The House of Representatives’ Financial Services Committee has passed legislation that would require US public companies to give shareholders an advisory vote on their executive pay plans. The proposed law will now be considered by the full House.
The bill, H.R. 1257, the "Shareholder Vote on Executive Compensation Act", was introduced by the Committee’s chairman, Barney Frank, and also proposes a separate advisory vote if a company gives directors a new, not yet disclosed, “golden parachute” while simultaneously negotiating to buy or sell a company.
The legislation has the backing of the International Corporate Governance Network (ICGN). Mark Anson, chairman of the ICGN, recently wrote to Frank urging for its rapid approval and implementation.
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