What: All Issues : Government Checks on Corporate Power : General : Requiring publicly traded companies to allow shareholders to cast non-binding votes on compensation packages for top executives beginning in 2009 (H.R. 1257)/Rep. John Campbell (R-Calif.) amendment to exempt companies whose directors are elected by a majority vote of the shareholders (2007 house Roll Call 238)
 Who: All Members : New York, District 2 : King, Pete
[POW!]
 
Requiring publicly traded companies to allow shareholders to cast non-binding votes on compensation packages for top executives beginning in 2009 (H.R. 1257)/Rep. John Campbell (R-Calif.) amendment to exempt companies whose directors are elected by a majority vote of the shareholders
house Roll Call 238     Apr 20, 2007
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Progressive Result
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This vote was on an amendment to a bill requiring publicly traded companies to allow shareholders a say in the compensation packages of top executives. Proposed by Rep. John Campbell (R-Calif.), the amendment would have exempted companies whose directors are elected by a majority vote of the shareholders.

The legislation Campbell was seeking to amend would require that all publicly traded corporations conduct annual nonbinding advisory votes on the compensation of their executives beginning in 2009. The impetus for the bill was a growing concern among lawmakers as well as many economists that the widening discrepancy between pay for executives and working- and middle-class Americans was harmful for both the economy and social mobility.

Campbell said that during committee hearings on the bill, the witnesses stated they preferred that the reforms Congress sought on behalf of shareholders be accomplished through a democratically elected board of directors - which approve the pay packages of top executives - rather than an explicit vote on executive compensation by shareholders.

"All six witnesses preferred that to this very prescriptive executive compensation proposal," Campbell said. "Because, as we discussed earlier, that would actually give shareholders more rights, through the board, to express their displeasure with a company for excessive executive compensation or simply executive operations that they don't like: for a poor performance, for a bad union contract, for whatever they wanted to express their displeasure more effectively by voting against people who were proposed to be on the board."

Frank accused Campbell of being disingenuous in his intent, saying that if Campbell really wanted the substance of his amendment enacted - more shareholder say regarding the boards of directors of publicly traded companies - he would have filed it as separate legislation. As it were, Frank said, such legislation would have much more difficult time of passing that the bill to which he was seeking to amend.

"If he wants to file a bill to give shareholders the right to vote by a majority for directors, and I think there has to be further change, then I would be happy to guarantee a hearing," Frank said, adding, "I think it's going to be hard enough to get even this through."

"We have had people who said this is way too much. I do not think the gentleman speaks for his party in being supportive of something that will be far more opposed by a broader segment," Frank continued, explaining that he would not want to sacrifice the bill he crafted by attaching an amendment he knew would cause more Republicans to vote against the legislation on final passage.

Democratic opposition to Campbell's amendment was near unanimous, with only two Democrats voting in support. Twenty-two Republicans also voted against it. Thus, by a vote of 161 to 241, the House rejected an amendment to a bill requiring publicly traded companies to allow shareholders a say in the compensation packages of top executives that would have exempted companies whose directors are elected by a majority vote of the shareholders, and the legislation moved forward without the exemption.

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