Notice of Petition - "Compensation, Retirement Programs and Related Benefits" John Manske 4930 Hwy N Sun Prairie, WI 53590
April 22, 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 requesting comment on the regulatory petition filed by The Farm Credit Council regarding the Agency's say on pay mandatory shareholder vote on compensation matters.
As an appointed director of a Farm Credit System institution for over ten years, I support the request contained in the Council's petition that the agency withdraw the say on pay vote requirement. Asking shareholders to vote on matters that are the purview of the board of directors is inconsistent with the Farm Credit Act, with cooperative principles, undermines the role and responsibility of directors to represent the interests of shareholders and increases litigation exposure for directors and institutions. Shareholder engagement on compensation matters already exists through the disclosure requirements that are in place and the ability of shareholders to express their views on these matters to management and boards at any time. My experience on the Badgerland Financial board has convinced me that we have the financial success of the association and our member-owners as the key desired outcomes when our decisions are made and actions taken. I see the say on pay requirement as potentially having a chilling effect on the liklihood that boards of directors will make some of the compensation decisions that are often linked to strengthened business outcomes.
Please modify the final rule on compensation and benefit program disclosure to remove the requirement for say on pay voting. As an alternative to the mandatory advisory vote by boards of directors on executive pay, there could be expanded descriptive language included in association annual reports or a process where shareholders could petition a board for discussion with their board on any topic.