U.S Representative Barney Frank has introduced legislation that would give shareholders a nonbinding vote on executive compensation at public companies.
The legislation (H.R. 1257) would require that public companies include in their annual proxy to investors the opportunity to vote on the company's executive pay plans. The vote would be a nonbinding one.
"I do not understand those who argue that the people who make up our stock markets are collectively very wise, but at the same time are somehow incapable of rendering a coherent opinion of what they should pay those they employ to run the corporations that they own," says Frank, who is chair of the House Financial Services Committee.
In February, Aflac Incorporated announced that it will give shareholders a nonbinding vote on executive compensation beginning in 2009.
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