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SEC Proposals Would Expose Conflicts on CEO Pay |
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The AFL-CIO today applauded rules proposed by the Securities and Exchange Commission (SEC) to give shareholders better information about the potential conflicts of interest of compensation consultants who help set pay for senior corporate executives.
A December 2007 congressional report found that CEOs of companies that use compensation consultants who have potential conflicts, such as providing management with other services, received considerably higher pay than CEOs of companies that used independent compensation consultants.
In a statement, AFL-CIO President John Sweeney said “better disclosure is needed to bring these conflicts of interest out of the shadows.”
Outsized compensation packages for senior executives hurt shareholders, including pension plans investing the retirement savings of America’s working families. Labor union members participate in pension plans with more than $4 trillion in assets. Union-sponsored pension plans hold about $450 billion in assets. Excessive pay packages for top executives are a giveaway of our members’ money.
The proposed rules, developed under the leadership of SEC Chairwoman Mary Shapiro, will be open for comment for as long as 60 days.
CEOs of Standard & Poor’s 500 companies were paid an average of $10.4 million in 2008. To learn more about excessive executive pay, visit our Executive PayWatch website.
Sweeney also voiced support for the SEC’s decision to require companies to disclose information about directors’ skills and experience on issues ranging from pay to accounting, so shareholders can make better choices among nominees for company boards of directors.
The SEC also has moved to eliminate broker discretionary voting for directors when shareholders fail to give them directions on how to vote. Sweeney said the AFL-CIO is “heartened” by the decision.
This rule is long overdue and will ensure that votes for shareholder proposals are not unfairly skewed in favor of management.
Finally, we are pleased that the SEC is proposing giving shareholders an advisory vote on the pay of senior executives of companies that received taxpayer assistance, as required by the law.
Read Sweeney’s statement here.
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I guess I will never understand Wall Street. Working families fight tooth and nail to raise the minimum wage after a decade of stagnation through the Bush years and Wall Street cries fowl, we’re destroying the nation! But when it comes to CEO’s compensation well, that’s a horse of a different color- mostly green, real green.
It’s perfectly O.K. to pay tens, even hundreds of millions of dollars out to one employee whether the company makes money or not.
I also cannot figure why a CEO has a pension that often times exceeds their salary. If your income is in the tens of millions of dollars, why would you even NEED a pension? yet, theirs is GUARANTEED at 100% whether the company goes bust or not.
The poor slob on the shop floor works for thirty years and gets ten cents on the dollar from Pension Board Guarantee. The only thing guaranteed is that you’ll be working in your golden years while the slob that robbed the company blind is sailing around the world on his yacht with Wall Street’s blessing.
Go figure?