White House to Propose New Rules for Executive Compensation
By David Cho
Washington Post Staff Writer
Wednesday, June 10, 2009
The Obama administration proposed legislation today to empower shareholders and the Securities and Exchange Commission to exercise more oversight over executive compensation at all publicly traded firms.
Under a so-called "say-on-pay" proposal, shareholders would be given the right to vote each year on whether an executive compensation package should be approved. While the results would be non-binding, administration officials say they hope the effort would pressure firms to rein in lavish pay. Companies would also be required to submit vote tallies in a filing with the SEC.
A second proposal would authorize the SEC to ensure that compensation committees at companies act independently in setting executive pay. Members of these committees would not be able to take any fees from their respective firms other than what they make for serving on the panels. Attorneys or consultants that help members in their work must be hired by and report to the committee rather than the chief executive of a firm.
Draft legislation on the proposals is expected to be sent to Capitol Hill soon, officials said. While in the Senate, Obama co-sponsored similar say-on-pay legislation, which was stiffly opposed by big corporations.
(More here.)
Washington Post Staff Writer
Wednesday, June 10, 2009
The Obama administration proposed legislation today to empower shareholders and the Securities and Exchange Commission to exercise more oversight over executive compensation at all publicly traded firms.
Under a so-called "say-on-pay" proposal, shareholders would be given the right to vote each year on whether an executive compensation package should be approved. While the results would be non-binding, administration officials say they hope the effort would pressure firms to rein in lavish pay. Companies would also be required to submit vote tallies in a filing with the SEC.
A second proposal would authorize the SEC to ensure that compensation committees at companies act independently in setting executive pay. Members of these committees would not be able to take any fees from their respective firms other than what they make for serving on the panels. Attorneys or consultants that help members in their work must be hired by and report to the committee rather than the chief executive of a firm.
Draft legislation on the proposals is expected to be sent to Capitol Hill soon, officials said. While in the Senate, Obama co-sponsored similar say-on-pay legislation, which was stiffly opposed by big corporations.
(More here.)
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