Rep. Frank Unveils Bill to Give Shareholders Vote on Executive Pay

March 2, 2007

House Financial Services Committee Chairman Barney Frank, joined by 21 other members of Congress, today introduced legislation to require public companies to include in their annual proxies a non-binding advisory shareholder vote on their executive pay plans.

The bill, H.R. 1257, the “Shareholder Vote on Executive Compensation Act” will not set any limits on pay, but will ensure that shareholders have an opportunity to give their approval or disapproval on the company’s executive pay practices.

The bill also contains a separate advisory vote if a company gives a new, not yet disclosed, “golden parachute” while simultaneously negotiating to buy or sell a company.

Advisory votes on compensation have been used in the United Kingdom and recently adopted voluntarily by the company AFLAC.

“I do not understand those who argue that the people who make up our stock markets are collectively very wise, but at the same time are somehow incapable of rendering a coherent opinion of what they should pay those they employ to run the corporations that they own,” said Rep. Frank.

Specifically, the legislation builds on the Securities and Exchange Commission’s (SEC) executive pay disclosure rules to require that public companies include in their annual proxy to investors the opportunity to vote on the company’s executive pay plans.

Last year, the SEC required that public companies improve their executive compensation disclosures to shareholders. Frank said he believes that disclosure is important, but incompleteand that his legislation would “ensure that shareholders have a say on their company’s executive compensation disclosures without micromanaging the business.”

The House Financial Services Committee will testimony on this issue at the hearing on the legislation on March 8, 2007, at 10:00 a.m. in the Rayburn House Office Building, room 2128.

Source Rep. Barney Frank, Chairman
House Financial Services Committee

Subscribe Like this article?
Subscribe to our free email newsletter.

Latest Comments

  • March 5, 2007 at 10:04 am
    John D. Wiemann says:
    While I generally disagree with everything that Rep. Barney Frank stands for politically, I believe he is partially on the right track regarding executive compensation for PUB... read more
  • March 2, 2007 at 6:15 am
    Marjean says:
    Right On Bud!
  • March 2, 2007 at 2:45 am
    Doris says:
    Thanks REp Frank
See all comments

Add a Comment

Your email address will not be published. Required fields are marked *

*

More News
More News Features