SEC gives shareholders say-on-pay vote
Shareholders of publicly listed companies will get to weigh in on executive compensation through advisory votes, under a new rule adopted by U.S. securities regulators on Tuesday.
The say-on-pay rules, approved in a 3-2 vote by the Securities and Exchange Commission, would implement a provision in the Dodd-Frank Wall Street reform law.
It is designed to give shareholders greater input over executive compensation after many expressed outrage during the financial crisis at lavish pay practices.
The say-on-pay vote is non-binding, although companies generally want to avoid the embarrassment of a no vote.
Shareholders would also get to vote on certain so-called golden parachute pay packages in connection with a merger or acquisition, and companies would be required to make additional disclosures about such compensation arrangements.
Republican commissioners dissented on the rule in part because it only gives a temporary exemption to small public companies.
(Reporting by Sarah N. Lynch; Editing by Tim Dobbyn)
© Copyright Thomson Reuters 2024. All rights reserved.