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House votes to give shareholders advisory role in setting executive compensation

[JURIST] The US House of Representatives [official website] voted Friday to provide shareholders with an advisory vote on executive compensation [HB 1257 summary], noting that in the last 15 years, compensation of Fortune 500 CEOs has moved from 140 times that of the average employee to over 500 times. The bill only had minimal Republican support, passing 269-134 [roll call] after the defeat of numerous Republican proposed amendments, including one that would have eliminated the advisory vote when an executive compensation package was within 10% of the average for comparable companies. The White House [official website] joined the majority of House Republicans in opposing the bill, saying that Congress should not "mandate the process by which executive compensation is approved" [policy statement, PDF].

President George W. Bush and other Republicans have agreed that executive compensation is excessive, but believe that it is not for government to regulate. In December the Securities and Exchange Commission [official website] amended disclosure rules to require public information on executive compensation [rule text, PDF; press release] for publicly traded companies. AP has more on the House vote, and on White House opposition.

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