Notice of Petition - "Compensation, Retirement Programs and Related Benefits" Jerry Layman 12301 Twp. Rd. 135 Kenton, OH 43326-9400
April 21, 2013
Barry F Mardock Deputy Director, Office of Regulatory Policy, Farm Credit Administration 1501 Farm Credit Drive McLean, VA 22102-5090
Dear Barry Mardock:
Thank you for this opportunity to comment on the recent regulatory petition filed by The Farm Credit Council in behalf of our Associations regarding the Agency's proposed implementation of the "say on pay" mandatory shareholder vote on compensation matters.
As chairman of the Board of Directors, member of Governance Committee and Chairman of our Board Compensation Committee of the AGCREDIT ACA in northwest Ohio, I would like to let you know that our Board supports the request contained in the Council's petition that the agency withdraw the say on pay vote requirement and we are more than a little frustrated with the FCA position of attempting to "shove this requirement down our throats". Asking our 5100 member-borrowers to vote on matters that are the expected responsibilities of the elected board of directors is inconsistent with the Farm Credit Act, with true cooperative principles, undermines the role of duly elected directors to represent the interests of our member-borrowers and increases the possibility of litigation exposure for our directors and institutions.
Our Compensation Committee and our Board members take very seriously our responsibility to oversee the operation of our Association and understand our fiscal responsibility to be sure that we have done our due diligence in each of the many decisions that we make in behalf of each of our members including but not limited to our executive pay schedule.
We have gone to the point that we have contracted with an outside organization to provide us with an anonymous internet survey of the entire board for the purpose of evaluating our CEO annually. We have reviewed comparable salaries of other system CEO's of Associations of our size and have rewarded our CEO for his work and leadership as we have determined to be both fair and adequate. Our entire membership would not have access to all the information that we have and review prior to making salary adjustment decisions annually and would lack any good method to justify their uninformed decision.
Our membership already has the opportunity to review the executive pay with the past several years of data printed in our annual reports as required by your agency. Members know that they are free to call or discuss any of the information found in that report with their elected representative to the Board or to the entire Board if desired. This would be an unnecessary expense for our Associations and result in very mixed results I am afraid.
I understand that the funding for the Farm Credit Administration comes from the assessments of each of the Associations according to our volumes. Maybe it is time that we as Directors of Associations ask for review of the FCA expenses and vote on all salary adjustments of the top management positions. To me this would be just as counterproductive as the proposed "say on pay". We would not be in a position to make a sound, common sense decision.
We are not a privately held bank with major stockholders expecting dividends on their stock. Instead we are a farmer-owned cooperative whose members have received a 25% patronage return on their involvement in our Association over the past several years. Everything we do, we do with the good of our members in mind.
We ask that you please modify the final rule on compensation and benefit program disclosure to remove the very unnecessary requirement for say on pay voting.