A Washington Post story said shareholders would be given the right to vote in a non-binding resolution each year on whether an executive compensation package should be approved. The public companies would also be mandated to submit vote tallies in a filing with the Securities and Exchange Commission (SEC).
According to the news report, a second proposal would authorize the SEC to make certain that compensation committees at companies act independently in setting executive pay. Committee representatives could not accept money from their respective firms other than what they make for serving on the panels.
Draft legislation on the proposals is expected to be sent to Capitol Hill soon, officials said, according to the report.
Treasury Secretary Timothy F. Geithner asserted in a prepared statement that the government does not have interest in “capping pay” or “setting forth precise prescriptions for how companies should set compensation.” Instead, the administration wants to deal with pay practices that motivate executives to take excessive risks in the pursuit of profits.
More information about the administration’s proposal is available here .
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