Washington – A House panel Wednesday approved legislation written by majority Democrats to give shareholders at public companies a formal say in executives’ compensation packages.
The House Financial Services Committee, on a 37-29 vote mostly along party lines, sent the bill to the full House. No comparable measure has been introduced in the Senate.
The proposal by committee chairman Rep. Barney Frank, D-Mass., would give shareholders a chance to cast a nonbinding confidence or no-confidence vote on executive pay plans, allowing them either to ratify or disapprove of them.
Such shareholder votes are the practice in Britain, Australia and Sweden. Advocates say pay packages are rarely voted down, but the knowledge that they must be voted on has helped keep executive compensation in check overseas.
