Shareholders' 'say on pay' due for House vote
PrintE-mailDisable live quotesRSSDigg itDel.icio.usBy William L. Watts & Robert Schroeder, MarketWatch
Last Update: 7:01 PM ET Apr 18, 2007
WASHINGTON (MarketWatch) -- The House of Representatives began debate Wednesday on legislation that would give shareholders a nonbinding vote on the pay and benefits doled out to top executives.
The legislation, dubbed the "say on pay" bill, would require that public companies allow shareholders an annual nonbinding advisory vote on their company's executive compensation plans. It also requires an additional nonbinding advisory vote if the company awards a new golden parachute package while simultaneously negotiating the purchase or sale of the company.
The White House early Wednesday issued a statement opposing the bill, but didn't specifically threaten a veto from President Bush. The full House is expected to vote on the package Friday morning.
The bill cleared the House Financial Services Committee on a 37-29 vote last month. Republican lawmakers and the White House say the bill is unnecessary, arguing that recent federally mandated disclosures about compensation go far enough to empower shareholders.
"Before additional corporate governance requirements are legislated, the administration believes that recent enhancements should be given time to take effect," the White House said in a statement of administration policy issued by the Office of Management and Budget.
The legislation, authored by Financial Services Committee Chairman Barney Frank, D-Mass., wouldn't limit how much a CEO or other officers earn. Proponents say the measure would allow shareholders to make their views heard in cases of excessive compensation.
The issue of "say on pay" has been one of this year's hottest corporate proxy season issues, with investor outrage stoked by huge payouts for executives at companies like Pfizer and Home Depot, where CEO Robert Nardelli walked away with a $210 million package despite shareholder complaints he didn't deserve it.
William L. Watts covers Congress and politics for MarketWatch.
Robert Schroeder is a reporter for MarketWatch in Washington.
