Peter Roskam

Mr. ROSKAM

Mr. ROSKAM. Mr. Chairman, I yield 1 minute to the gentleman from Delaware (Mr. Castle).

Mr. ROSKAM. Mr. Chairman, I move to strike the last word. I rise to point out that there is some dizzying logic going on. Basically, we are being told, here is a piece of legislation, and if you are clever enough to come up with a germane amendment, we will sort of humor you and listen to you. But if there is a larger suggestion, then it is very difficult to move forward. I would just suggest to the chairman of the committee that the perfect is the enemy of the good. It strikes me that the gentleman from Massachusetts is an incrementalist. Those who survive most in this arena are incrementalists, and he has survived for a long, long time, Mr. Chairman, and flourished and been very successful as a legislator. But it just seems that this is a good faith effort on the part of the gentleman from North Carolina to put forward something substantively. Is it the totality of making every problem go away? No. There is no way to do that. And it is a little bit of a procedural Catch-22 that he is in.

Mr. ROSKAM. Mr. Chairman, I move to strike the last word, and I yield to the gentleman from New Jersey (Mr. Garrett).

Mr. ROSKAM. Mr. Chairman, I have offered this amendment to clarify some possibly misleading language in H.R. 1257, and it simply strikes ``or other meeting of the shareholders'' and inserts ``meeting of the shareholders or a special meeting in lieu of the annual meeting,'' at page 4, line 14 and page 5, line 7. The bill would allow, as we have discussed, a separate, nonbinding shareholder vote to approve the compensation of executives for any proxy, consent or authorization for an annual meeting. As currently drafted, the language in the bill asserts that this would be an annual meeting or other meeting of the shareholders. This language could potentially lead to allowing multiple nonbinding shareholder votes throughout the year instead of just at the annual or special meeting in lieu of the annual meeting, and, therefore, clarification of this language is needed. Hence, the reason for the amendment. My concern is that if the current language were to be placed into law, that multiple votes would be forced to be taken throughout the year which would distract the board and the executives from their primary responsibility, that is, ensuring that they put in place good business practices that benefit the shareholders' investment instead of being distracted multiple times by a whole host of votes. The greater concern would be that these potential multiple votes would ensure fiscal and business priorities are not in the forefront of the board members' minds, ultimately having the ill effect on global competitiveness of American business. I spoke to the chairman earlier, and I believe that it's a noncontroversial request to clarify language. I urge all of my colleagues to support the amendment.

Mr. ROSKAM. Mr. Chairman, I have an amendment at the desk.

Mr. ROSKAM. Mr. Chairman, I yield myself the balance of my time. I will insert into the Record three letters opposing this legislation by the U.S. Chamber of Commerce, HR Policy Association and American Bankers Association. The Association of Senior Human Resource Executives, Washington, DC, April 18, 2007. RE HR Policy Opposes H.R. 1257, Shareholder Vote on Executive Compensation Act. Hon. Spencer Bachus, House of Representatives, Rayburn House Office Building, Washington, DC. Dear Representative Bachus: On behalf of the HR Policy Association, I am writing to urge you to vote no on H.R. 1257, the Shareholder Vote on Executive Compensation Act, when the House considers it this week. We believe that the bill will have significant negative effects on corporate governance and will not appreciably increase shareholder input into the executive compensation process. HR Policy Association is a public policy advocacy organization representing the chief human resource officers of over 250 leading employers doing business in the United States. Representing nearly every major industry sector, HR Policy members have a combined U.S. market capitalization of more than $7.5 trillion and employ more than 18 million employees world wide. Our members are especially concerned that a shareholder vote would undermine the authority of the Board of Directors with respect to compensation and is unnecessary as a tool to increase communications with shareholders. At the outset, it is important to note that last year, the U.S. Securities and Exchange Commission completed an overhaul of its executive compensation disclosure regulations. The full effect of these changes on executive compensation practices will not be known until after the 2009 proxy season, the first year in which companies will have to present three years of data. At a minimum, the House should defer any action on the legislation until after the effect of the new rules can be fully evaluated. The Association believes that H.R. 1257 would seriously erode the authority of the Board of Directors to determine appropriate executive compensation levels. Under our system of corporate governance, the Board manages the company on behalf of the shareholders. In turn, the shareholders have the right to vote on strategic matters, such as mergers, and remove directors if they believe the corporation is not being managed in the shareholders' best interests. This delegation of authority is necessary because of the considerable amount of detailed and confidential information that Board members must consider when making decisions regarding corporate strategy and executive compensation. Providing a shareholder vote on compensation would be unprecedented because it would provide a referendum on the results of the Board's decision, rather than on a framework for making decisions, as occurs in the case of shareholder authorization for equity compensation or mergers. More importantly, a shareholder vote would potentially open up other Board decisions to a shareholder vote, such as the decision to pursue merger talks or settle certain lawsuits, thus substantially slowing the ability of the Board to make quick decisions and undermining competitiveness. Fundamentally, an advisory shareholder vote would not provide meaningful information to companies about the practices shareholders find objectionable. It is simply an up or down vote, with no explanation attached, leaving substantial questions about its meaning. Under current law, shareholders already may file advisory resolutions with any publicly held company seeking changes in specific executive compensation practices. There is no need for legislation adopting a mandatory framework that will have a negligible impact on most of the 15,000-plus publicly held companies. Counter to arguments made in support of the bill, new mechanisms of communications between companies and shareholders are not necessary. Most large companies already hold periodic meetings throughout the year with their largest shareholders on a variety of subjects, including compensation. In addition, the shareholder vote concept has been imported from the United Kingdom, but the U.K. regulatory and legal systems are substantially different from those in the U.S., and the results of a shareholder vote are likely to be fundamentally different. In the U.K. the two largest investors control roughly 30 percent of the market while in the U.S. ownership is more diffuse, making shareholder consensus much more difficult. The U.K. has voluntary corporate governance standards with less rigid standards for Board member independence, and Board members may avoid all liability with an advisory shareholder vote. In the U.S., Board members have fiduciary liability, and are subject to shareholder derivative actions, regardless of a shareholder advisory vote. The threat of litigation acts as a check on Board actions. The U.K. shareholder vote requirement also has had significant negative effects that would negatively impact the management of U.S. companies. These effects include encouraging executives to seek positions with private equity firms; making pay arrangements more standardized, rather than customized to the company; increasing diligence among compensation committees similar to that already occurring in the U.S.; and, increasing the power of the proxy advisory services and hedge funds as institutional investors outsource their compensation research, engagement with boards and vote administration duties. These negative effects outweigh the benefits of a shareholder vote. For all of these reasons, we oppose H.R. 1257 and encourage the House to reject it. If you have any questions, please do not hesitate to contact Tim Bartl of our staff at 202-789- 8670. Thank you for your consideration. Sincerely, Jeffrey C. McGuiness, President.

Mr. ROSKAM. Mr. Chairman, I yield such time as he may consume to the gentleman from Alabama (Mr. Bachus), the ranking member.

Mr. ROSKAM. Mr. Chairman, I yield myself 1 minute. Just kind of a point of interest, and that is, in response to Chairman Frank calling, observing Mr. Castle's quotation. And I would just point out that the distinguished gentleman from New Jersey has been sort of selective, I think, in the attributes of England that he finds attractive. One of those that he didn't find attractive apparently is a loser-pay litigation system which would also maybe drive part of that debate. Mr. Chairman, I yield 2\1/2\ minutes to the distinguished gentleman from North Carolina (Mr. Jones).

Mr. ROSKAM. Mr. Chairman, I yield 5 minutes to the gentleman from California (Mr. Campbell).

Mr. ROSKAM. Mr. Chairman, just a couple of observations before I yield to my distinguished colleague. You know, the gentleman from Georgia said that one of the goals of this legislation is that there be transparency and accountability. I would submit, I think there is a transparency and accountability in the current state of the law. The transparency comes in the disclosure of executive compensation, and the accountability comes in the ability to sell shares if you don't like it. That is a very, very, very powerful tool. My friend from Missouri, the distinguished gentleman who spoke recently kind of criticized a number of individual CEOs. I'm not going to rise to their defense, and I don't think they really deserve defense. But it is an old adage of the law that if what we are doing is creating a statute toward an exception, we tend to make bad statutes. What I would say is, look at the totality of what executive leadership has brought us. From 2002 to 2006, the market capitalization of American companies has risen to $8 trillion. That is something to celebrate and not something to criticize. I yield 5 minutes to the gentleman from Texas (Mr. Paul). (Mr. PAUL asked and was given permission to revise and extend his remarks.)

Mr. ROSKAM. Mr. Chairman, I yield 5 minutes to the gentleman from Delaware (Mr. Castle).

Mr. ROSKAM. Mr. Chairman, I yield myself such time as I may consume. I rise, Mr. Chairman, in opposition to H.R. 1257. But first of all, I want to compliment the chairman and the ranking member who ran a very good process, had fruitful hearings, but nevertheless I think came up with a faulty product. We all tend to sometimes argue in the alternative, picking and choosing those things that we want to focus on, and I find it ironic that the chairman has, in one way, this very, very high view of the marketplace and, in another way, demonstrates a fairly low view of the marketplace. This is all about the level, Mr. Chairman, at which we choose to intervene. We saw the marketplace respond positively just a couple of weeks ago. Morgan Stanley, at their annual meeting, those shareholders decided not to take up this question of executive compensation. The same thing happened, Mr. Chairman, at the Bank of New York recently. So what is the question before the House today? The question before the House is, when there is a difficult situation that comes forward, admittedly a difficult situation that the chairman recently called a fact of nature, and that is overly compensated executive employees, what does the House do? Does the House rush in? I would suggest that the bill as presented currently is an overreaction. It is reaching in, and if we are going to be dabbling in this notion of executive compensation, Mr. Chairman, then I would suggest that we need to go all the way and try and take on other highly compensated employees. What we will hear, I think, from the various speakers on our side of the aisle is trying to lay out a rationale, trying to lay out how we ought best to do this because I will tell you this. I think the great challenge before us as Members of the House is, how do we create the environment where people want to invest in our country, how do we create the environment where the best and the brightest among us want to go into public companies because I will suggest, Mr. Chairman, that the reaction of the past Congress or two on some of these things has unfortunately created an environment that is regulatorily very, very difficult, and it now creates among us the problem of people who say, look, it is simply not worth my time to go into a public company. I am one of the sharp ones; I am going to go into the private equities and so forth. Mr. Chairman, I reserve the balance of my time.

Mr. ROSKAM

Mr. ROSKAM. Madam Speaker, I rise today to congratulate the DARE Students of the Year from Grove Junior High School in Elk Grove Village. These students participated in the Grove Junior High DARE program during the 2006-2007 school year to learn about the harmful effects of drugs and alcohol. In recognition of their outstanding classroom participation and positive attitude, Anthony White and Christian Barajas were named DARE Students of the Year and Jaela Gibsob and Dahee Will were named runners-up. These students have learned to resist peer pressure and live productive drug, gang, and violence-free lives. I commend these students for their hard work and encourage them to continue to set a good example for their peers. Anthony, Christian, Jaela, and Dahee, your families, your school, and your community are extremely proud of what you've accomplished. I wish you all the best in the future.

Mr. ROSKAM

Mr. ROSKAM. Madam Speaker, I rise today in strong support and admiration of the goals and efforts of Illinois' ``100 Women Who Care'' organization. These 100 local women have seized on the remarkable idea that a small group of individuals pooling their talent, energy, and resources together can exercise an exponentially greater ability to affect positive change in our communities. The concept is simple. ``100 Women Who Care'' meets four times a year to select a worthy local charity to support. At each meeting, its members contribute the seemingly insignificant sum of $100. But taken together, these 100 checks for $100 amount to the very significant sum of $10,000. This money has an incredible ability to impact the important community service work of local charities. Already this year, ``100 Women Who Care'' has enabled Outreach Ministries in Carol Stream, Illinois, to provide two apartments for single, homeless refugee women and their children as they work to get back on their feet. I commend the women of ``100 Women Who Care'' for their dedication to serving others. This organization is a wonderful example of how working together can have a huge impact on our local communities. I wish these ladies all the best for the future. Keep up the good work!

Mr. ROSKAM

Mr. ROSKAM. Madam Speaker, I rise today to congratulate Kendall Ciesemier of Wheaton for her outstanding volunteer efforts and service to others. At just 14 years old, Kendall is the founder of Kids Caring 4 Kids, a nonprofit organization dedicated to raising awareness of the AIDS epidemic currently devastating Africa. Through community outreach and fundraising, Kendall has made an incredible difference in the lives of AIDS orphans in a village in Zambia. In spite of her recent personal struggle with two liver transplants, Kendall has tirelessly directed her remarkable talent and energy to serving others. To date, she has raised over $50,000 and just this week was recognized as one of the nation's top youth volunteers by the Prudential Spirit of Community Awards program. I commend Kendall for her strength of character and selfless community service. Kendall, your family, your school, and your community are extremely proud of what you've accomplished. I wish you all the best in the future. Keep up the good work!

Mr. ROSKAM

Mr. ROSKAM. I thank the gentleman for yielding. Madam Speaker, we are here to debate a House Concurrent Resolution, and the root verb of ``resolution'' is resolute. I just want to challenge the House today to consider the resolution of our enemies. I would like to read three quotes to you. Resolved, by Osama bin Laden. The whole world is watching this war, and the two adversaries, the Islamic nation on the one hand and the United States and its allies on the other. It is either victory and glory or misery and humiliation.

Mr. ROSKAM

Mr. ROSKAM. Mr. Chairman, I thank the gentleman for yielding. It strikes me that everything the gentleman has said is actually consistent with the underlying amendment. The amendment that is before the House simply says that it needs to make priorities and make those priorities clear. I take the gentleman at face value that the underlying program and the underlying $10 million is worthy of investment. But we don't get to have it both ways, it seems to me.

Mr. ROSKAM. Mr. Chairman, will the gentleman yield?

Mr. ROSKAM. Mr. Chairman, I offer an amendment.

Mr. ROSKAM. Mr. Chairman, I yield to the gentleman from Missouri (Mr. Blunt).

Mr. ROSKAM. Mr. Chairman, like so many others who have come to the floor today, I rise in support of the underlying bill, H.R. 547. The underlying measure, without question, is one that is worthy of our support. All of us, many of us in the course of our journeys to come here, gained the confidence of the electorate by talking about alternative energies and alternative fuel sources. I come from Illinois, which ranks second in corn production and is one of the leading producers of ethanol. In my district, I have over 140,000 residents who are directly employed in manufacturing, and they would greatly benefit from having clean fuels, that is, moving products around. But as I was evaluating and meeting with my staff to talk about the underlying bill, there was a word that kept popping up in the analysis and that was a key word, new, N-E-W. I know that in the course of my journey to come here, one of the things that I heard consistently throughout the course of the campaigning was that my constituents, Mr. Chairman, wanted us to live within our means. And so the amendment that I have offered is very, very simple. It directs the EPA that $10 million authorized for these three new programs that don't currently exist, created under the bill, would have to come from funds that are already appropriated. It is the simple measure of pay-as-you-go. You see, we don't get it both ways. We don't get to act as if we are fiscally disciplined, and yet at the first opportunity, not act fiscally disciplined. My dad has a phrase that he communicated to me over and over and over when I was growing up and that was this. He said, ``Life is choices,'' and I think we have a choice today to make. This is our first opportunity, with this open rule, to amend a new program that we have seen created in the 110th Congress. We didn't have that opportunity in other bills that have come along. But this is our first opportunity. A $10 million appropriation, Mr. Chairman, or a $10 million authorization, is comparatively small, if you compare it to the overall EPA budget of $7.7 billion. It is less than one-tenth of 1 percent. But my argument is simple: that we need to show the American taxpayers that they can have confidence in us in these comparatively small programs, so that as we move in and continue through this Congress, as new programs are considered, that they are within the context of fiscal discipline. Mr. Chairman, I offer this amendment today to focus the House's attention on it and to bring the attention of the Nation to it. Mr. Chairman, I reserve the balance of my time.

Mr. ROSKAM

Mr. ROSKAM. Madam Speaker, I thank the gentleman for yielding. Madam Speaker, I rise in strong support of House Concurrent Resolution 5, which we have heard spoken about frequently in the past few minutes; but it is deeply personal to me. My life was influenced greatly, Madam Speaker, in 1944, and it was actually 17 years before I was born. A fellow named George Jenkins took the beach at Normandy and was killed there. He was an Iowan. And his mother and dad, Roy and Ella Jenkins, decided to do something with his life insurance money. They took it and they chose a young man, who happened to be my father, V.R. Roskam from Iowa, and they plucked him out of adversity and plucked him out of a bad situation. And they paid his tuition, room, board, books, fees, spending money; and they even bought him this class ring that I have on my hand today. Madam Speaker, it was the generosity of the Jenkins family in honoring a veteran that literally changed my life and the trajectory of our family, even before I was born, even before I was thought of. And so I rise in proud support today of this notion of singling out veterans. It is an area where so many times in our public life today there is a great deal of strife, it seems, among us. But it is this group of people that we can universally come together and honor and celebrate and hold up high. Madam Speaker, I rise in strong support of this resolution.

Mr. ROSKAM

Mr. ROSKAM. Madam Speaker, I rise today to congratulate the Wheaton Warrenville South Tigers football team for their remarkable victory in the Class 8A Illinois State championship on November 25, 2006. After a close first quarter, Wheaton Warrenville South pulled ahead with three touchdowns in the second quarter. The Tigers' Jim O'Brien sealed the deal with an incredible 95-yard kickoff return to defeat Mt. Carmel 44-21 and claim the Illinois State championship. The Tigers finished the season with a perfect 14-0 record. I commend the Wheaton Warrenville South players and coaches for their intensity and dedication throughout the season. Their incredible performance in the State championship is a tribute to long hours of hard work, both on and off the field. Tigers, your families, your school, and your community are extremely proud of what you've accomplished. You have continued the great legacy of Wheaton South football. I wish you all the best in the future. Go Tigers.