WASHINGTON — Federal regulators are giving shareholders at large public companies the right to register their opinions on executive pay at least once every three years.
The Securities and Exchange Commission adopted the rule by a 3-2 vote Tuesday. It also lets shareholders decide if they want to vote every year, every other year or once every three years. Voting would begin this year.
The votes on pay packages will occur as part of the proxy process, the annual ballot that shareholders use to elect boards of directors. The financial overhaul law enacted last summer gave shareholders a nonbinding vote on executive compensation. But lawmakers left it to regulators to determine how often they should vote.
Shareholders at smaller public companies, with market value of $75 million or less, will begin voting in 2013.
Lawmakers and government officials have blamed outsize pay packages for encouraging disastrous risk-taking and short-term gain at companies at the expense of long-term performance.
