Shareholder Vote On Executive Compensation Act
Floor Speech
SHAREHOLDER VOTE ON EXECUTIVE COMPENSATION ACT -- (Extensions of Remarks - April 26, 2007)
* Ms. McCOLLUM of Minnesota. Mr. Chairman, I rise today in support of the Shareholder Vote on Executive Compensation Act, and I commend Chairman Frank for his work on this critical issue.
* While American families struggle to meet their basic needs, such as access to affordable housing, health care, and education, the CEOs of top companies earn more than 430 times the pay of an average worker. The disparity between CEO compensation and minimum wage earnings is even more severe. The average CEO earns more before lunch than a minimum wage worker earns in a year. This inequality needs to be addressed. The Shareholder Vote on Executive Compensation Act is an important step toward fairness because it empowers shareholders and holds public corporations accountable for their compensation practices.
* H.R. 1257 requires that public companies give shareholders the opportunity to have a nonbinding advisory vote on the company's executive compensation. It also gives shareholders an additional nonbinding vote if the company awards the CEO a new, undisclosed personal exit package, also known as a ``golden parachute'' package, during negotiations to buy or sell a company. This bill does not in any way cap executive salaries nor does it diminish the board's legal authority. It simply provides shareholders with a mechanism to voice their support or opposition to an executive compensation package.
* This legislation is supported by the International Corporate Governance Network, the Council of Institutional Investors, labor unions, and shareholder organizations. Further, this approach to corporate governance is not new, and it has been shown that it works. The nonbinding advisory vote has been successfully implemented in the United Kingdom and more recently in Australia. It was also adopted voluntarily by the insurance company, Aflac, and 52 other companies have similar proposals pending.
* Mr. Chairman, American families cannot afford to continue subsidizing excessive CEO compensation packages. I urge my colleagues to join me in supporting H.R. 1257.
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