runaway executive compensation by requiring greater disclosure of executive compensation to shareholders.  Frank's initiative would not set any artificial limits on individual executive compensation.  Rather, the legislation would give shareholders more information about management pay packages and empower shareholders to take action against management abuse and self-dealing. 

The text of Congressman Frank's April 28, 2006 letter follows:

Dear Chairman Oxley

On behalf of the minority, I am writing to request additional witnesses in a second panel for the May 3rd Financial Services Committee hearing entitled "Protecting Investors and Fostering Efficient Markets: A Review of the S.E.C. Agenda," at which Securities and Exchange Commission Chairman, Christopher Cox, will testify.  Witnesses in a second panel should address the question of compensation for high-ranking public company employees.  This is a matter, as you know, in which the S.E.C. is now heavily engaged on by means of a proposed rule, and which you and I have discussed needs to be the subject of a Committee hearing.

The S.E.C.'s proposal is a good first step on this issue, but does not go far enough in part because the agency may lack clear authority to do more.  I appreciate that the Financial Services Committee will be holding its hearing with Chairman Cox, but there are a number of important issues for him to discuss and executive compensation is of sufficient import to necessitate a separate panel with additional witnesses. 

BARNEY FRANK

 

Click here for PDF version of the letter.

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The Committee oversees all components of the nation's housing and financial services sectors including banking, insurance, real estate, public and assisted housing, and securities. The Committee continually reviews the laws and programs relating to the U.S. Department of Housing and Urban Development, the Federal Reserve Bank, the Federal Deposit Insurance Corporation, Fannie Mae and Freddie Mac, and international development and finance agencies such as the World Bank and the International Monetary Fund. The Committee also ensures enforcement of housing and consumer protection laws such as the U.S. Housing Act, the Truth In Lending Act, the Housing and Community Development Act, the Fair Credit Reporting Act, the Real Estate Settlement Procedures Act, the Community Reinvestment Act, and financial privacy laws.