SEC May Require TARP Firms to Let Shareholders Vote on Executive Pay

By Staff | July 1, 2009 | 10:50 AM EDT
Washington (AP) - The Securities and Exchange Commission is debating proposed rules that would require firms that have received government bailouts to let shareholders vote on executive pay.
Congress mandated the rule for participants in the Troubled Asset Relief Program, the $700 billion financial bailout. Known as "say-on-pay," it would give shareholders the opportunity to vote on companies' compensation practices, although the votes can be nonbinding.
Another proposed rule would increase the disclosure of compensation policies for all public companies.
That proposal includes a range of requirements: Companies would have to describe how compensation policies relate to risk; explain the qualifications of directors, executives and nominees; and state whether compensation consultants might have conflicts of interest.
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