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Lawmakers Agree to Permit Less Frequent Pay Votes

Investor advocates said today that U.S. House and Senate lawmakers have agreed to accept an amendment from Senator Mike Crapo to allow companies to seek investor approval to hold advisory votes on executive compensation every two or three years, instead of every year.

According to investor advocates, the Idaho Republican’s amendment to the financial reform bill would direct companies when they hold their first advisory vote to also ask shareholders to indicate their preferred frequency for future votes on pay. It appears likely that some companies, especially those with large insider share blocs, will be able to win investor consent for less frequent pay votes.

This provision, which likely will remain in the final bill, would be a setback for “say on pay” proponents, who prefer annual advisory votes and want Congress to mandate that frequency at all public companies. A majority of the 70 U.S. companies that have agreed to hold advisory votes have pledged to do so annually, but a few, such as Pfizer and General Mills, have opted for biennial votes, while others, such as Microsoft and Supervalu, plan to hold triennial votes.

Crapo’s amendment also would authorize the SEC to exempt certain companies and mentioned “small issuers.” A similar provision was in the bill passed by the House in December.




This Forum program is open, free of charge, to anyone concerned with investor interests relating to shareholder advisory voting on executive compensation, referred to by activists as "Say on Pay." As stated in the posted Conditions of Participation, the Forum's purpose is to provide decision-makers with access to information and a free exchange of views on the issues presented in the program's Forum Summary. Each participant is expected to make independent use of information obtained through the Forum, subject to the privacy rights of other participants.  It is a Forum rule that participants will not be identified or quoted without their explicit permission.

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