Obama Administration to Seek New Power for SEC on Executive Pay
June 10 (Bloomberg) -- The Obama administration will seek
new powers for the Securities and Exchange Commission to force
firms to let shareholders vote on executive pay and make
directors who set compensation more independent, an
administration official said.
Today’s proposal, subject to congressional approval, would
cover all public companies. President Barack Obama has long
supported giving shareholders nonbinding votes on bonuses,
salaries and severance packages. The administration also will
name a “special master” to monitor compensation plans for
firms receiving exceptional assistance in the financial rescue.
Shareholders already have the right to influence public company management policies but they don't because institutional portfolio managers who direct most of the votes pay no attention to corporate policy. They don't want to spend the money to pay attention to real management because it would dilute their profits from the management fees. As a consequence corporate executives in place effectively have no opposition and can loot the shareholders at will. The answer is not to empower socialist leaning government bureaucrats to be given a say in corporate pay. This is bad, very bad.