|Subject:||Annual Adjustment of the 1999 Annual Report Disclosure Threshold for 1998 CEO Compensation|
|Date of Memorandum:||01/29/1999|
|Expiration Date:|| |
|Signed By:||McKenzie, Thomas|
|FCA Contact Person:||Dunn, William|
|List of Attachments:|
January 29, 1999
To: Chairman, Board of Directors
Chief Executive Officer
All Farm Credit Banks and Associations
From: Thomas G. McKenzie, Director
Office of Policy and Analysis
Subject: Annual Adjustment of the 1999 Annual Report Disclosure Threshold for 1998 CEO Compensation
Farm Credit Administration regulation at § 620.5(i)(2)(i)(A) establishes the threshold for determining when CEO compensation must be disclosed in the annual report. The threshold is adjusted annually to reflect changes in the Consumer Price Index (CPI). The adjustment used is the annual percentage change in the CPI.
Annual percentage change= (most recent full-year CPI - prior year CPI) * 100
prior year CPI
The percentage change in the CPI for 1998 compared with 1997 was:
1. Most recent full-year CPI = annual average 1998 index of consumer prices Based on the Consumer Price Index for all Urban Consumers (CPI-U) for the U.S. City Average for All Items, 1982-84 = 100. Unadjusted series CUUR0000SA0, U.S. Bureau of Labor Statistics. = 163.0
2. Prior year CPI = annual average 1997 index of consumer prices = 160.5
3. Annual percentage change = ((163.0-160.5)/160.5)*100 = 1.5576 percent
The threshold for disclosure of fiscal year 1998 CEO compensation in annual reports released in 1999 is $164,980. 1997 CEO compensation threshold of $162,450 * 1.5576 percent, rounded = $2,530 increase.
If you have any questions regarding the annual adjustment process, please call William Dunn, Risk Analysis Division, (703) 883-4489.