February 7, 2006
Re: Proposed Rule for Internet Availability of Proxy Materials (Release No. 34-52926: File No. S7-10-05: 70FR74598,12/15/05)
Statement from Ronnie H. Davis, Ph.D., Chief Economist, PIA/GATF
As Chief Economist for the Printing Industries of America/Graphic Arts Technical Foundation, a trade association representing more than 12,000 printing and graphics arts member companies, I am writing to express concern with the Securities and Exchange Commissions proposed rule (File No. S7-10-05) that would permit the replacement of the current paper-based proxy materials process with an electronic system of notification and balloting. Under this proposed rule, companies could choose to provide shareholders with annual reports and proxy voting materials electronically, rather than by postal mailed, paper-based copies, and could offer shareholders the option to receive the appropriate information on paper only if requested.
Americas printing industry is the most geographically dispersed manufacturing industry with over 40,000 plants across the country. Printing is a major manufacturing industry in virtually every state proving employment opportunities for more than one million employees nationwide. There are some 27 states with more than 10,000 printing industry employees and 38 states with more than 5,000 printing industry employees. In terms of industry payroll, there are 18 states with printing industry payrolls in excess of 1 billion annually.
Many of these plants specialize in financial printing including annual reports and proxy materials. It is estimated that these specialized financial printing plants employ approximately 13,000 workers and produce around 2 billion in annual printing shipments.
Further, many thousands of other printing plants around the country produce annual reports and proxy statements as secondary products. The financial printing in these plants provides thousands of additional jobs and millions of dollars in wages and salaries for these workers.
In total, approximately 3 billion in annual printing shipments may be for annual reports and proxy materials. Of this 3 billion over 1.2 billion goes to pay wages and salaries of employees and income and payroll taxes providing funding for local, state and national governments.
In summary, thousands of jobs, millions of dollars in payrolls and local, state and federal tax revenues may be lost if this proposed rule in implemented.