|Subject:||Disclosures Under FCA Regulations 620.5 and 630.20|
|Date of Memorandum:||02/24/2006|
|Expiration Date:|| |
|Office:||Office of Regulatory Policy|
|Signed By:||Smith, Roland|
|FCA Contact Person:||Wynn, Wade|
|List of Attachments:|
INFORMATIONAL MEMORANDUM Farm Credit Administration
1501 Farm Credit Drive
McLean, Virginia 22102-5090
February 24, 2006
To: Chairman, Board of Directors
Chief Executive Officer
All Farm Credit Banks and Associations
Federal Farm Credit Banks Funding Corporation
From: Roland E. Smith
Secretary to the Board
Subject: Disclosures Under FCA Regulations §§ 620.5 and 630.20
The Farm Credit Administration (FCA) recently amended FCA regulations §§ 620.5 and 630.20 governing disclosure requirements of annual reports to shareholders and investors.1 Notwithstanding the pending effective date of the governance rule, Farm Credit System banks and associations and the Federal Farm Credit Banks Funding Corporation may prepare their 2005 annual reports in accordance with FCA regulations §§ 620.5 (annual report to shareholders) and 630.20 (annual report to investors) in effect as of the date of this informational memorandum.
FCA regulation § 620.5(i)(2)(i)(A) currently establishes a threshold for determining when the compensation of a bank or association Chief Executive Officer (CEO) must be disclosed in the annual report. The threshold is adjusted annually to reflect the change in the Consumer Price Index (CPI). FCA calculates the threshold for each year by determining the increase since 1994, the year the regulatory limit became effective. Using this approach, the 2005 threshold is determined by the increase in the average CPI since 1994:
2005 threshold = $150,000 x (2005 annual average CPI/ 1994 annual average CPI)
2005 annual average CPI2 = 195.3
1994 annual average CPI = 148.2
2005 threshold = $150,000 x (195.3/148.2)
The threshold for disclosure of fiscal year 2005 CEO compensation in annual reports under current FCA regulation § 620.5 is $197,672.3
If you have any questions regarding the 2005 annual disclosures and compensation adjustment process, please call Wade Wynn, Office of Regulatory Policy, (703) 883-4262, TTY (703) 883-4434, or by e-mail to email@example.com.
Copy to: Each FCS institution
1The governance rule was published in the Federal Register on February 2, 2006, and becomes effective 30 days after publication during which either or both Houses of Congress are in session (71 Fed. Reg. 5740).
2Based on the annual average Consumer Price Index for all Urban Consumers (CPI-U), U.S. City Average, All Items, 1982-84 = 100. Unadjusted series CUUR0000SA0, U.S. Bureau of Labor Statistics.
3Regulatory CEO compensation disclosure threshold of $150,000 x 1.317814, rounded to the nearest whole dollar.