Notice of Petition - "Compensation, Retirement Programs and Related Benefits" Steve Zeman 120 Mill Street South West Salem, WI 54669-1611
April 19, 2013
Barry F Mardock Deputy Director Office of Regulatory Policy, Farm Credit Administration 1501 Farm Credit Drive McLean, VA 22102-5090
Dear Mr. Mardock:
I'm writing in opposition to the Farm Credit System (FCS) petition against giving a voice to their member owners (say on pay) and in support of the Farm Credit Administration's (FCA) final rule adopted last October.
The FCS is a government sponsored enterprise or GSE and must have a high standard of accountability and transparency in all of their dealings. The FCS is also structured as a cooperative and their members need to be allowed to have a vote on the large pay packages of FCS CEOs, executives, and senior officers. That is how a cooperative works!
The vote allowed if there is five percent or more of members petitioning for a vote on compensation and related issues is nonbinding in nature. Therefore it is advisory in nature for their boards. Allowing members such a vote does not cause a hardship on FCS institutions. For the same reasons, members should be allowed to vote on large pay increases of fifteen percent or more. These issues go to the heart of what cooperative governance and what the one-member, one-vote principals are all about.
I disagree with the FCS contention that FCA needs Congress to pass a law in order to allow this fundamental right to cooperative members. Where has FCS been when the FCA has granted FCS lenders numerous power grabs in recent years that were not authorized by Congress? They have been given more and more powers and authorizations over the years to the point that they no longer work toward the best interest of the small and medium sized farming entity. They only want to do business with large farming enterprises and with their funding mechanism they can offer lower rates to all of their borrowers than tax paying banking institutions can.
The final rule should even be more stringent by requiring the vote to be binding upon the FCS institution if a final vote against such pay increases is agreed to by 60 percent of the voting members and that a vote by 50% of voting members be enough to be binding upon FCS CEOs.
If the FCA backs down on this final regulation due to pressure from the FCS, then the FCA's credibility as a regulator is completely gone and its supposed interest in transparency will be nothing more than empty rhetoric. Rejecting the FCS petition is also necessary to ensure better safety and soundness practices are in place for the FCS. Therefore, I request that the FCA keep the final rule in place and strengthen it as suggested above. Thank you for considering my comments.