One day after an Obama administration official stood behind the corporate governance changes included in the Senate financial regulation bill a dozen business groups are urging lawmakers to vote them down.
The Senate bill would give the SEC explicit authority to write rules that give shareholders a way to directly nominate board members on the corporate ballot. For years, shareholder groups have lobbied the SEC on this issue. Business groups have strongly opposed it, claiming it could allow special interests groups to hijack the boardroom. However, it is most likely obvious to everyone that the real opposition is not of the special interest groups, but rather of the additional reference in the bill which would give shareholders an annual nonbinding vote on executive pay packages and require companies to have policies in place outlining how they would claw back pay from executives. The SEC has proposed a so-called proxy access rule, but it hasn't been finalized.
The Deputy Treasury Secretary Neal Wolin told the crowd at the Council of Institutional Investors annual meeting that the administration supports all of the governance measures calling them "a significant enhancement" that could be used to "rein in the irresponsible pay practice that led so many firms to act against the interest of their shareholders."
The 12 organizations, including U.S. Chamber of Commerce, National Association of Manufacturers, and Financial Services Roundtable, sent a letter to lawmakers saying "various academic analyses of the financial crisis have found that it was not caused, in whole or in part, as a result of the failure of existing corporate governance structures."
Republican Senators have echoed the concerns of big business and suggested they will offer amendments to strip out some of these measures. However, it will be tough for Republicans considering the Senate bill passed through the Banking Committee without any amendments or Republican support. |
