| FOR IMMEDIATE RELEASE |
CONTACT: NAT SILLIN |
| May 3, 2011 |
(202) 821-8380 |
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Hayworth Opening Statement on Committee Markup of H.R. 1062
(WASHINGTON) – Rep. Nan Hayworth, M.D. (R-NY) made the following opening statement at today’s House Financial Services Committee markup of her bill, H.R. 1062, the Burdensome Data Collection Relief Act. Remarks as prepared for delivery: “I share this goal with our President. On January 18, 2011, the President signed an Executive Order directing agencies to identify burdensome regulations whose costs outweigh their benefits. The President explained – and I quote – “rules have gotten out of balance, place unreasonable burdens on business – burdens that have stifled innovation and have had a chilling effect on growth and jobs.” “Section 953(b) of the Dodd-Frank Act does not balance benefits with costs. Shareholders, proxy vote advisors, institutional investors and others have repeatedly determined that the information is not beneficial. And even minimal compliance costs far outweigh any benefits and is money better spent on growing the economy and creating jobs.” “Let me make clear, the repeal of Section 953(b) is not about the disclosure of executive compensation. Numerous other state and federal laws require the disclosure information regarding executive compensation, including state laws governing shareholder’s rights to information, federal tax law requiring disclosure of executive compensation to deduct CEO compensation, New York Stock Exchange and NASDAQ listing requirements, and SEC regulations. These provisions require the disclosure of base salaries, bonuses, deferred compensation, incentive-based compensation, stocks and stock options, post-employment payments and benefits, etcetera.” “Shareholders in proxy votes, experts in corporate best practices, and institutional advisers all conclude that the information provided by section 953(b) has no benefit to investors. This is especially true for the 5,500 smaller public companies in all of our Districts who should be concentrating on raising capital and creating jobs.” “In 2010 alone, shareholders at nine larger public companies also concluded that information regarding pay disparity was not important. This includes shareholders at General Electric (10%), JP Morgan Chase (6%), Coventry Health Care (5%), Allstate (8%), Goldman Sachs (6%), State Street Bank (6%) and Morgan Stanley (5%).” “And groups like Council of Institutional Investors and ISS, who advise institutional voters on exec comp disclosure, the Conference Board, who advises on best practices, and institutional investors like TIAA-CREF have all examined disclosure and decided not to identify as important to investors the information required by section 953(b).” “While there is not real benefit to investors from this section, there are substantial compliance burdens to these companies. The 5,500 small public companies may not have personnel, or even internal payroll systems, to easily comply. Larger companies have many different subsidiaries and affiliates, sometimes all around the world, with different payroll systems and different pensions systems. Part-time employees, new employees, employees who leave, independent contractors who may qualify as employees, all pose additional burdens. Foreign workers have national health care and compensation directed at pensions but domestic employees have compensation is directed toward health care and 401(k)s. Foreign laws prohibit the transfer of personal information like individual compensation.” “Congress, in Washington, D.C., cannot determine what information is important for investors in every company, of every size, in every location and in every industry. So we created a law requiring the disclosure of information “material” to the investors in that specific company. Material information is that which would impact an investor’s decision to invest (or divest) from the company or to vote for directors. This is the only law that can work for all 6,000 public companies in the United States. Not only does 953(b) violate this concept, it hurts shareholders and corporate governance by needlessly lengthening disclosures, diluting material information, and misleading or confusing investors who seek to compare ratios between companies due to differences in size, geographic location, industry or mix of jobs.” “Section 953(b) of the Dodd-Frank Act is a burdensome regulation that provides no benefit and has substantial costs. Money spent complying with this provision is much better spend growing the economy and creating jobs. For all these reason, I ask you to support this bill.” *************************************** Subcommittee Approves Hayworth’s Burdensome Data Collection Relief Act
(WASHINGTON) – Today the House Financial Services Subcommittee on Capital Markets passed H.R. 1062, the Burdensome Data Collection Relief Act sponsored by Rep. Nan Hayworth, M.D. (R-NY) with bipartisan support. The bill repeals Section 953(b) of the Dodd–Frank Wall Street Reform and Consumer Protection Act, which requires all publicly traded companies to collect and disclose certain information regarding employee compensation. This information does not add material value to disclosures already required by Securities and Exchange Commission law. Therefore, repeal of the Section 953(b) disclosure requirement will enable businesses to direct resources toward investment and job creation. “The passage of this bill is an important step in our effort to change laws that unnecessarily burden our economy and divert attention away from job growth. Section 953(b) of Dodd-Frank provides no benefit and has substantial costs. Resources that would be spent complying with this unnecessary provision need to go instead toward growing the economy and creating jobs,” stated Hayworth. Hayworth introduced the bill in March as part of a package of measures aimed at encouraging job creation and investment. Existing law already requires public companies to disclose extensive information regarding executive compensation. Placing additional paperwork burdens on our public companies to generate information that is immaterial to investors and shareholders will squander resources that could be used for job creation. Subcommittee Chairman Scott Garrett (R-NJ) commented, “Since arriving on Capitol Hill, Nan has been a valuable member not just of the Capital Markets Subcommittee, but of the Financial Services Committee as a whole. Her strong efforts to reduce unnecessary regulatory burdens, create jobs and encourage capital investment are greatly appreciated.” In her opening statement at the committee markup Hayworth noted widespread opposition from both shareholders and job creators to the new requirements. She stated, “shareholders in proxy votes, experts in corporate best practices, and institutional advisors have examined executive compensation and disclosure and have not identified this information as important to investors. This is especially true for the 5,500 smaller public companies in all of our Districts who should be concentrating on raising capital and creating jobs.” The bill will now be ordered favorably reported to the full committee. The Burdensome Data Collection Relief Act has already garnered support from the following organizations:
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