Obama wants a non-binding vote on executive pay

Posted Jul 17th 2009 3:20PM by Zac Bissonnette
Filed under: Management

The Obama administration proposed legislation yesterday that would require fully-reporting publicly traded companies to give their shareholders a non-binding vote on executive compensation. Under the proposal, directors would have to ask shareholders what they think before going ahead and doing what they were going to do anyway.

Administration insiders predicted that the measure would pass Congress easily, but that isn't stopping the Chamber of Commerce and the even more infamous Business Roundtable from opposing the measure.

Why would anyone what oppose a non-binding vote is beyond me. Why are they so opposed to taking a straw poll of their shareholders to find out what they think about their pay practices? Why are they so opposed to companies soliciting the opinions of their shareholders?

If anything, this measure doesn't go far enough. What's needed in the boardrooms of America is a revolution -- where shareholders take back their company from lazy, incompetent and just plain crooked directors who bankrupted General Motors, sent Bank of America (NYSE: BAC) onto the welfare rolls, and turned American International Group (NYSE: AIG) into America's most degenerate gambling addict. And non-binding resolutions will lead to a non-binding revolution, which is really no revolution at all.

Tags: Corporate Governance, CorporateGovernance, Executive Compensation, Executive Pay, ExecutiveCompensation, ExecutivePay, OBama

Print this

Reader Comments (Page 1 of 1)

7-17-2009 @ 3:45PM

thedude said...

I keep saying that executive compensation should be based on a percentage of the taxes a company pays on the profits they report

If a company claims $1 Billion in profit and pays $250 Million in taxes then let the execturives reap a pay package equivalent to a perecentage of that $250 million

Executives should not benefit in any way from fluctuations in the price of the companies stock.

Also if a company "cooks the books" to record no profit and avoid paying taxes then the exceutives should receive no compensation at all, as well as being responsible for paying back expenses they have generated due to any travel they have taken on the corporate jets.

Unfortunately this would never happen as it would require companies and their execs to operate in an ethical manner
That is something they will not do as long as elected officials do not have to live an ethical lifestyle.

7-17-2009 @ 7:11PM

frank said...

Bussness is doing everything it can to cut costs. If we cut the cost of management that is a cost. No on in the world deserves over one Million Dollars per yer for personal spending. NO ONE! The sooner we stop the overpaying the better. Just because they can rape us dont mean that they should.

7-18-2009 @ 11:40AM

LIN said...

THANKS,STUDY!-------------------------------------------------------------厦门雅思艺术制作中心Oil paintingS,是专业制作油画,国画CHINESE PAINTING,画框,FRAME,相框,和其他艺术品---油画,Oil painting,国画,Oil paintingS,超写实油画, 花卉OILPAINTING, 千手观音OILPAINTINGS展示, 还有千万张油画图片等您欣赏----欢迎光临