U.S. Rep. Barney Frank sees success ahead
for his “say-on-pay” bill
By Jon Chesto
The Patriot Ledger
Posted Oct 28, 2008 @ 05:33 AM
Last update Oct 28, 2008 @ 06:50 AM
Barney Frank meets with The Patriot Ledger editorial board
There’s at least one
piece of unfinished business that U.S. Rep. Barney Frank expects to
resolve once the new congressional session begins in early 2009: the
passage of a bill giving shareholders some say over top executives’ pay
Frank’s “say-on-pay” bill passed
overwhelmingly in the House in April 2007 but it has been stalled in the
In a meeting with The Patriot Ledger’s
editorial board on Monday, Frank said he plans to bring the bill back to
the House floor for a successful vote early next year. The Newton Democrat
also expects the bill has enough support that it will pass in the Senate
this time around.
The measure would require all publicly
traded companies to run the pay packages for their top five executives
past their shareholders with a nonbinding, advisory vote every year.
Frank, the chairman of the House Financial
Services Committee, said the bill would cause CEOs and their allies on
corporate boards to be more thoughtful about handing out big pay packages.
He said he expects many executives would be embarrassed to go against the
wishes of the majority of their companies’ shareholders.
Some activist shareholders have pressed
companies to approve their own internal “say-on-pay” measures in the past
few years but a relatively small number of companies have adopted them so
Nell Minow, editor of research firm The
Corporate Library, said Frank’s bill is a key corporate governance reform
– particularly if it can be coupled with changes at the state level or to
exchange listing rules that can give shareholders more control over
installing and removing corporate board members.
She noted that the two major presidential
candidates – Sen. Barack Obama and Sen. John McCain – support Frank’s
bill, and Obama had introduced the bill in the Senate.
Minow said the public’s frustration with
Wall Street firms over the recent credit market collapse should help push
Frank’s bill forward next year. “I think it’s a modest corrective to a
system where the market has failed very badly,” she said. “There’s a sense
of outrage at this point about this current situation that I have not seen
before with any financial meltdown.”
Jon Chesto may be reached at