Amazement Tonight: When was the last time you were invited to participate in the legislative process?
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by Ken
By now you're probably thinking that Florida Rep. Alan Grayson is a co-blogger here at DWT. What can we say? The congressman went to Washington vowing to be the kind of congressman he said he would be in the election campaign, and he's more than made good on the promise.
And now he's asking for our help! Matt Stoller in the congressman's office explains that they've hit a snag in defining a plan to make corporate executives accountable to shareholders on the matter of pay:
Next week, the Financial Services Committee is going to be marking up a bill on executive compensation, the so-called ‘Say on Pay’ bill. Among other things, this bill mandates a nonbinding shareholder vote on executive compensation. Now, the vote is nonbinding, so the board could theoretically just ignore a shareholder ‘no’ vote.
Let’s say that the legislation were changed so that the shareholder vote were binding. What would happen if shareholders vote ‘no’? Would the executives then be paid nothing? That seems unreasonable and unworkable. How could this be structured so that the shareholder vote is binding, but there’s some process to determine executive pay if management is voted down?
Please put you and your readers’ best ideas out there and I’ll be combing the internets.
If you want something to link to, Steve Clemons has posted this here: http://www.thewashingtonnote.com/archives/2009/07/what_are_your_t/
And Democratic populist financial backer and economic thinker Leo Hindery also responded: http://www.thewashingtonnote.com/archives/2009/07/leo_hindery_res/
Feel free to add your thoughts in the comments section.
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Labels: Alan Grayson, executive compensation, House Financial Services Committee, Matt Stoller
posted by KenInNY @ 9:00 PM
2 comments
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2 Comments:
Why not make executive bonuses a % of annual profit? If they are doing a good job, they deserve a bonus...if there isn't a profit they don't deserve a bonus! Frankly, if it is a company that received bailout money..they should skip a year or two. If there were layoffs to achieve profit...they shouldn't be paid until those jobs are recreated in the USA! I find it utterly offensive how Corporations have killed the middle class. Between job losses, stock collapse, stagflation and outrageous healthcare...corporate fascism has had it's day. The majority of the American public is spent...financially and emotionally. There will be a revolution if CEO's (and Congress/Senate) keep up with this entitlement to the cushy lifestyle. I have absolutely no sympathy because they are used to living lavishly...let them have their business lunches at Subway! If they don't like it...Let them quit! You'll find an abundance of applicants who will be happy to take their job at a salary less than their predecessor. Same goes for Congress/Senate...They need to be reminded that these are crucial times. The Middle class (majority of voters) is losing everything they have...except their right to vote. Clearly all the propaganda scare tactics aren't working so well or Obama would not be president.
My advice.."Suck it up boys...the frat party is over, now it is time to grab a broom and start cleaning up after yoursleves. (The maid went on welfare because she couldn't afford her health Insurance)"
Good thoughts, Anon!
I don't think, though, that the committee is thinking it has the power to dictate bonus terms. They're looking at meaningful shareholder accountability, and specifically at the glitch whereby, if compensation packages are submitted to a shareholder vote that is made MANDATORY, what happens in the event that the package is voted down? Surely it doesn't mean that the person doesn't get paid, or isn't contractually tied to the company, does it?
My first question would be, is there not some existing agreement between the employee and the company that could (would?) remain in force? I don't know if that's a good or bad thing, depending on the previous contract or other agreement. I'm just wondering.
Ken
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