‘Say on Exec Pay’ Bill Advances in House
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A key congressional committee took another step toward reforming the way Wall Street works yesterday. By a vote of 40-28, the House Financial Services Committee approved H.R. 3269, the Corporate and Financial Institution Compensation Fairness Act. The act would help end the excessive compensation practices that encourage executives to take excessive risks that ultimately hurt employees, shareholders and taxpayers.
The bill would give shareholders a “say on pay” and allow them a nonbinding vote on executive pay. It also would require that independent directors from outside of management serve on compensation committees.
Says committee Chairman Rep. Barney Frank (D-Mass.):
This bill is the first step toward comprehensive financial regulatory reform. I look forward to having this bill on the House floor soon, and I also look forward to changing the status quo.
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.
AFL-CIO Urges Stricter Bank Bailout Process, Hails NEA Affiliations
The AFL-CIO Executive Council wrapped up its winter meeting in Miami today, calling for stricter regulation and oversight of the financial industry, urging President Obama to ensure that taxpayers get “fair value” for any additional funds used to bail out the nation’s banks, authorizing continuation of discussions on unifying the labor movement and urging adoption of a global charter of rights for working women.
Also today, the AFL-CIO and the National Education Association (NEA) announced that three more NEA local chapters, with more than 3,000 members, have affiliated with the AFL-CIO under the Solidarity Partnership program. The program is supported by AFT, a long-time AFL-CIO affiliate.
Says AFL-CIO President John Sweeney:
These affiliations show that we are unified and committed to fighting for quality education in our nation’s classrooms.
